For startups, securing funding is a crucial milestone that deserves recognition and celebration. It not only validates the company's potential and mission but also brings about numerous benefits, including increased credibility, attracting top talent, and expanding your customer base.
During a recent Technology Section webinar entitled “How Do I Make the Most of Our Funding News? An Insider’s Guide to Getting the Attention of Media,” speakers Peter Delevett, director of communications, from venture capital firm National Grid Partners (NGP) and Elaine Stiles, group vice president, from Business Wire shared their insights with the Technology Section’s Executive Committee member and SVP at Padilla, @Amy Fisher, APR.
First, it is important to lay out the different funding series/rounds:
- Pre-seed funding typically comes from founders, close friends and family.
- Angel funding is used to bring in the first outside money.
- Seed funding is the first official equity funding stage and typically allows you to start hiring staff.
- Series A comes when the company has a strong business strategy and model.
- Series B comes when the company is past the development stage and demonstrates it can grow its business.
- Series C comes when the company has been successful and needs capital to grow whether expanding into new markets, developing new products, or acquiring another company. Series C may be the last venture round before company decides on an exit strategy. This could be going public, merging with another organization or getting acquired.
- Series D and E are more rare but typically happen when a company is still trying to achieve more of what it set out to do with Series C funding.
Funding rounds, whether in the early stages or later stages of a company's growth, provide a badge of validation for the business. So why announce them to the media and the market? There are several reasons:
- Attract and Retain Talent: Publicizing funding rounds helps attract top talent to the company. Potential employees see a well-funded business as a more secure and promising workplace. In addition, it can boost morale for existing employees, who can take pride in being associated with a stable, well-funded organization that believes in its mission.
- Secure Future Investors: Funding announcements can catch the attention of future investors who might be interested in partnering with an already well-backed company.
- Customer Security and Growth: Announcing funding is a good way to let your customers know about your financial stability and backing, which enhances trust in the brand. It shows that you are supported by outside financial partners that are (literally) invested in your future growth.
When it comes to the announcement, there are several key factors to success:
- Media Strategy: Announcing funding rounds is not just about emailing a few reporters or putting out a press release on a news wire service. It requires a well-thought-out media strategy and plan. Companies need to manage expectations and understand that a successful funding announcement goes beyond merely disseminating information. Proactively engaging with media outlets and having a compelling story to share around the funding are crucial for ensuring broader coverage and reach.
- Collaboration: When it comes to preparing funding announcements, collaboration across the internal company’s leadership, investor and communications team, the external PR firm, and the funding partners (such as VC/PE firms and also their own PR teams) is essential. Each entity has a role to play in crafting the message, reviewing the content, and planning the release. Early conversations between these teams can streamline the process and ensure a smooth execution.
- Embargoes: Consider choosing a few media outlets for an embargo. This means that you share the news with a reporter before you release it to the market or issue a press release. Embargoes can help secure high quality, exclusive coverage and generate more interest.
- Look for Hooks: To make funding announcements more newsworthy, consider attaching additional hooks to the announcement, such as key hires, new customers or technological advancements, to demonstrate momentum and progress.
- Maximizing Social Media and Content: Companies should leverage social media broadly to share their funding announcements. Different messages tailored for each social channel can create a broader impact, and creating custom graphics or motion videos helps peak interest. Repurposing content, such as case studies and CEO videos, can keep the momentum going and maintain interest.
- News Wire Service: Wire services can be powerful tools for amplifying funding news, with options available for national, industry and local targeting. Putting funding news on the wire is recommended in most cases, unless the dollar amount is low. Monitoring metrics and click-through rates can help companies gauge the value and ROI of their wire service investments.
- Crunchbase: Maintaining an updated profile on investor platforms like Crunchbase is also highly valuable. This helps future investors understand your past funding rounds, key executives and recent news as they look for companies to invest in.
Announcing funding rounds is a crucial aspect of a company's growth strategy. Beyond celebrating success, funding announcements serve as powerful tools to attract talent, gain recognition, and expand customer bases. By adopting strategic approaches, companies can maximize the impact of their funding announcements and take their businesses to new heights.