There are many factors that need to come together for a startup to succeed. A solid plan, focused mission statement, and experienced founding team are all essential. Even when the internal pieces are in place, you need one more thing to gain momentum quickly: external resources.
Venture capitalists (VCs for short) are a common way for fledgling businesses to fund the earliest stages of business formulation and growth. However, this kind of startup funding isn’t free, nor is it easy to access.
You need to court VCs the right way if you want them to fund you. One of the best ways to do that is through growth marketing. This is an effective, affordable form of marketing that can help you gain the eye of VCs no matter what startup stage you’re in.
Here are a few tips and suggestions to help an entrepreneur secure venture capital funding.
Understand What a VC Is in the First Place
The term “venture capitalist” puts a certain degree of emphasis on the individual — and in a sense, that’s true. When you seek VC funding, you are interacting with venture investors.
When you break it down, though, a venture capital investor provides more about the specific resources (including, but not limited to cash) rather than the individuals who provide them. That is what the term “venture capital” is referring to.
For instance, Investopedia describes venture capital as “money, technical, or managerial expertise provided by investors to startup firms with long-term growth potential.” In other words, venture funding consists of a combination of three things:
- Financial funding
- Technical support
- Managerial expertise
Together, these are lumped into the concept of “venture capital funds.” Young companies seek this form of financing to establish themselves and become profitable.
If you’re looking for VC money, rest assured that you’re not the only company doing so. Every VC has to choose from a myriad of young brands, all with varying degrees of potential. Growth marketing can help you position your company to stand out from this crowd of suitors.
Positioning Yourself to Attract VCs Through Growth Marketing
You want a VC firm to see your startup as a healthy, growing business. In order to guide an investment decision, it’s crucial to have a solid business model and business plan. However, funding will also depend on the stage of growth you’re experiencing and what kind of funding you’re requesting.
The Stages of VC Funding
VC financing is provided via several “rounds” over the course of a startup’s growth cycle. Seed round funding gets things started. Early stage funding (often referred to as series A funding, series B funding, and series C funding) involves large cash infusions and additional support to build on early growth. Late stage funding (series D, E, and F rounds) feeds a thriving young business, helping it dominate its market.
Consider what stage you’re in and if you come across in that way to investors. Small businesses looking for series D funding from a potential investor, for example, should be well-established and seeking to grow your product line and expand into new markets.
Using Growth Marketing to Impress VCs
In most cases, you want a VC to see your company as one that is already active and building a reputation. Growth marketing is an ideal investment to achieve this in a synergistic fashion.
Growth marketing is cost-effective, a data-driven approach to marketing that focuses on the customer to facilitate sustainable long-term growth. It integrates three key growth marketing pillars.
Digital PR Builds Credibility
Digital PR fosters industry credibility by accumulating public mentions from third-party entities across yours and related industries. This helps build a sense of trust in VCs as they see other companies and individuals willing to reference and, at times, even endorse your brand.
Content Strategy Establishes Authority
Content strategy builds your authority by publishing high-quality online resources designed to help customers at various stages along the customer journey. This signals to fund managers that you know what you’re talking about and have the wisdom, knowledge, and experience to go the distance.
SEO Strategy Boosts Visibility
Search engine optimization goes hand-in-hand with content strategy. SEO helps increase your chances of receiving a VC investment by boosting visibility. This makes it easier for VCs to see your brand pop up on SERPs (search engine results pages).
Together, these three growth marketing tactics enable a young brand to quickly establish a pattern of upward marketing momentum. This makes them more impressive as VCs conduct research into their brand and consider making an investment.
Attracting VC Funding for Your Startup
Venture capital firms are a unique form of private equity for a business. They provide various forms of seed funding and other resources that can streamline a startup’s path to profitability.
From internal factors like a competent C-suite and clean balance sheet to external considerations like growth marketing, make sure you set the stage before looking into VC funding. That way, when you begin to make inquiries, you’ll stand out as a startup that knows its business and has plenty of potential for future profit.