How to make the most of your startup’s big fundraising moment
Scott Brown was the marketing manager at Sapphire Ventures, a $6-billion VC firm based in Europe and the U.S. before he became CMO at Hum Capital. His 20 year career in enterprise technology has seen him hold senior marketing positions at Cisco, Facebook, Google, and Cisco, as well as several startups.
Late-stage startups can be found Despite facing major fundraising headwinds early-stage investing is a viable option. Still a bright spot Startups until they reach Series B rounds
Although traditional venture capital dollars are becoming harder to find, institutional investors are still looking for smart investments. Industry watchers are eager for the good news that a new round is offering. Although the market is uncertain founders must be prepared to use capital infusions as assets beyond the cash they represent.
A fundraising event can be a validation or vote of confidence from investors. It will support your company’s growth through talent acquisition and brand awareness. It doesn’t matter how large the round is, securing outside investment is a crucial milestone in many companies’ journeys. This often takes a lot of work. Many founders, however, make the mistake of letting funding moments pass without gaining all the value they could have.
Over my 20 year career as a marketing leader for startups, venture capital firms, and large tech companies, I have helped dozens of companies announce funding news. These range from $1 million pre-seed rounds up to $50 million raises.
Here’s my guide for founders who want to make their “big-money” moments more memorable:
Rethink your assumptions about fundraising news
Publicizing funding news can help you increase your brand awareness and highlight your momentum.
Although founders might overlook the importance of announcing funding news, the most important reason is that they assume the round is not “big enough” for the media to pay attention. It can be easy for founders to assume that no one will be interested when you tell them about your smaller round if they see other companies raising hundreds or millions of dollars.
This is not true. While big numbers may draw splashy headlines, smaller rounds can still drive interest if the announcement is executed well and you can connect the news with some larger industry/technology/societal trend.
Another reason founders hesitate to invest in debt is that they don’t know how much of the capital will be available. It’s not recommended. More commonDespite the fact that VC investors are giving away huge amounts of money, there is still a stigma surrounding debt funding. Founders may be concerned about being penalized for adding debts to their balance sheets.
Securing a loan investment is more difficult than an equity investment. Therefore, highlighting a debt raise could indicate that your business’ fundamentals are strong enough to support repayment.
Some founders are afraid of giving too much information to competitors and prefer to keep their business under the radar. While there are some benefits to keeping certain information secret, it is important not to be so focused on building behind closed doors as to miss the opportunity to gain more visibility with prospects and partners that will generate revenue.
Funding announcements may not be at the top of founders’ to-do lists. This is due to the fact that they are unsure how to make them or lack the marketing skills to do it well. This section should help you on this front.
Three steps to maximize your fundraise’s marketing value
The future is uncertain, so if you have a funding round secured and cash in the bank, then you have the opportunity make the most of the news you have.
You must do these things to make the most of this moment and be successful
Step 1: Make a plan.
It takes time and strategic thinking to prepare for a fundraising announcement. Once you have reached the point where term sheets seem likely next steps in your investor conversations, you can gather your marketing team and begin to create a plan. This includes talking to your investors about their willingness to participate in a news release.
Marketing leaders should ask these key questions:
- Who can provide commentary or public quotes on investments?
- What are your key messages about this round? And what messages would you like your investors amplifying?
- Is the investor available to review announcement materials or participate in media interviews?
I’m a journalist who specializes in investigative reporting and writing. I have written for the New York Times and other publications.