Three Reasons Why Companies Looking For Investors Should Invest in Marketing First

Posted by admin | Uncategorized | Friday 12 December 2008 12:46 am

Whether you’re a venture capital firm seeking investors for your clients or a start-up seeking your own funding sources, don’t ignore the basics of self-promotion. Smart marketing can help cut through the clutter and make sure your message reaches its target. Here are three reasons why marketing should be central to your strategy:

1. During first quarter 2008, there were no venture-backed IPOs, marking the first time since 1978 that no IPOs were issued and representing a capital markets crisis for the start-up community [Source: National Venture Capital Assoc. and Thomson Reuters]

2. The Mergers & Acquisitions market had only 56 deals during first quarter 2008, one of the lowest quarterly levels in the past decade [Source: National Venture Capital Assoc. and Thomson Reuters]

3. Only one in six venture-back companies ever goes public and one in three is acquired [Source: National Venture Capital Assoc.]

In today’s tight economic and competitive environment, companies need every advantage to differentiate their business. With thousands of other companies vying for limited investment dollars and opportunities, you have to stand out. Good marketing techniques can help give you an edge. Here are five easy ways to make a difference:

  • Pitch letter – The pitch letter is your first impression to potential investors. A well-crafted pitch letter can make the difference between getting an appointment or getting your email deleted.

  • Opportunity sheet – The opportunity sheet is like a product sales sheet – with your company as the product. It provides a succinct story about why the potential investor should be interested.

  • Investor presentation – Once you have an appointment with a potential investor, don’t spend the valuable time reading off slides. The presentation should complement the story, not tell it for you. Remember, people buy from people they connect with. You can’t connect with someone who is so focused on reading slides they forget about their audience.

  • Web site copy – Most investors will check out your company web site as an easy way to validate your claims. First, make sure you have a site! Then, make sure it tells a compelling story. Straightforward, jargon-free copy that is interesting and well organized is a must.

  • “Make the case” collateral – For early to mid stage start-ups without a long track record of accomplishments or customers, basic collateral can help you make the case. This includes white papers, technical briefs, application notes and case studies.

    • Good marketing doesn’t have to be expensive or unwieldy. If you don’t have staff on hand to do the work, outsource it. A small investment in core marketing communications can help make sure your message reaches potential investors.

    Julie Preiss is a partner in http://JKPGroup.com/ a marketing communications consulting company. For more tips, visit http://JKPGroup.com/

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