An earlier version of this article was published in TechCrunch in January 2023.
In the current market, venture capital dollars are harder to come by, but institutional investors are still looking for smart investments, and industry watchers are hungry for the news a new round of financing suggests. While the current market is uncertain, founders need to be ready to view their capital infusions as an asset beyond the cash it represents.
In any market environment, a fundraising event can act as a vote of confidence or validation from investors, supporting your company’s growth via talent acquisition and brand awareness. No matter the size of the round, securing external investment is a key milestone in many companies’ journeys, and it often takes a tremendous amount of effort to complete. However, after putting all that work in, some founders make the mistake of letting a funding moment pass by without extracting all the value they could have from that moment in time.
Over the course of 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 $1 million pre-Seed rounds to $50 million raises.
Here’s my playbook for founders looking to make their “big money” moments go farther:
Rethink assumptions about fundraising news
Publicizing funding news lets you create incremental value beyond the capital investment by highlighting the momentum of your business and driving brand awareness.
Founders may overlook the value of announcing funding news for several reasons, but the biggest one is assuming the round isn’t “big enough” to warrant attention. When you see other companies raising hundreds of millions of dollars, it can be easy to think no one will be interested in hearing about your startup’s much smaller round.
Fortunately, that isn’t 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.
Founders may also worry about giving competitors too much information about their business and prefer to make progress while flying under the radar.
There are benefits to keeping certain information under wraps, but it’s important not to get so focused on building behind closed doors that you miss the opportunity to generate visibility with the prospects and partners that could drive revenue.
Finally, funding announcements are sometimes just not at the top of a founder’s long to-do list, largely because they are either unsure of how to run an announcement or lack the marketing expertise to execute it effectively. The early-stage companies Cervin Ventures invests in often do not have marketing staff with experience in publicizing a fundraise, so we’ve developed the following playbook to help our portfolio companies develop their announcement plan.
Three steps to maximize the marketing value of your fundraise
The future is unknown, so when you have a funding round locked up and cash in the bank, you have the opportunity to make the biggest impact you can with the news you have in hand.
To leverage this moment and be successful you need to:
Step 1: Plan ahead
Preparing for a fundraising announcement takes time and strategic thinking. As soon as you’ve reached the point in your investor conversations where term sheets are a likely next step, you should assemble your executive and marketing teams to start working on a plan. This includes aligning with your investors about their interest and ability to participate in a news announcement.
Some key questions your marketing lead should consider include:
- Who can offer compelling public quotes or commentary on the investment and what it means for the company or industry?
- What are the key messages the company would like to communicate about the round and what messages you would like your investors to amplify?
- When is the investor available to review announcement materials and participate in potential media interviews? Are there any limitations they have on what they can say, or what marketing activities they can participate in?
Once you know how much time the investor has to devote to the announcement, founders should work with their team to develop the broader announcement narrative, including how the news provides context for your company’s journey.
As part of narrative development, the team should also prepare a “Frequently Asked Questions” document tailored to the announcement, providing clear details about the news to help your company respond quickly to any inbound media interest. Don’t forget to arm your front-line employees, like sales and customer success, with these FAQs so they can respond to inquiries or use this exciting news in their daily activities.
Lastly, founders must work with the marketing team on a timeline that helps avoid accidentally “scooping” your own news. This can often happen with Form D filings with the Securities and Exchange Commission. Many startups are required to file a Form D within 1 days after completing a priced equity raise, and eagle-eyed reporters often monitor the SEC’s website for these filings. I’ve seen numerous instances of finance or legal teams filing a Form D on their own timeline and inadvertently breaking the funding news early, resulting in far less buzz than hoped for. (In these situations, reporters may write the 1-2 sentence “blurb” of the announcement and then decline to pursue a deeper article that could provide more details and context.)
To avoid this, ensure your announcement plan takes filing requirements into consideration, and communicate to your employees and investors the importance of keeping a lid on the news before the filing becomes public.
Step 2: Focus on owned and shared channels
Reporters’ inboxes are always crowded with news pitches, so it’s true that your fundraise may not be large enough to get noticed for a major story. That said, regardless of the size of your fundraise, you can always lean into the channels you control.
Your announcement plan should include details about how and when you’ll roll out the news on your company website, blog, social media profiles and email campaigns. It should also account for how you can leverage your investors’ owned channels to further extend the reach of the news. Messaging across all channels should be consistent with your broader narrative and tailored for key audiences on each channel.
Don’t overlook the basics, such as providing your sales team with a script for talking about this news with prospects or letting your customers know about the development and what it means for their ongoing relationship with you. To make it easy for your investors to help out, you should develop messaging and social media cards they can easily copy and paste into their channels at the appropriate time.
Step 3: Issue a press release
The value of putting a press release on the wire has been debated for years (here’s our perspective on whether press releases are still worth it). I believe issuing a well-written press release gives you a boost beyond being an artifact to engage reporters on and can serve as an important milestone in the public record of your company’s journey. Additional benefits of a press release include SEO benefits, as well as becoming another asset for any sales conversations with prospective customers.
Using either your in-house communications team or an external PR agency will make sure the right information is included in the release. They can also help ensure smooth distribution across newswires, industry newsletters and trade associations.
A few must-haves include:
- Your overall company narrative.
- Details on the investors involved in the fundraise.
- How you plan to use the funds (this is a great place to shape your growth narrative).
- Quote(s) from the CEO or founder.
- Quote(s) from the investor(s).
Once you’ve issued a release, your PR team can use it to pitch the news to local, national, and industry media outlets, increasing your chances of securing organic media coverage. The team can also help prepare your leadership team for interviews resulting from media outreach.
In the United States, to maximize the impact of your announcement – and make it into the daily VC funding roll-up newsletters – you should issue your release before 8 am Eastern Time between Tuesday and Thursday. Your website updates, social media posts, etc should go live as close to the release date as possible so that your target audience will see the news in multiple channels.
The finer points of your media strategy for your announcement, for example, pursuing pre-briefs or an exclusive article with a single news outlet is a deeper topic for separate blog posts.
