PR For Your Fundraising: Three Ways To Attract Investors And Raise Capital For A Startup

Global funding slowed substantially in the second quarter of 2022 due to economic concerns and a general decline in tech stocks, so it's more difficult for startups to attract new capital. There are still unicorns and companies that have raised mega-rounds, but overall, VC funding shows a 27% year-over-year decrease. 

Despite this, Pitchbook notes that conditions are still "historically founder-friendly", so there is plenty of hope. But this paradigm shift means founders must use every tool available to become as attractive as possible to investors.

Here's why PR is perfect for fundraising

Even though they're more selective now in the midst of economic uncertainty, investors are still constantly seeking new projects to invest in. While they do explore more traditional avenues for research into businesses, they frequently check media coverage across all major channels before making any investment decisions. 

Founders who understand how to highlight the right things in press releases, interviews, news features and other media are therefore more likely to form a positive impression in investors' minds. 

For example, one of our clients, Chicago-based grocery delivery startup Food Rocket, attracted an investor from Goldman Sachs after publishing a highly relevant Forbes op-ed about their unit economics and strategies for succeeding in the market. What’s more, another client, a Singapore-based biotech-startup was approached by one of the top three Asian VC funds for negotiations after publishing news of their $2.2 million funding round in major outlets including Entrepreneur and The Wall Street Journal.

The key takeaway: if investors see that you're worth talking about in a high-profile, hyper-relevant publication, they're more likely to think your business is worth a second look. Good PR helps you get more inbound requests.

Three talking points to help you attract investors via PR

So what kind of information will make investors pay attention? When deciding whether to invest in a startup, there are three things that investors are most interested in knowing about. Founders who can craft strong talking points around these things are more likely to get attention. 

1. A strong leadership team

Business is all about people, and investors want to know who will lead the company before they invest. 

I meet a lot of investors. One morning, during breakfast with a top European investor, I asked him to tell me the most important thing for a startup. I then asked him to prioritize this list in order of importance: team, sales, founder, marketing, investment, product, and market. 

The investor replied, without hesitation, that the team is the top priority, followed by the market, sales, and then the product. He explained that startup investors are looking for leaders with a track record of success because this typically demonstrates reliability, and potential for future achievements. They also want to see strong financial discipline, intelligence and strategic thinking. 

To capitalize on this in your PR, take stock of your leadership team’s professional experience, and leverage that knowledge to highlight their expertise. And ensure every team member has an engaging, informative bio demonstrating their strengths. 

2. Specific metrics and market needs

Investors aren't looking for common market statistics they can find online. They want to hear specifics about how your company is solving niche problems within the market, and how your product or service is positioned relative to other players in the industry. 

One of the main reasons startups fail is a lack of product-market fit. In about 35% of cases, startups choose to tackle a problem that's interesting to solve rather than one that serves a market need. This happened to Quibi and Airware; Airware in particular proved that it's not enough for a startup to raise good funding for an interesting idea. 

When discussing specific metrics and market needs in your PR, it's essential to demonstrate your startup's progress and potential. Most investors want to see that a company is prepared to grow and scale according to client needs. 

3. Industry trends and the future of your market

Don't be afraid to discuss other players. Demonstrate your market knowledge by offering engaging, practical analysis when events like acquisitions, mergers and competitor pivots happen within the industry. 

Talk about what's happening in the market; show investors that you're keeping up with the latest trends, and take every opportunity to indirectly demonstrate potential opportunities like future growth and possible exits. The more you can show how alive and in-demand your industry is – as well as how knowledgeable you are of how the industry operates – the more likely you will attract investor interest.

Leverage PR to polish your image and pique investor interest 

Investors today spend much more time studying projects before initiating first contact with a startup. This increased caution surrounding investments means it's not as easy to attract funding as it has been in the past. 

Many of our clients come back to tell us that publicity is indeed a powerful fundraising tool. We have had clients say that PR has "widened the entry funnel for investors" because they see articles in top publications and know immediately that the startup is trustworthy. Other clients have noted that reputation management gives them the endorsement they need to establish a positive reputation within the investor community and the international market.

The key to a successful communication strategy is to create the right conditions so that investors get the best possible image of your startup. This is why great PR is a fundraising startup's best friend.