Late-stage start-ups are facing major fundraising headwinds, but early-stage investing remains a bright spot for startups until they reach the Series B rounds.
Traditional venture capital funds are harder to come by these days, but institutional investors are still looking for smart investments, and industry watchers are hungry for good news that a new round of funding suggests. While the market is uncertain, founders should be prepared to use their capital injections as an asset that extends beyond the cash it represents.
In any market environment, a fundraising event can serve as a vote of confidence or validation from investors, supporting your business growth through talent acquisition and brand awareness. Regardless of the size of the cycle, securing external investment is a key step in the journey of many companies, and it often requires considerable effort. However, after investing all that work, many founders make the mistake of letting a moment of funding pass without extracting all the value they could have.
In my 20+ years as a marketing leader at startups, venture capital firms, and large tech companies, I’ve helped dozens of companies announce funding news, ranging from rounds of $1 million pre-seed to $50 million increments.
Here’s my playbook for founders looking to take their “big bucks” moments to the next level:
Rethinking assumptions about fundraising timeliness
Publishing funding information allows you to create additional value beyond the capital investment by highlighting your momentum and building brand awareness.
Founders can ignore the value of announcing funding news for several reasons, but the most important is to assume that the round isn’t “big enough” to merit attention. When you see other companies raising hundreds of millions of dollars, it can be easy to think that no one will be interested in hearing about your startup’s much smaller round.
Fortunately, that’s not true. While big numbers can grab headlines, small rounds can still generate interest if the ad is executed well and you can relate the news to a larger industry/tech/business trend. the society.
Another reason founders are hesitant is that some or all of the new capital is going through debt investment. While this is becoming more and more common, especially as venture capitalists pump breaks, there is still a certain stigma around debt funding, and founders may fear being penalized for adding new debt on their balance sheets.
However, securing a debt investment often requires even more rigor than an equity investment, so highlighting an increase in debt may actually indicate that your business fundamentals and earnings numbers are strong enough. to support the refund.
Founders may also worry about giving competitors too much information about their business and prefer to progress while flying under the radar. There are benefits to keeping certain information secret, but it’s important not to focus on building behind closed doors to the point of missing the opportunity to get more visibility with prospects and partners that will generate revenue.
Finally, sometimes funding announcements just aren’t at the top of a founder’s long to-do list, largely because they don’t know how to handle an announcement or don’t have the expertise. marketing to execute it effectively. This next section should help you on that front.
Three steps to maximizing the marketing value of your fundraiser
The future is unknown, so when you have a locked funding round and cash in the bank, you have the opportunity to make the biggest impact possible with the news you have in hand.
To take advantage of this moment and be successful, you must:
Step 1: Plan ahead
Preparing a fundraising announcement takes time and strategic thinking. As soon as you’ve reached the point in your conversations with investors where term sheets are likely the next step, you need to get your marketing team together to start working on a plan. This includes early alignment with your investors on their ability to participate in a news announcement.
Here are some key questions your marketing manager should consider:
- Who can provide public quotes or investment commentary?
- What are the key messages you would like to convey on this funding round and what messages would you like your investors to amplify?
- When is the investor available to review announcement materials and participate in possible media interviews?