Venture Capital PR 101: All you need to know

Obtaining funding is an important goal if you're a startup or scaleup. Venture capital public relations can help with this, but where should you start with so many different options? Here, we explain more about PR's role in raising venture capital for a startup or scaleup.

published: February 27, 2024
updated: February 28, 2024

It’s no secret that, as a startup, you compete with many others for airtime, customers, and financing. Let's face it. It can be tough. You need to stand out from the crowd. But how? Sometimes, even the most ‘unique’ product is one of many. Public relations can put you front and center in the news that your target audience and ideal investment partners consume. Effective PR can help your credibility and provide the ‘proof’ that some need to back you. It can also be leveraged to attract more loyal customers, not to mention star future employees.

With so many alternatives to venture capital and financing options such as crowdfunding, the space no longer belongs just to VC. Venture capital firms now also need PR to stand out and catch the interest of the most ambitious startups. In this blog post, we’ll explore the role of PR in venture capital, the role of public relations in securing capital for startups and scaleups, and how public relations can benefit venture capital firms.

What is the role of PR in Venture Capital?

Running public relations campaigns for businesses is all about managing reputation and disseminating information to frame an organization in a positive way and influence how others perceive it. The goal is to raise brand awareness and establish that brand as trustworthy.

A large part of PR is attracting customers and building long-term relationships. A wider opportunity lies in forming relationships or networks with other parties, such as venture capitalists. PR can be useful for startups wanting to raise VC and VC firms seeking the most desirable and promising startups for their portfolio.

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The role of public relations in securing VC for startups and scaleups

We all know that public relations can be invaluable for securing investment for startups and scaleups, but it's important to understand how it does this and what it can do at each stage of the venture.

Understanding funding rounds and the role of PR in attracting investors

Pre-seed represents the first stage in the investment journey. It's not really an official stage in the VC cycle since funding is often via informal methods, such as founder cash or borrowing from family and friends. This is the 'getting it off the ground' stage, so the risks are high, and with little or no proof of profitability, VC support is unlikely at this stage. Next begins the seed round. This occurs before the startup is operational. Here, funds go into developing the business's concept and refining its workings. Angel investors often step up here. At this point, there is still little on paper to share with investors. PR's focus will be the brand's story, the value the idea can bring, and why it's a necessary addition to the market.

Series A funding is where the first major round of VC financing begins! Funding now helps the business to expand more than refine. Funding amounts can get more serious here, as there is data to back up the viability of the business. Funding between £2 million to £15 million is not uncommon, and is secured in the form of selling shares to investors. The role of a PR campaign at this stage would be to focus on the brand’s profit-making capabilities.

With the development stages over, Series B and C funding comes when the firm is fully established. From here, funding is set to expand the business further. At these stages, brand reputation becomes the priority for PR efforts.

Understanding funding rounds and the role of PR in attracting investors

The benefits of PR for startups in securing VC

1. Building trust and credibility

Good PR will get you seen in the right places at the right time. Increased visibility goes hand in hand with credibility. Investors are now interested in you as a result of the coverage you are receiving. Now that you’ve demonstrated your presence in the market, investors are more open to your business and its ability to provide healthy returns. This can narrow it down for VC firms, who often face a barrage of investment propositions.

2. Demonstrating momentum

Press coverage can show the momentum behind a business or idea. Investors like to see a buzz around a product or company. It shows viability. PR can focus on broadcasting your achievements, new product launches, and company milestones. Getting featured in industry-specific publications means the industry backs you and is aware of you. Similarly, any strategic partnerships formed can signal you are trusted and valued in the industry.

3. Thought leadership

PR can establish founders and key executives as thought leaders in the industry. By offering valuable contributions to publications, industry events, and discussion panels, you can highlight your knowledge and passion, which is very attractive to VC firms.

4. PR can tell a story

PR activities can draw attention to a startup's journey, from how it began to why it exists. This backdrop can shine a light on the growth of an idea and sell what sets you apart, whether you have an innovative product, a different business model, or a super low carbon footprint.

Make your story and any USPs clear to help secure venture capital funding. Use figures to tell stories and demonstrate accomplishments. For instance, if your product reduces your clients recruitment costs by 40%, let this do the talking for you.

How should a startup approach PR to secure funding?

1. Prepare for investor scrutiny

You should ensure that any public statements and press releases are accurate and current. Check that the financial data you provided is 100% correct, too. Financials matter to investors, and any misinformation will seriously dent your credibility. Be ready and prepared to explain figures and answer any difficult questions from journalists or investors, such as any about periods of decline or slow growth.

2. Find journalists

While building your story, be sure to factor in time to do your research. Your story needs to be appealing to the right journalists - you can use your story to start building rapport with journalists and work on growing your reputation.

Draw up a list. Read through their previous output to gauge where their interests lie and who their audience is. Doing this will lead to a greater chance of landing coverage. Journalist’s stories can lead directly to funding.

3. Begin early

It also takes time to come up with suitable angles for a story. If you’re utilizing the expertise of an agency, then the two of you will sit down to work out the best angle. Be sure to factor this time into your plan. You’ll also need to take the time to find an agency compatible with your needs. Many specialize in tech or startup PR.

The importance of reaching out early also applies to contacting VC firms. You should look to get on their radar. Why? Well, VC firms like to see progress. Getting in early means they’ll see firsthand as your business grows and milestones are achieved. This makes your outreach easier. One email on its own is unlikely to draw a VC in. They get lots! You’ll need to be persistent. Remember that there are different stages and you’ll likely require funding over time, not just once. The good news is that you can leverage funding success to attract more.

PR in house vs. working with a PR agency for startups

Doing in-house

Finances are always a factor in any business decision. Running PR on your own could be a viable option for startups whose budgets may not (yet) stretch far enough to hiring an agency. Building an in-house team is the most attractive option for many. Communication is instant, and your people are likely to align with the brand values and company ethos than an external party. Keeping in-house also promotes a family-like environment as you experience the company's ups and downs together.

Using a PR agency

PR for Startups and PR for Scaleups can be very specific. Having the experience of a Venture Capital PR agency behind you can be a huge asset for attracting funding. You only get one chance to get it right. If you're a startup going places and want to benefit from this traction, hiring a PR agency can help get your story out in front of investors. An agency can tell your story in a way that positively shows your company's narrative. With the number of startup investors increasing, you'll need an integrated approach to communications. Beyond just coverage of one successful funding round, you need to establish credibility over time as your business progresses. A PR agency can help here.

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The role of public relations for Venture Capital firms

The number of venture capital firms has shot up in the last 15 recent years. As seed funding took off more people could get a slice of the pie, creating new opportunities and leading to VCs specializing. Many startup owners also sold their shares to VC firms or became investors, and the industry soon expanded beyond just a handful of big players. With increased competition, VC firms have turned to PR.

Why Venture Capital firms need PR

1. Build trust

VCs need to raise funds from investors who turn to them to make informed decisions on their behalf. They also need to attract startups who want to get their business off the ground. They require the trust of their existing clients and potential clients. With so much at stake and with success down to the advice and expertise of VCs, building trust becomes paramount.

Who do you rely on to make wise investments for you? Who's experience can benefit your startup the most? This is where PR helps. PR is all about reputation management.

2. To stand out

The increase in funding companies means startups have more options for fundraising. Startups often hunt for a 'match' - a firm with expertise and experience in their field. VC firms need to work hard to win business - especially if they are not a natural ‘match’ for a startup or have stronger experience elsewhere. Startups and high-net-worth investors will undoubtedly research what others say about the VC and the success of its portfolio. What big names has it helped? This will be a question on their lips.

What VC firms put out in the public domain, therefore, is very important. It needs to echo their values and demonstrate their expertise. With an increased interest in CSR, startups and investors will also look at the firm’s values to see if they match. PR can help VC firms stand out here, also.

3. Visibility

PR done well can increase a VC firm's visibility among key audiences. Firms can attract further investment by highlighting successful investments and the value added beyond just financing. VCs don’t just provide funds and say, ‘off you go.’ They give important advice and offer extensive networking opportunities.

Media placements in investment and trade publications can also enhance visibility in the startup ecosystem and make a VC firm top of mind for many entrepreneurs seeking investment.

4. Reputation management

PR helps VC firms establish and maintain a positive reputation within the industry and among potential investment targets. By effectively communicating their investment philosophies, successes, and expertise through media channels, VC firms can enhance their credibility and attract high-quality entrepreneurs seeking funding.

Why Venture Capital firms need PR

Benefits of PR for Venture Capital Firm

1. Establish Thought Leadership

VC firms can use PR to establish themselves as thought leaders. A large part of venture capitalism is trust. Investors and startups seek VC firms to guide them on their growth journey.

By publishing articles offering insights, joining industry panels, and speaking at conferences, VCs can enhance their reputations and attract those looking for financial backing and genuine knowledge. Thought leadership placements can verify this.

Learn more about thought leadership

2. Tailored services

Different VCs may require different services and levels of support depending on their current goals and where they are currently. Some firms may require a full holistic strategy. Others may need help in their external communications or help expanding into a new market or sector. But with little or no experience in the market, they may need a PR agency in that territory with local knowledge and direct experience.

3. Crisis management

The reputation of VC firms can also take a hit. For instance, if a highly publicized investment goes wrong or a firm has lower overall returns than competitors, it can spell bad news for a VC company. Similarly, accusations of unethical behavior or negative investing can adversely impact a VC firm and those associated with it. This could put multiple reputations at risk.

It's important for firms to understand that this cannot always be mended with a few good deeds or charitable donations. Instead, reputation will need to be built up, possibly from scratch, depending on the severity. PR firms can provide a strategy here.

The point to be made here is that PR can help with various goals and stages. No one VC firm is the same after all.

Learn more about crisis management

How VC should approach PR to attract ambitious startups

1. Show your record

You need to show why investors and businesses should trust you. It makes sense that a startup is much more likely to reach out to venture capitalists if they have a proven record of helping and supporting businesses in their field or a related one. One way to do this is to bring attention to your success stories. Publicize your biggest wins (get permission first) on your website and on your social media.

Go beyond just numbers and tell a story, giving details of hurdles overcome, the before and after situations, and how your advice and knowledge added wisdom to the endeavor. Get testimonials and build up your reviews.

2. Think about content

Don't just produce content ad-hoc or at irregular intervals. You want people to look forward to what you have to say, so regularly create and distribute high-quality, relevant content to your startup and investor audiences. What do they want to see? Well, this may include recent successes, tips for standing out, or current investment trends. Share on LinkedIn and other networks. Think newsletters, too. This keeps you at the forefront of people's minds.

3. Get seen in the right places

Good PR isn't just about gaining coverage, it's about gaining coverage in the right places. Media coverage in a neighborhood newspaper with low circulation isn't going to attract the big hitters.

You need to aim for coverage in relevant financial and industry publications. If you're investing in tech startups, this could be TechCrunch. If it's crypto, then it could be CoinDesk or Cryptonews.

Build relationships with journalists. Getting a feature in a top tier publication can significantly boost visibility and credibility. Just what you need to attract today's most ambitious startups.

4. Establish thought leadership

Thought leadership should be a strategy to consider. Positioning yourself as an expert in investment strategies, industry trends, and specific niches will solidify your reputation. You can use it to set you apart from other investment firms.

You should articulate what you bring that others lack. This could be expertise in a niche area, mentorship programs, or certain guarantees your firm offers. A distinct USP will help attract the brightest and most ambitious startups.

PR in house vs working with a PR agency for VC firms

Doing In-house

Employees will have intimate knowledge of the culture of the firm, investment philosophies, and individual knowledge of the company's portfolio. This can be a huge plus when considering messaging or integrating PR goals into wider company goals. An in-house team will naturally be inclined to know more about what is happening in the VC world. There are advantages to 'owning' your strategy and channels. Here, you exert full control.

But this could also be a little insular, as only internal ideas get airtime, and maybe by a very small group of people at that. Hiring an agency gives you more perspectives that you otherwise wouldn't hear. Agencies are also full of ideas. It's their job, after all. An in-house team may lack broader industry contacts and specific outreach experience.

Hiring a Venture Capital PR agency

External PR agencies can offer an unbiased perspective on a VC firm's communications strategy and messaging. They bring a fresh set of eyes to the table and can provide valuable insights and recommendations based on industry experience and market knowledge. This objectivity can be particularly beneficial when navigating sensitive issues or crises.

PR agencies typically have teams of professionals with expertise in public relations, media relations, content creation, etc. Often, agencies will specialize in working with clients in specific industries, including the tech sector, and B2B, where many VC firms operate. This specialized knowledge can be valuable in crafting tailored PR strategies and messaging that resonate with the media, key audiences, and those seeking VC services.

Many choose to go with PR agencies since the agency usually has established relationships with journalists, media outlets, influencers, and industry experts. These networks can be leveraged to secure media coverage, thought leadership opportunities, and speaking engagements for VC firms and their portfolio companies. Access to these networks can be difficult to replicate with an in-house team, especially for firms without prior PR experience.

While PR agencies have networks and connections, this does not mean that the agency’s existing contacts are guaranteed to be the right fit for you. More often than not, work will have to be done to find the right, tailored connections for you.

Engaging a PR agency allows VC firms to scale their PR efforts up or down based on the needs of the time. During periods of increased activity, such as fundraising announcements or major portfolio exits, firms may require additional PR support, which an agency can provide on a timely basis. Conversely, during quieter periods, they can reduce or pause PR activities to conserve resources.

While there are advantages to working with a PR agency, the decision ultimately depends on the specific needs, resources, and objectives of the VC firm. Some firms may opt to establish an in-house PR team if they have the capacity and expertise to effectively manage their communications internally. Others may prefer the flexibility, expertise, and scalability that PR agencies offer.

The VC media landscape is unique, and an experienced agency brings that specialized knowledge and expertise.

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We've looked at the role of PR, what it can do for VC investment, and how PR can help a firm attract the eyes and ears of investors. We also provided some useful considerations for deciding whether to go the route in-house or hire an agency.

Positive press will generate interest from funders, but you’ll need something newsworthy to share for them to get their interest. Successful funding at any stage can change the trajectory of your business, and gaining VC at an early stage could mean you’ll get their support throughout.

February 27, 2024
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