Early-stage investing is still a good place to find a startup until they hit Series B rounds.
Traditional venture capital dollars are harder to come by these days, but institutional investors are still looking for smart investments, and industry watchers are hungry for the good news. While the market is uncertain, founders need to be prepared to use their capital as an asset that goes well beyond the cash they represent.
Raising money can act as a vote of confidence or validation from investors, supporting your company's growth via talent acquisition and brand awareness. It often takes a tremendous amount of effort to get external investment in a company, even if the round is small. Many entrepreneurs make the mistake of letting a funding moment pass by without taking all the value they could have.
I have helped dozens of companies announce funding news, from $1 million pre-seed rounds to $50 million raises.
If you want to make your big money moments go farther, here's what you need to do.
Publicizing funding news lets you create incremental value beyond the capital investment by highlighting your momentum and driving brand awareness.
If the round isn't big enough to warrant attention, the value of announcing funding news isn't worth it. It can be hard to believe that no one will be interested in hearing about your startup's smaller round.
That isn't true. Smaller rounds can still drive interest if the announcement is executed well and connected to larger industry trends.
If all or part of the new capital is through a debt investment, founders are hesitant. Even though it is becoming more common, there is still some stigma surrounding debt funding, and founders may worry that they will be punished for adding debt to their balance sheets.
It is important to highlight a debt raise in order to show your business is sound enough to support repayment.
While flying under the radar, founders may be concerned about giving competitors too much information about their business. It is important not to get so focused on building behind closed doors that you miss the chance to get more visibility with the prospects and partners that will drive revenue.
Funding announcements are not usually at the top of a founder's to-do list because they are either unsure of how to run an announcement or lack marketing expertise. That front should be helped by this section.
When you have a funding round locked up and cash in the bank, you have the chance to make the biggest impact possible with the news you have in hand.
You need to use this moment to your advantage.
It takes a lot of time and thought to prepare for a announcement. When you reach the point in your investor conversations where term sheets are a likely next step, you should assemble your marketing team to begin working on a plan. Aligning with your investors early about their ability to participate in news announcements is part of this.
The questions your marketing lead should ask are listed below.
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