You know that you will need capital to grow your business but may not be sure how to attract the right investors. We believe in a “growing capital” process where you take steps to build relationships with investors even before you are ready to raise money. No one activity is going to secure your success in a fundraise. When preparing for a future fundraise, you should create a strategy with many different approaches. One important element of this strategy should be public relations.
You should speak with a licensed investment banker about whether you can reference a specific deal in your PR content. It depends on the type of offering that you are issuing. What I am talking about in this post is using Public Relations not to market a specific deal but to build up your brand and get investors excited about your company.
Why integrate Public Relations into your capital raising strategy
The most appealing use of PR when raising capital would be to get the attention of a prospective investor. Similar to the concept of inbound marketing, when investors find out about your company and seek you out, there is a much higher level of engagement than when you reach out directly to an investor.
A Harvard Business Review article found that VCs initiate contact with entrepreneurs in 30% of their deals. They spend time researching specific trends and connecting with entrepreneurs that seem to align with their vision. Building up your brand prior to a capital raise will make it more likely that investors come across your company during their research.
Validating your Story
Even if your PR efforts are not successful in getting investors to reach out to you, they are still important. When you connect with investors, they will do a quick google search about you before considering moving forward.
Otto Pohl, a communications consultant explains that for a startup, Press releases can be a form of pocket litter. Pocket litter refers to the items that Cold War spies would carry in their pockets to support their cover stories if they were captured. When an investor researches your company, it is helpful to have your message consistent and corroborated by different sources. Highlighting a product release or valuable hire can be a great way to do this.
How to integrate PR into your capital raise
Start with understanding your investor persona
The end goal of your marketing and PR efforts here is earning the attention and confidence of investors. The focus should be on sharing information that is interesting to your target investors where they consume content. To do this, you need a strong understanding of your target investor. Consider whether your ideal investor is an angel, Venture Capital, Strategic Investor, Family Office or Retail investor. Within these categories, get more specific about the focus areas, and check sizes of your ideal investor. After you create an investor persona, research what this group is interested in and where they consume information such as traditional media, blogs, podcasts and YouTube channels.
Next understand the publication
Once you find relevant publications for your audience, the next step is to understand the author’s style. Start by outlining 10-15 publications that might be a good fit for your brand as well as your investor persona. Next, review recent content to get an idea of the types of stories that might be appropriate. Are there any topics that your founding team excels at that might interest the readers or listeners of these publications? Do they fit within the typical style and theme that the host/author uses?
We have a client who is an industrial 3D metal printing company, the CEO has extensive experience in additive and traditional manufacturing. The company is targeting strategic investors for their capital raise. We advised the CEO to reach out to podcasts geared towards manufacturing executives and talk about how integrating additive manufacturing into traditional manufacturing processes can improve cost and lead times. Through a thoughtful interview, the CEO could educate the audience, show that they are a thought leader in the industry, and gain visibility for the company. Since a strong management team is often cited as an important factor in an investment decision, highlighting the leadership team’s expertise is always a good thing.
Once you have gotten to know the style of the person you are reaching out to, personalize your pitch to include why you thought this story would be right for them and their audience.
Make sure to include
- The background of the person or company that you are highlighting and links to website and social media
- Outline research and stats that back up the topic you are proposing
- Links to any past publications if applicable
- Alternative topics or story ideas
The big picture of PR in capital raises
Remember, the goal is to encourage investors to take a closer look at your deal. Marketing expert, David Meerman Scott explains that the line between marketing and PR is blurring. All is not lost if you are having trouble gaining traction with journalists and influencers. Producing your own content through blogs, infographics, and white papers can also be effective.
Remember, perfection is the enemy of action. Once you have developed a solid strategy for your capital raise, you need to execute it. It is important to evaluate and adjust when necessary but do not get bogged down with so much analysis that you fail to take the necessary steps that will lead you to a successful capital raise.
At Colton Alexander, we believe in a strategic, well-rounded approach to growing capital. We help funding ready companies tell their stories to investors and other stakeholders. Our activities empower your company’s growth through preparation, planning, and practice.
Securities transactions effected through Weild & Co., member FINRA/SIPC
Alex Kramarchuk is a licensed investment banker and Managing Director of Colton Alexander, LLC. Colton Alexander provides strategic advisory services to public and private sector issuers through private placements of debt and equity, M&A, private markets research and advisory. Alex holds Series 7, 66 and 79 FINRA licenses. He is passionate about contributing to society through the formation of capital and its role as an engine of commerce in today’s market drive system. Colton Alexander, LLC is an affiliate of Weild & Co., broker-dealer.