How to Make the Most of Your Startup's Big Fundraising Moment

Scott Brown Contributor

Prior to becoming CMO at Hum Capital, Scott Brown led marketing for Sapphire Ventures, a $6 billion venture capital firm based in the United States and Europe. He has had a career spanning over 20 years in enterprise technology, holding senior marketing positions at Facebook, Google, Cisco and several startups.

Early-stage startups face significant fundraising headwinds, but early-stage investing remains a bright spot for startups until they reach the Series B towers.

Traditional venture capital dollars are harder to come by these days, but institutional investors are still looking for smart investments, and industry watchers are hungry for good news that a new round of funding suggests . While the market is uncertain, founders should be prepared to use their capital injections as an asset that extends beyond the cash it represents.

In any market environment, a fundraising event can serve as a vote of confidence or validation from investors, supporting your business growth through talent acquisition and brand awareness. brand. Regardless of the size of the cycle, securing external investment is a key step in the journey of many companies, and it often requires considerable effort. However, after investing all that work, many founders make the mistake of letting a moment of funding pass without extracting all the value they could have.

In my 20+ years as a marketing executive at startups, venture capitalists, and large tech companies, I've helped dozens of companies announce funding news, ranging from $1 million pre-seed rounds to $50 million increments.

Here is my playbook for founders looking to make the most of their big money moments:

Rethinking assumptions about fundraising timeliness

Publishing funding information allows you to create additional value beyond the capital investment by showcasing your momentum and building brand awareness.

Founders may ignore the point of announcing funding news for several reasons, but the most important is to assume that the round isn't "big enough" to merit attention. When you see other companies raising hundreds of millions of dollars, it can be easy to think that no one will be interested in hearing about your startup's much smaller round.

Fortunately, that's not true. While the big numbers can grab the headlines, the smaller ones can still generate interest if the ad is executed well and you can tie the news to a larger industry/tech/business trend. society.

Another reason founders are hesitant is that some or all of the new capital is going through a debt investment. Although this is becoming more and more common, especially as venture capitalists pump breaks, there is still a certain stigma around debt funding, and founders may fear being penalized for adding new debt on their balance sheets.

However, securing a debt investment often requires even more rigor than an equity investment. Therefore, highlighting an increase in debt may actually indicate that your business fundamentals and revenue numbers are strong enough to support repayment.

Founders may also worry about giving competitors too much information about their company and prefer to move forward while keeping a low profile. There are benefits to keeping certain information secret, but it's important not to focus too much on building behind closed doors or risk missing the opportunity to get more visibility with prospects and partners who will generate revenue. .

Finally, funding announcements sometimes aren't at the top of a founder's long to-do list, largely because they don't know how to handle an announcement or don't have the marketing expertise to execute it effectively. This next section should help you on that front.

Three steps to maximizing the marketing value of your fundraiser

The future is unknown, so when you have a locked funding round and money in the bank, you have the opportunity to make the biggest impact possible with the news you have in hand.

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To capitalize on this moment and be successful, you must:

Step 1: Plan ahead

Preparing a fundraising announcement takes time and strategic thinking. As soon as you've reached the point in your conversations with investors where term sheets are likely the next step, you need to get your marketing team together to start working on a plan. This includes early alignment with your investors on their ability to participate in a news...