6 Investment Strategies For Founders Raising Funding

April 3, 2017

Marketing is evolving, and the content that’s produced by you and your marketing team is no longer restricted to one department. You probably know that content can boost sales, and it plays an important role in attracting, hiring, and training the right talent. But it can also help founders and leaders cut through the noise and secure funding from new investors.

by John Hall
*story originally published on Forbes.com

 

A lot of leaders I talk with have a hard enough time understanding how content and sales work together, so investor relations might be even harder to get on board with. But it makes a lot of sense when you think about it; content fuels relationships with investors the same way it does with your customers and clients. You just have to adjust your approach a little.

Still, landing the funding you need by creating and distributing content itself can be challenging. You’ve got to pair that content with trends, insights, and advice from actual investors to make fundraising a little easier.

Some team members of mine recently attended the Montgomery Summit, which is one of the top conferences for entrepreneurs to check out. It was filled with different types of investment firms, as well as fast-growing companies pitching their ideas in hopes of garnering interest from investors.

After the event, my team followed up with attendees representing many types of funding: venture capital (VC), corporate venture capital (CVC), advisors who guide entrepreneurs, and banks that help founders attract funding offers. My team collected their insights, and below are six ways founders and leaders can raise funding and use content to help them:

 1. Don’t force a square peg into a round hole.

The best thing a founder can do is actually solve a problem in his or her market, which sounds like common sense. It can be easy to forget, however, when you’re trying to disrupt an industry or scrambling to stand out among tough competition.

Too many founders pitch solutions in search of problems, trying to put square pegs into round holes. Rob Schneider, head of corporate development at GroupM, advises founders to remember the basics. Instead of forcing solutions that are innovative for the sake of being innovative, founders must frame solutions in ways that speak to the actual business challenges and needs of their customers.

Help investors connect the dots between a problem and your solution by putting yourself in consumers’ shoes instead of just pitching a solution you cooked up that sounds cutting-edge, and communicate that in your published content.

2. Look for investors who understand your “why.”

Scott Porter, EY partner and Entrepreneur Of The Year program director for the greater Los Angeles area, as well as a moderator for one of the conference sessions, emphasized the fact that there are different types of venture capital firms out there, and finding one that understands the “why” behind your idea will ensure you have a great longer-term business partner. Find an investor who supports the purpose behind your business, not one who wants to remain hands-off.

VCs aren’t just looking to hand you a check. They’re entering into a long-term relationship with you, and they want to make sure your style is consistent with their investment philosophies. Knowing your “why” and letting that guide your content can make that relationship last.

3. Start building relationships with potential investors yesterday.

Even 15 years ago, looking for capital used to be a mystery, but today, everything is at your fingertips. Brian Hopcraft from Lewis & Clark Ventures explained that there’s so much information supplied by VC firms online today that it’s never been easier to find funds, understand how VC firms think, and learn what matters to them.

While information is easy to find online, actual relationships are still valuable. Before you start raising capital, you’ve got to plant seeds through networking. Use content to put yourself top of mind with investors you want to build relationships with, and then sit down to have coffee, seek advice, and get a funder’s feedback. A strong relationship will last well after the investment takes place, so shoot for one that allows you to get the full value from the partnership.

4. Show your crazy side.

This might be controversial advice, but Michael Berolzheimer from Bee Partners says you shouldn’t be afraid to tap into your own Steve Jobs-style reality distortion field. Create and share your “new reality” — where you see the future going and how you will make it happen — and showcase your excitement for this idea. It can be contagious.

Investors are looking for founders with big, ambitious goals, and they get jazzed about going big. Show them you’re all-in, communicate your passion, and share the experiences that have brought you to the point of being so steadfast in creating this new reality. Without that, you probably wouldn’t have the stomach for venturing into the world of entrepreneurship — and succeeding in it.

5. If you’re going with CVC, the more you know about the fund, the better.

Just because you’ve found a company willing to invest in yours doesn’t automatically mean you should take the deal. Yash Patel at Telstra Ventures pointed out that some investment companies have solid expertise to offer startups and growing companies, while some will be hands-off investors.

His advice to founders is to be selective and realistic about which CVC funds can add the value you’re looking for — not just the money. CVCs will have ideas about how the relationship will work, but bring your own vision to the table. To get real value from this arrangement, you need to understand how CVCs operate. Are they flat-out acquiring your company? Reselling your product or service? Have a clear idea of how the ideal partnership would look coming in.

6. Minority stakes arent taboo in today’s market.

For founders who think private equity firms are only interested in a complete buyout in order to achieve liquidity, this tip is for you. Chris Hastings, who leads the Private Capital Group at tech-focused investment bank Signal Hill, said he’s noticed private equity firms are more comfortable taking a minority stake in a company than they were even a few years ago. The market is so hot right now that investors are adjusting their approaches because they’re missing out on great opportunities. They’re also more open to providing liquidity to founders who have been involved in a company for a long time, which means founders looking to sell their shares can benefit.

Fundraising can be a stressful time for any founder or company leadership team. As you raise funds for your company, don’t forget how trends and content can work together to make your job easier.

John Hall is the CEO and co-founder of Influence & Co., a keynote speaker, and the author of “Top of Mind.”

Click here to view the original story on Forbes.com.