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When Should Startups Use an “Innovation Play” Narrative in Their Pitch?
Master the “Innovation Play” investment story to secure funding for your disruptive venture. This guide explains how to frame a novel solution with high industry-disrupting potential to attract venture capital and impact investors, focusing on technology and market transformation.
Question
Which investment story is best suited for a venture with a novel solution and high potential to disrupt an industry?
A. Addressing an Underserved Need
B. Innovation Play
C. Impact Delivery at Scale
Answer
B. Innovation Play
Explanation
Innovation Play highlights novel approaches with disruptive potential. This narrative is specifically designed for ventures whose core value proposition is a new technology, a unique business model, or a novel approach that has the potential to fundamentally change an existing industry or create a new one.
The “Innovation Play” Narrative Explained
The “Innovation Play” story focuses on the defensible and proprietary nature of the solution itself. The narrative is built around the “how” and “why” of the innovation: how it works, why it is superior to existing alternatives, and why it will be difficult for others to replicate. This story is most effective when the venture’s competitive advantage is rooted in its intellectual property, groundbreaking technology, or a unique process that creates a high barrier to entry. Investors are drawn to this narrative when they are seeking high-growth opportunities that can capture a significant market share by displacing incumbents.
Differentiating From Other Investment Stories
While a disruptive venture might also address an underserved need or deliver impact, the “Innovation Play” is the most precise narrative for emphasizing its core strength.
A. Addressing an Underserved Need: This story is best suited for ventures entering a market with a clear and demonstrable gap in service or product availability. The focus is on the market opportunity and the specific customer pain point. An “Innovation Play,” by contrast, focuses on the solution’s novelty as the primary driver of value.
C. Impact Delivery at Scale: This narrative is tailored for impact investors and centers on the venture’s ability to create and scale a measurable social or environmental benefit. While innovation can be the mechanism for delivering this impact, the story’s main theme is the magnitude of the positive change, not the innovation itself. An “Innovation Play” focuses on market disruption, which may or may not be directly tied to a social or environmental mission.
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