There is no question about it- I don’t need to explain to you how powerful social media has become over the last decade or so. This marketing powerhouse/suite of tools has changed not only the way we interact with each other, but how businesses interact with their customer base.
Social media has changed elections, created social movements and have become a viable news source while remaining a central communication and shopping hub in our lives. So with that in mind– how can an entrepreneur or founder use it as a tool to raise money for a startup?
First, Which Social Platforms Are The Best For Reaching Investors?
This is probably the most complicated simple answer that will exist in this article. There’s two ways to solve this problem, but it requires some work and research on your part:
- The channels that your target/ideal investors hangout on
- The platforms you’re likely already using
There are distinct advantages to claiming online profiles and virtual ‘storefront’ on every channel in existence, but this can be a massive drag on resources. Not every channel is made for your brand’s target consumer. If you choose to pursue every channel, at best you’ll spread yourself and your team too thin and reduce efficacy across the board, or worse– you might not be effective on any social media.
It makes sense- if you’re pitching, it clearly makes sense to join the social media networks where your investors are already. You won’t talk VCs or investors into jumping on Facebook, for example, if they aren’t already massive fans of the channel and aren’t using it daily. That being said, there’s often a lot of action occurring on channels like Twitter or LinkedIn- two big favorites with the entrepreneur/investor crowd.
Another one to consider is AngelList, but this is where it gets tricky. Take some time to consider the trajectory of your startup and where that will take you geographically. For example, there’s massive opportunity on other networks that aren’t AngelList but are much, much bigger in Asia.
Most importantly, you must be authentic and focus on what you’re good at. People may not be able to articulate what it is, but they absolutely sense when you’re not passionate about what you’re doing. On the other hand, if you’re an Instagram power user, put all your cards in on that and then try to develop your LinkedIn down the road.
Effective Management of Social Media For Startups
- Think twice before you decide who the account stakeholder is
- Iron out your brand identity
Some entrepreneurs are killing it (not in a good way) by running their social media on their own, sabotaging any potential opportunity. Authenticity is achieved by having set brand guidelines, not by controlling everything yourself. Remember- the best thing you can do is get into the habit early on delegating tasks that support you while you run your business.
So how can your team use social to attract funding?
Online isn’t really that different than offline pitching in a number of ways- a major factor that you have to establish before you obtain funding is proving social proof behind your concept. You can nail this goal by effectively using social media. It’s the perfect channel to show traction, validate your proof of concept and measure feedback and more. You have a direct line to your core customer base- use it!
Start Making Waves- Get Their Attention
Investors and VC’s are busy people. But even busy people stay active on social- after email (of course), this is their favorite way to communicate.
Too many entrepreneurs fail because they try once and then move on when their prospective investor doesn’t see them on their feed that one time. Who are their audience on Instagram that you can establish a connection with- showing up as a suggested connection?
Using sponsored or promoted posts or ads are another idea. These can work, though noise on these networks is a lot more common than they used to be. Don’t blow your marketing budget on a gamble- the organic path is cheaper and could very well be a better option at this stage.
Share Your Brand’s Story
Cold pitching investors through direct messages is always an option- it has and it can absolutely work. However, social media is successful because it’s a powerful marketing tool that you can use to position your startup and draw investors to your brand.
Share your backstory. Be open and candid about your journey. Share achievements and any press resulting from these. Be the startup they are dying to fund and will chase to throw money- master the art of the story and capture the essence of your organization in your pitch deck. Check out this incredible sample of a pitch deck by Innovative Solar Systems.
Create A Sense Of Urgency
Social media is a lightning fast way for news and information to spread. Investors regularly use these channels as a means to jump on opportunities before they make it to the news outlets. Use this to your advantage and tap into this sense of urgency while posing your business as the solution- a powerful, effective strategy to entice investors to move forward.
Updates On Your Business
Social media is probably the most viable way to provide regular company and fundraising updates to the public and other potential investors. Keep your tribe updated on new milestones and when you’re at in closing the next round.
This should be used to cultivate your email list as well as build your wider network so that you can provide highly targeted news and updates, status of fundraising efforts, and later marketing initiatives as you move forward.
Kristen Bowie is a marketing leader, forging the path with data-driven decisions. When she’s not writing for thought leadership and creating sponsorship proposals at Qwilr, she’s hanging out with her two urban dwarf goats, painting, or is out watching a local band.