It's no secret that the US economy has seen better days. and as a result, the outlook of the VC industry. In fact, venture funding for startups suffered a 50% year-over-year drop in the 3rd quarter of 2022.
They say difficult times are great opportunities in disguise. So how do venture funds rise to the challenge and create opportunities for themselves during these difficult times?
What many VCs overlook is the power of digital marketing. The fact is, marketing tools like SEO and content marketing aren't just useful tools for portfolio companies. These tools can be incredibly useful for building relationships with startups, generating brand awareness, boosting your credibility as an investor, and establishing yourself as a thought leader in a specific vertical.
Let's look a little deeper at some of these benefits.
Build relationships with promising startups
To attract more promising startups, your firm can follow in the footsteps of OpenView Venture Partners, which has built an incredibly robust content platform. Kyle Lacy, Head of Marketing at OpenView, explains that their strategy is to identify the persona of their unique audience and create content from the top down and bottom up that that audience would want to read.
Venture capital firm NextView follows OpenView's strategy of focusing on a singular audience. In fact, NextView successfully attracts seed-level businesses by creating podcast content that’s solely focused on the stories of early-age startups. Their podcast entitled "Traction" focuses on the first 18 to 24 months of a company to show how they have grown over the span of two years. Each episode features interviews with guest startup founders who experienced success with their venture. By marketing to relatively new businesses through their startup, the firm was able to invest in more than 173 portfolio companies since their launch.
Boost your brand awareness
The fact is, promising startups are less likely to approach your VC firm if they have no idea who you are. Duh, right?
Recognizing the power of branding, VC fund Notion Capital invested heavily in establishing brand credibility with B2B SaaS companies. They were able to solidify themselves as the go-to investor for these startups by highlighting their branding on their website. To illustrate, their website features blog articles, podcasts, and even digital events regarding SaaS and B2B companies. Their focus on these topics strengthens their branding as a venture capitalist for B2B SaaS companies in Europe.
Likewise, Fred Wilson of Union Square Ventures established his branding as a venture capitalist by starting a blog in 2003 (before it was cool). Wilson committed to writing a blog article about the Internet and investments every day and eventually built a sizable audience. By staying committed to his blog, AVC: musings of a VC in NYC, Wilson successfully gained a branding as an expert amongst IOT companies. As such, it’s not surprising that Union Square Ventures was able to gain the attention of startups like Twitter, Etsy, and Tumblr.
Build credibility as an investor
However, it’s not enough to have a popular brand. Startups are more likely to work with you, especially if they know that you are knowledgeable and credible as a venture capitalist. To win the trust of new and potential startup founders, First Round Capital regularly pushes content out on a blog with more than 46k followers and a podcast that attracts more than 500 listeners per episode. Their educational content benefits aspiring entrepreneurs who want to learn about the industry. In return, their content brings in startup companies that entrust their future to the firm.
Though they’re already an established firm, Y Combinator continues to build their credibility among startups through video content. YC has solidified their credibility by launching content like “How to Start a Startup” video lecture. The video content series was initially launched at Stanford University before it gained fame on social media platforms like Facebook and LinkedIn. These educational videos strengthened Y Combinator's reputation as an investor.
Educational content regarding your offerings can nurture business relationships and increase people’s trust in your brand. Your digital content demonstrates your knowledge and depth, so you should publish educational articles about your offerings or short videos regarding your programs. These digital marketing strategies show your competency as a VC firm, which can build up the confidence of founders in your firm. It is often even said that marketing is the heart of business success.
Establish your authority in the industry
Many startups work with venture capital firms to benefit from their experience. Take Lightspeed Venture Partners’ Jeremy Liew for example, he explained that companies need to understand the different opportunities that online marketing channels can provide. Liew noted that Lending Tree, Expedia, and other insurance products grew in popularity in Google because they knew how to position themselves as authority figures on the search engine.
On the other hand, Andreessen Horowitz was able to position itself as an authority figure through the a16z Podcast. The firm aims to invest in portfolio companies in the mobile, cryptocurrency, gaming, and enterprise IT industries. Their podcast revolves around two main topics: high-level management advice and the future of technology. Most of the episodes are very technical, and this digital marketing strategy works out for them because it attracts entrepreneurs who want to start cloud computing or SaaS companies. By discussing technology topics in-depth, they are able to demonstrate their expertise and authority when it comes to IT-related businesses.
Given that plenty of competition exists, the US Chamber of Commerce recommends implementing digital marketing strategies to help your new business earn a seat within the industry. You can use tools like Google Analytics for in-depth monitoring regarding the effectiveness of your website and content. The insights from the data can even help you understand how you can rank at the top of various digital platforms. By optimizing your digital marketing efforts, your VC firm will be one of the top authority figures that will be displayed by Google to startup founders.
Digital marketing not only establishes your reputation among consumers, but it also helps in piquing the interest of startups. So if you want to optimize your portfolio and increase your profits, you should demonstrate your firm's potential with the help of digital marketing.It's no secret that the US economy has seen better days. And it's certainly had an effect on the venture capital industry. In fact, venture funding for startups suffered a 50% year-over-year drop in the 3rd quarter of 2022.
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