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How to create effective explainer videos for financing

by Ana Lopez
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Opinions of contributing entrepreneurs are their own.

Explainer videos are one of the most powerful tools startups can use to secure seed funding.

What? Yes. Explainer videos evolved from mere marketing materials. Do you know that most of the video game, online card game and board game companies specially use explainer videos to raise money?


Explainer videos have the magic of giving the investors (and customers) the personalized gaming experience where they can visually understand the addictive factor and the can-go-viral side of the games.

OK. You may have seen all those emotional explainer videos where NGOs explain their charitable side, their entire workflow and its impact. Those videos amaze everyone, especially the donors. Likewise, your potential investors want to understand some of the simple features of your product or service.

Related: How to Start Using Explainer Videos (Infographic)

Is there a real demand for your product? Is it market oriented? Could it gradually turn more heads? Is there an X factor that differentiates your product from the competition?

And the best way to explain all this? A well-designed explainer video, no doubt.

statistical, about 59% of senior executivesveterans and tech experts who make the most important decisions prefer explainer videos to any other form of content that explains a business model.

That’s where explainer videos come into the seed funding scenario

First, explainer videos have become an essential resource for startups seeking seed capital. They provide a visually appealing and easy-to-understand overview of a company’s product or service and enable investors to quickly understand the company’s potential.

Second, using animation, graphics, and narration in explainer videos makes complex ideas simple and engaging, helping startups stand out from the competition and effectively communicate their unique value proposition.

In addition, explainer videos can demonstrate a company’s ability to market its product effectively and demonstrate that it understands its target audience. In today’s fast-paced and highly competitive startup ecosystem, explainer videos are a must-have tool for startups seeking seed funding.

Related: The secrets to making an explainer video stand out

Importance of explainer videos in start-up financing

Explainer videos are now an essential part of entrepreneurs’ early financing procedures. They support the clear, concise and aesthetically pleasing communication of the concept underlying the good or service.

The videos act as an introduction to potential investors, helping them to immediately understand the value proposition and growth potential. In addition, they enable entrepreneurs to differentiate themselves from the competition and gain investor confidence by showcasing their creativity and storytelling.

In addition, explainer videos promote a startup’s passion and energy, making it easier to get seed capital and attract potential investors.

So, how does a strong explainer video help you get seed capital in today’s cutthroat startup environment? This is how:

  • Improve understanding of the business concept.
  • Showcase the USP of your product.
  • Demonstrate market potential.
  • Build credibility and trust.
  • Take advantage of a competitive advantage.

How to create effective explainer videos for financing

Focus on these fundamental factors:

  • Clear messages: The video should clearly communicate the problem the startup is trying to solve and how their product or service solves it.
  • Simple images: The visuals should be simple, visually appealing and easy to understand, even for people with little prior knowledge of the industry.
  • Captivating narration: The narration should be engaging, clear and concise and effectively convey the key messages of the video.
  • Emphasize Unique Value Proposition (UVP): The video should highlight the unique value proposition of the startups and explain why their product or service differs from what is already available in the market.
  • Demonstrate proof of concept: The video should demonstrate the proof of concept and show how the product or service works and its potential impact.
  • Showing the team: The video should showcase the startup’s team and their expertise, highlighting their ability to execute their business plan.
  • Short Length: The video should be short, ideally less than 2 minutes, and straightforward to hold the viewer’s attention.
  • Professional quality: The video should have good lighting, sound and animation to look neat and professional.

Related: How Your Business Can Create Professional-Quality Videos on a Budget

Real-life examples of startups using explainer videos

Dropbox: The popular file sharing and storage company used an animated explainer video to effectively communicate their business idea and secure seed money from investors. The video, which has been viewed more than 20 million times, provided Dropbox with a simple and engaging way to demonstrate the value of its product.

Airbnb: Airbnb used an explainer video to secure start-up funding for their business. The video highlighted the pain points of traditional travel accommodations and how Airbnb solved these problems with its unique platform. The video effectively conveyed the company’s value proposition and helped secure seed capital from investors.

Square: Square, the mobile payments company, used an animated explainer video to effectively communicate their business idea and secure seed money from investors. The video provided Square with a simple and engaging way to demonstrate the value of its product and helped secure seed funding from investors.

limp: Slack, a team communication platform, used explainer videos to demonstrate the product’s benefits and attract potential investors. The videos effectively conveyed Slack’s unique value proposition and helped simplify the complex concept of communication and collaboration in the workplace.

Last words

Finally, explainer videos are clearly essential for startups looking for seed capital. They humanize your branding and enable you to promote the human communication effect that influences your potential investors.

They also enable startups to showcase their creativity, storytelling skills and vision for the future. By including an explainer video in the seed funding process, startups can significantly increase their chances of funding and pave the way for long-term success.

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