How Startups can Utilise Public Relations to Attract Investors
Founders should seek coverage not only after they have fundraised, but at every stage of their journey
If you scan the headlines of any tech publication focused on the Asia-Pacific region, you’ll notice a common theme: fundraising. Entrepreneurs, in short, like to go to the press when they have raised angel investing or venture capital.
While this approach may get companies a temporary boost in publicity, it is short-sighted and may count as an example of the cart pulling the horse: Founders should seek coverage not only after they have fundraised, but at every stage of their journey in order to continually attract the best investors. Investors, you see, have universal concerns for every phase of a startup, so founders should use the press as an opportunity to dispel them.
With early-stage startups, for example, angel investors face two major risks. The first risk is the product: Your solution may not be something that people want or need. Founders can address this concern by showing that their startup has achieved product-market fit through the early adopters who have bought into their solution. Established names, such as large, multinational corporations, will especially lend startups an air of credibility with investors. You can invite journalists to show how these known companies are deploying your solution to great advantage. In summary - shout out loud about your product traction and let the world know.
The second risk for early-stage startups - and one that continues throughout the product lifecycle - is team risk. While your solution may address a want or a need, your team may not have the right expertise to develop and scale it. You can mitigate these investors concerns through the press as well. In any interviews about your company, highlight your people as much as your product. What unique qualifications does your team possess to create and execute this solution? You can spotlight everything from your education to your experience - what matters is that you illustrate how your team has a competitive advantage to make your product succeed in the market.
Even after startups find their initial market traction, institutional and private investors will still have major concerns. Smart entrepreneurs would again be wise to speak to these risks in the press. In the growth phase, for example, the first risk relates to the company’s momentum and the market opportunity: Either the addressable market may not be big enough as initially perceived (and thus no longer investable), or the company may not be scaling fast enough - a competitor may seize market leadership before they do.
Entrepreneurs can tackle these concerns publicly through press coverage that documents both their growth to date as well as the market opportunity still available to capture. The growth portrayed can be both internal (i.e. employee headcount, product offerings) and external (i.e. users, clients, revenue). The key in this narrative is to show momentum: Your startup has already made significant progress and is on track to achieve even greater goals in this space.
The other major risk for startups in the growth phase is execution risk: Your team will make strategic missteps that will place it at a disadvantage in the business environment. The best way to assuage this concern is by proving that you are building a defensible moat around your market position. In the press, you can celebrate a major strategic partnership that you just established or a key integration with another product that you achieved. What is essential is that you depict the piece-by-piece development of a defensible moat around your company, and how no one - not even a well-capitalized competitor - can cross it.
Building a long-term focus on investor relations
To fully realize the opportunity of press coverage as a channel for investor relations, of course, entrepreneurs need to first shake the common view that publicity is just a means to celebrate and congratulate your team for successful fundraising. The best use of publicity is the exact opposite: You should instead use each chance to speak with the press as an avenue to pitch a carefully calibrated message to potential investors. Once you develop a media narrative that your company is capable of handling all product, team, execution, and market risks, you’ll have investors reaching out to you. These inbound leads will spare you from the intensive process of actively seeking out investors, allowing you to focus even more attention on what matters the most: your product.
Akarsh Dhaiya is a venture capitalist who works with VentureBuilders.nl and serves as managing partner at Rocket Equities, an M&A advisory firm based in the Philippines. With a degree in engineering and sincere interest in ML and AI, Akarsh is a tech enthusiast who loves working with startups and new ideas, he is currently pursuing his MBA from INSEAD and has passed CFA level II.