How to build investor confidence amid volatility

For innovators who have conceived and built ventures on the foundation of yesterday’s certainties, the last quarter has been a time of reckoning. Global trade continues to realign, climate priorities have see-sawed, consumer confidence has plunged and political volatility has sent markets on what seems like a perpetual rollercoaster.

Welcome to the polycrisis era, where a perfect storm of shocks have converged to amplify uncertainty. Amid these challenges, innovators have a chance to stand out – if they can flip the narrative.

Avoidance is not an option because investors see the same challenges. Skirting tough questions and mumbling answers will only erode trust. The solution? Inoculate your narrative. This means introducing a small dose of the problem, on your terms, and flipping the narrative about what it means for your business. By doing this, you take control of the story, while demonstrating transparency, maturity and leadership – qualities investors respect and seek in uncertain times.

It works by first naming the risk – state the threat plainly and quantify it. Investors value honesty over sugarcoating. Next, own the vulnerability by showing you understand the challenge and have stress-tested the worst-case scenario. Finally, reframe the situation as an opportunity by demonstrating how these same pressures create a tail-wind.

This approach can help build investor confidence and trust by showing them you are not just prepared to face challenges taken to the worst case, but you can find ways to flip them into strengths.

Every innovation has weaknesses. Every market poses risks. When those vulnerabilities are obvious, the best strategy is to own them and reframe them into opportunities.

Consider a climate tech company whose solution no longer feels urgent to investors as governments deprioritize the environment. Instead of ignoring reality, the company should lean into it by saying: "While climate isn’t the top priority for some investors right now, our technology also addresses energy resilience – a growing priority in today’s troubled geopolitical landscape." This reframes a potential weakness as a strength by aligning with new priorities.

What if your market is shrinking? Acknowledge that, then quickly pivot. Emphasize the opportunities to focus on high-value, niche segments that are more readily accessible today. And if scaling your business will now take longer than expected, explain how the extended timeline allows you to refine your innovation and diversify approaches to develop a stronger foundation.

Reframing challenges is not about ignoring reality, it’s about helping investors to see the bigger picture and the potential you offer. By demonstrating how perceived weaknesses actually yield new opportunities, you position yourself as a leader who thrives during change to embrace new opportunities. Amid change, adaptability is a more important skill than building the perfect immovable plan.

In uncertain times, investors don’t just look for companies with great products. They look for leaders – individuals with a clear vision who can navigate complexity with confidence. The corollary to investors retreating from uncertainty is their search for leaders who can navigate turmoil.

Ensure your value is clear by beginning with the "why": Why does your innovation matter at this moment? How does your innovation align with the problems, priorities and values of the current polycrisis? Borrowing from author Simon Sinek, begin with your purpose, then connect the dots to show how your vision translates into results for customers, investors and the world.

Simplify and elevate your story. Help investors connect the dots by showing how your innovation solves big-picture problems. Guide them through the complexity with a clear, compelling narrative.

How you deliver your message matters almost as much as the message itself. Key strategies can help your communication land effectively to build investor confidence:

Lead with the “so what?”, not the source code. Investors decide in minutes whether to lean in and many will not understand or care about the more technical details. They need the big picture of what you bring and why it matters to customers, the world and their investment. Help them feel deeper due diligence is worth the time and effort. Relatable and credible beats complex and detailed. Describe the importance of your technical prowess or peer reviewed papers, don’t show lines of code or delve into footnotes.

Data reassures, but stories travel. Lead with memorable human stories that make your message and metrics easy to share. Quantify abstracted scale in terms that are more viscerally familiar, such as the cost of a new phone or other concrete equivalents. Investors may forget your KPIs, but they will remember how you made them feel. And, a memorable story is more easily repeated to the investment committee.

Different investors have different priorities. A climate-focused fund may care deeply about sustainability, while a generalist fund prioritizes scalability, profitability or a particular geography. Lean your pitch towards their priorities to build investor confidence.

This polycrisis is not just a test for innovators, it’s a test for investors too. Some understand that their role goes beyond funding. Entrepreneurial investors embrace problem solving and can see themselves as partners in tackling today’s most pressing challenges to shape the markets of tomorrow.

As such, the polycrisis represents a fundamental shift that could be an opportunity. By addressing challenges directly, reframing vulnerabilities and leading with clarity, innovators can inspire trust and demonstrate resilience. Investors have a chance to back the leaders who will shape the future. Together, innovators and investors have the power to adapt, grow and thrive in a world defined by uncertainty.

The innovators who name, own and reframe risk to create their own narrative will broadcast the resilience that investors crave. Inoculate early, lead with purpose and transform volatility into your competitive moat.

Learn how UpLink, a World Economic Forum initiative, is building innovation ecosystems that enable early-stage, purpose-driven entrepreneurs to scale their start-ups.