For young companies, raising money is difficult, At best, in recent years, 2 in 10 companies ever complete a round of funding. And it’s getting harder according to surveys and industry reports.
So, if you want to be in that 2-in-10, you have to stand out.
Think about a normal sales model. Awareness and interest are the first two gates. You have to get investors through those before they’re ready to dig deeper into your company, but I see most companies try to jump ahead too fast.
I have two specific suggestions for standing out so you get noticed, or as I just said, doing a better job at creating awareness and interest.
First, you have to have a really hard hitting and compelling 1 sentence explanation of the problem you solve. Then, you need a 1 to 2 minute long explanation of what you do and why the market is big for it.
In preparing this video, I reviewed every company on Fundable, 162 companies, just to get a consistent sample of a small slice of the fundraising market.
I wasn’t surprised that almost none of them had a crisp introductory story.
Let me give you a concrete example of one of the hardest hitting introductory statements I’ve ever come up with. Ready?
Hospital staff communications errors are the number 3 killer in this country after heart disease and cancer, and that’s what we solve.
Think about that statement as the first thing a potential investor sees. We’ve made the problem big; we’ve made it scary. Note I haven’t even said how we solve it. But we sure should have some people interested.
You need to put that statement everywhere on the first things that investors see about you. Linkedin, your own web site, Youtube, and any fundraising platforms you’re on.
On Fundable, for example, you have a 2 by 2 and a half inch box among 8 that appear at a time on screen.
None of the companies I reviewed on the site had anything close to a hard hitting statement in their box. Most had their logo, a picture of their product or a bland description of their product or service.
So getting to, and fully using a crisp problem/benefit statement is the first thing you really need to get to, to be in that 2 in 10.
The second suggestion I have is that most companies are missing the boat on the power of video. Video does two big things for you – visibility and credibility. And it’s cheap.
What’s one of the hardest things for young companies to generate, visibility – to customers, to prospective investors, to potential partners. You can write press releases, but they don’ t do much, even if you spend the thousand dollars it takes to truly distribute widely. That content just doesn’t go anywhere in today’s world.
But, what’s the most in-demand and promoted content on the internet. That’s right, video.
What do the fastest-growing social channels feature? And, Video is prioritized in search in all browsers and channels, even Linkedin and X/Twitter. While our kids are posting videos all day, companies are missing the opportunity to raise their visibility DRAMATICALLY.
A key part of driving visibility is generating content. Do you want to waste time writing things that go nowhere?
Video content is also more compelling than written words. People have lived with TV so long, they’d rather hear you say it than read it themselves. And written words don’t convey emotion or emphasis very well.
Companies also struggle to come up with content. When you get used to the process, you can crank out quick videos to comment on almost anything, giving you another visibility shot and a chance to reiterate your value proposition.
The second key thing that video delivers is something that you can only achieve otherwise through a face-to-face meeting, and that’s credibility.
For video, that means first-person interview style videos. Close in, so viewers can see your eyes, which is where people see your conviction, passion and truthfulness. As a result, these can be a way to significantly accelerate potential investors along their diligence path.
For further proof, my review of Fundable found that twice as many of the companies that got funded had videos compared to those that weren’t.
The best part is that these kinds of interview style videos are easy, quick and inexpensive. I’ve got a link at the end of this video to my web site where you can see a number of other good examples.
Looking into the camera can be a little intimidating, so I usually recommend the interview style where the subject is looking at the interviewer who is sitting just off camera.
Remember, the reason to do these things is to get your company into that 2 in 10 of companies that stand out and get funded.
If you need help with tightening your message or shooting video, I’m happy to help. I ran investor relations for 30 years across 6 different public companies, usually also running PR corporate communications and federal lobbying, and I’ve worked with half a dozen start-ups, so I’m pretty good at helping nail down tight messaging. I also do my own video production, as you’ll see in the examples with the link coming up next on the end card.
As a final note to prove my point, go to Fundable. Scroll through as you think about what I’ve said here, and I think the points will be driven home. Thanks.
