Beyond the pitch deck: How PR can boost investor confidence

On the upside however, the UK is showing signs of improvement and is finally starting to transition from this challenging phase. We can see that investor confidence has been building – with equity investment on the rise – inflation has calmed, and the Bank of England’s Monetary Policy Committee (MPC) has finally cut interest rates for the first time since March 2020. 

For startups looking for funding, this certainly signals good news when it comes to encouraging venture capitalists (VCs) and angel investors to back a startup.

That being said, even with more bullish investors on the scene, most founders will likely agree that successful fundraising remains one of the most challenging feats of starting a business, especially given the long list of other tasks they’re typically engrossed in. From validating your idea and perfecting your product or service, to assembling a strong founding team and establishing key business operations, founders have a lot to handle. And they must do so while being adaptable to feedback and on a limited budget – the latter of which makes funding all the more important. 

And this is why PR is so often overlooked. 

Why PR deserves a spot at the top of your strategy list

With all of these urgent tasks to juggle, immense pressure to gain funding and other challenges to navigate, it’s not uncommon for founders to push PR down on the priority list, often overlooking it entirely or deeming it less impactful in the short term. 

There are also those who don’t fully understand the long-term benefits of PR; benefits that – rather ironically – help support some of those other tasks often deemed far more important.

I’ve also met founders that believe media attention will naturally follow once their product or service gains traction, completely underestimating the proactive element of PR when it comes to not just attracting funding, but accelerating growth.

In actual fact, looking back on some of the world’s most successful startups, there are countless examples all showing that those pushing consistent PR efforts are more likely to attract funding than those that don’t. A few of the most well-known include:

Airbnb

Its founders’ PR strategy – which used some very creative and resourceful PR tactics to gain attention – played a critical role in its early success (not to mention its eventual unicorn status). Their Obama O’s and Cap’n McCain’s cereal campaign during the 2008 presidential election – where they sold politically-themed cereal boxes – is a great example of this. Executed when the company was just a year old and struggling financially, the PR stunt caught the attention of top tier media and even helped them generate some short-term revenue. But it wasn’t just about the money; here, PR helped them build a narrative of Airbnb as a creative and resilient company, which also caught the attention of investors. This campaign marked a turning point that led to their acceptance into Y Combinator, a startup accelerator programme, and ultimately, significant VC funding.

Slack

While now well known and loved – and even used by the team here at Luminous PR – Slack initially launched at a time when the market for workplace comms tools was super crowded. But thanks to their PR strategy, which was crafted around the product’s simplicity and user experience, they generated word-of-mouth from early adopters and tech influencers, which led to significant coverage from influential tech media. In 2014 – just eight months since its public launch – Slack raised $120 million at a $1.12 billion valuation without a formal marketing or sales team, relying almost entirely on PR and user recommendations. 

Dropbox

Another favourite at Luminous PR, Dropbox is known for using referral programmes to create a viral effect in their early days, but their success also hinged on their PR efforts. This included making a public debut at TechCrunch50 – a platform for startups to pitch to investors that was also heavily covered by the media, including TechCrunch. Dropbox’s CEO also shared their origin story on their site, forums and platforms like Hacker News, which gained attention from tech enthusiasts and influencers. All of this media and influencer buzz helped Dropbox attract investors, leading to rapid growth and multiple rounds of funding.

The reasons why the PR efforts from these startups worked – and PR for any startup in general is advised – are simple: 

Visibility through PR acts as a form of third-party validation

Whether we’re talking about angel investors, established VCs or any other type of investor, they all rely heavily on the media to both discover and vet potential investments. For those that have heard of you, but want to know more, appearing in a high-profile, hyper-relevant publication validates your business. In other words, if the media think you’re worth talking about, then you may be worth investing in. And for those that haven’t heard of you, getting featured in industry publications is one of the best ways a startup can catch the attention of investors, who must stay well informed of the news scene with current events, financial news, market trends, economic conditions, and the performance of specific sectors all potentially influencing the value of investments.

PR aids brand building and credibility

It’s a no-brainer that positive media coverage can enhance a company’s reputation. But PR – which is essentially the art of communicating your brand’s message to the public and building a positive association – helps establish credibility and trust with potential investors. It can elevate brand prominence, grow excitement about your product or service, help you differentiate your business from competition, and position you as a frontrunner. All of this is like a beacon to investors, helping shine a light on what it is you’re offering.

Once VCs invest, they too prioritise PR

Investor Influence on Media Coverage: Evidence from Venture Capital-Backed Startups – a Harvard Business School research paper published this year – found that VCs also take measures to increase media coverage of their portfolio companies. In fact, over 78% of VC respondents reported taking steps to increase media coverage of their portfolio companies, the primary reason being to enhance brand and awareness, followed by attracting potential clients and talent. Increased media coverage was also perceived to help in raising subsequent financing rounds. And the same report found that VCs prefer to use industry-specific media outlets, indicating a strategic approach to reaching relevant stakeholders rather than the general public. There is a lot that even startups yet to be backed by a VC can learn from these findings, with many benefits to be had by creating awareness and credibility early in their development​.

PR strategies for startups

Now that we’ve established why PR is important for not just attracting and securing initial investment, but keeping existing investors happy and even assisting in raising subsequent financing rounds, let’s move onto some of the most effective and simplest PR strategies for startups.

Press release

Arguably the most traditional way to achieve exposure is by sharing your business news with the media via a press release; something that you should definitely make a point of doing if you’re attempting to secure investment. This might include a new project or launch, new senior appointments, partnerships and previous funding news. If you don’t have any news right now, you can still achieve great coverage, you just need to work a little harder. For example, you might consider investing in a survey or a piece of research so that you can share new data-led insights about specific challenges your customers are facing.

Consider what you’ll include in ‘notes to editor’ – the final part of the press release. Ideally, it will include a succinct company description, including a brief history of the firm, the founders, product launches, award success and any funding to date. It can also be handy to have case studies ready, as the media – and indeed potential investors – will want to know about any projects you have successfully deployed so far. This should include testimonials from clients, as well as any stats or data that validate your work.

Thought leadership

These articles use your business’s opinions and expertise, instead of ‘news’. They focus more on individual profiles, rather than the business, and involve contributing guest content for relevant trade publications. While more time-intensive and taxing – in that they need a strong writer to craft them since non-commercial editorial quality content is what publications are after – they are well worth the effort. 

Here are a couple of thought leadership examples achieved for our clients:

• Open Access Government.
• Hydrogen Fuel News.
• Retail Technology Review. 

Expert commentary/newsjacking

Investors favour businesses that have strong opinions  and a smart team, and the practice of inserting a brand’s perspective into current news stories is a great way to do this. It can also boost exposure, ensuring the company remains relevant in discussions that matter to its industry; all of which helps businesses stay top of mind for investors. This is easier said than done though. Firstly, speed is critical. Getting your commentary out while the news is still trending increases visibility. However, being fast isn’t enough; you also need insightful, unique and relevant commentary that adds something new to the conversation. Offer smart analysis that deepens understanding rather than just repeating information.

PR stunts/events

Requiring quite a bit more creativity and strategic thinking, PR stunts and events – if done well – can be very effective when it comes to attracting investor attention and standing out in a crowded marketplace. It certainly worked for the likes of Airbnb, but there is also the risk of efforts not resonating, overshadowing the core message of the company or even backfiring – who remembers Tesla’s infamous window-breaking incident at their PR event unveiling the Cybertruck?

Other things to consider:

As well as considering what PR tactics will work best for your startup, there are a number of other things to be mindful of:

Tell the right story

All businesses have the potential to achieve great media coverage, but they must know how to tell the ‘right story’. Time and time again, we see startups focus on the technological aspects of their products. But that’s not what investors are interested in – they want to hear about the business potential and the promise of the business to the market. And the media? They want compelling narratives that resonate with their audience, focusing on the impact and relevance of a story rather than just the technical details. All of this needs to be kept in mind when writing everything from press releases, comment, thought leadership and even the media pitch.

Tell the right people

Knowing which journalists to reach out to is half the battle of good PR. Just a couple of months ago on LinkedIn, Zoe Kleinman, Technology Editor, BBC News shared the fact she had 4,000 unread PR emails in her BBC inbox, her LinkedIn private messages were overflowing, and she had pitches via Instagram DM, WhatsApp, text message, saying she was “utterly overwhelmed by people digitally shouting at me for their client (or themselves) to be heard, 24/7”. She also said that most of the comms she receives are not relevant to her. The point of the story? Your story needs to not just stand out, but be highly tailored to what that journalist is interested in. Always do your homework on the publications and journalists first, and don’t assume you need to be in the likes of the BBC, Forbes, or feature in the nationals’ business pages to get noticed. Many investors prefer to work with businesses in particular sectors or tech scenes, which should inform the direction of any PR activity you take. If your business fits into a specific niche, make sure your company is all over any trade media associated with it.

Network

We’re not talking about spending thousands on an exhibition stand here. Simply attending trade shows can be incredibly beneficial for connecting with investors and industry peers and to showcase your business. You might also consider creating a wishlist of your ideal investment firms and renowned angel investors, and then engage with them on social media; follow their stories and interests, and identify the events they frequent. The UK has a wealth of networking opportunities for investors and entrepreneurs, so sign up and make those connections. You never know when that passing conversation with an investor could pay off.

Share your media coverage

Don’t make the mistake of stopping efforts once media coverage has been achieved – it’s important to share the positive news across all your channels, whether it’s social media, your website, blog or newsletter. Consider a ‘Company news’ section on your website, this can include press releases about partnerships or previous funding, as well as any media coverage you have achieved. And encourage employees and partners to share the good news too. Be sure to tag or mention the publication (and journalist) in your posts: a like or share from them can help push your brand even further. Hopefully, in front of an investor.

Do a ‘comms audit’

If you’re going to drive media, investors and potential customers to your website and social media channels, make sure your messaging is on-brand, up-to-date and consistent across them all. Scrutinise these channels through the eyes of an investor, because they will come looking. Ask yourself – is your brand engaging, knowledgeable, helpful and most importantly present – by that we mean, are your channels updated regularly? Does the imagery you’re sharing reflect your brand? Have you included links back to your website, shared industry news and joined conversations on related topics?

Want to find out more about using PR as part of your investment strategy? We can support strategic content creation, PR & media relations and more. Get in touch and one of our team will reach out to discuss your investment goals and how PR can help.