As a VC, you recognize potential when you see it. When a promising startup pops up on your radar, it’s typically not hard for you to determine whether or not there’s investment value. Once you take the next step and add that startup to your portfolio, however, part of your role as an investor and advisor is to make sure everyone else sees the same potential and value in the startup as you do.
To do this, it’s critical to connect with the media who can share the startup’s story and product with a wider audience. And the best avenue to getting media coverage is through a startup PR firm that already has relationships with the top tech publications and writers.
But first, it’s important to understand what constitutes a good PR firm for tech startups. Here’s what VCs need to consider when it comes to startup PR.
If you haven’t ventured into startup PR before, then you may be wondering a couple things. First, what is the investment value of PR? And second, is it really necessary for a startup to work with a PR firm?
The market has never been more saturated. With thousands of startups attempting to establish themselves in their industry or become the next unicorn, PR and branding have become even more critical for early stage startups. An innovative product or strong user base is impressive, but it’s simply not enough to get noticed by the media when countless other startups have similar data to boast. This is where good PR comes into play. A PR firm can determine what gives the startup a slight edge and what will get the media to pay attention. With a strong media strategy in place, a startup is already a step ahead of the competition.
The VC’s role in startup PR
Next, you may be questioning what exactly your role is in the relationship between the PR firm and the startup. Portfolio companies of VCs are run by tech innovators who are often not marketing savvy. As an investor, part of your role is to advise on high-level strategies for their startup which includes brand marketing and awareness. It’s important to help them understand and take full advantage of PR as they build their brand–especially when you have a stake in the company and are dependent on their success. This is where having a network of startup PR firms that you can tap into becomes vital.
A good startup PR firm can help the team determine the startup’s brand positioning, refine their messaging, and craft a founder story prior to receiving media coverage. This is a fundamental stage in the brand communications process, but it’s often overlooked by founders who are preoccupied with the numbers and technology of their product. By connecting them to one of the PR firms in your network, you give them the opportunity to focus on internal operations, like refining their product, while the PR firm will take the lead on the external operations like branding and media relations. Consider building relationships with about 4-5 PR firms that you can connect to the different types of startups in your portfolio.
Maximize funding announcement news
Earned media is invaluable for startups. Not only does it add legitimacy and credibility to the brand, but it also helps build interest and drive traffic around critical events such as funding announcements. But to ensure that a funding announcement reaches the right people at the right time, there needs to be a media strategy in place well before it’s actually time to share the news.
By working with a startup PR firm, you can ensure that the funding announcement will reach the top tech media contacts and industry leaders. The best startup PR firms have already developed strong relationships with the media and can tap into their network to spur momentum around the announcement ahead of time. A milestone as pivotal as funding needs plenty of media coverage surrounding it in order to capitalize on the moment.
VCs would be wise to avoid RFPs when choosing a PR agency to work with their early stage portfolio companies. RFPs tend to attract high-dollar agencies with larger sales teams that are built to respond to the complex requirements of an RFP — a process normally associated with larger enterprises, not startups. That means that a startup could end up with an expensive agency that might not be a good financial or operational fit for their company during its crucial early years.
This can be avoided by jettisoning RFPs altogether. Startups need extreme agility from their agencies, and equally extreme value in the form of great results and affordability. That won’t happen nearly as often with larger agencies bolstered by well-practiced RFP presentations. Instead, consider a smaller and leaner agency that offers more flexibility and greater resulting value.
VCs benefit from startup PR, too
There is no shortage of players in venture capital, especially with the rise of micro-VC firms in recent years. Because the market is much more crowded than it was even five years ago, the competition to stack your portfolio with promising startups is steep. To attract the top startups, grow your portfolio, and become an industry leader, it’s essential to build your own brand.
The simplest way to build your brand as a VC is to build brand awareness around your portfolio companies. Think of it this way: when a startup receives media attention, so too will the VC who’s backing it. When your VC firm is mentioned in the news, not only does that generate awareness for your brand but it increases credibility. The media is essentially building your reputation for you, and with enough earned media for your firm, you can ultimately become a top player in the industry.
Return on investment
When you invest in a startup, you expect certain results. Investing in a PR campaign should be no different. Though, you may have to apply different metrics.
To measure PR ROI, you first have to determine the campaign goals and how they align with the overall business goals. If the goal of the campaign is to raise awareness for one of your early stage portfolio companies, then some key metrics to take into account would be website traffic, social engagement and contact conversions.
Or maybe the goal is to drive traffic around a funding announcement. In this case the metrics to consider would be the number of media placements secured combined with the traffic and engagement on the startup’s website.
Understanding the ROI of PR is crucial as an investor. Not only does it validate where your investment is going, but it can help you choose which PR firms to work with as the best startup PR firms are data-driven and have a solid grasp on tracking results.
Startup PR is a long game
An early stage startup may not receive media coverage right out of the gate. But even if they do, your job is far from over. PR is all about developing long term relationships with the media. And, as with all relationships in life, the point of the relationship with the media is that it’s mutually beneficial.
Whenever you want to spread the word about a new startup in your portfolio you can leverage your relationship with the media. Likewise, whenever a media contact is looking for an expert source, you will be top of mind and they can tap into your portfolio of startups to get the data or expert opinion they’re seeking. By developing relationships with the media through a PR firm that has already established media relationships, you’re setting your firm and your portfolio up for long term success.