For any business, a good marketing strategy is often the difference between landing the next customer and closing shop. As the number of new business ventures continues to rise worldwide, marketing strategy is quickly becoming one of the most crucial factors in landing investors.
While new businesses fuel the economy’s growth, they are also gradually establishing a fiercely competitive funding environment, with each new entrant fighting to secure capital from a limited number of investors. One of the few tools available for businesses that want to find and attract investors is an outstanding marketing strategy.
Just like customers, potential investors can’t find you unless you put the word out. They also won’t invest in a business that hasn’t figured out its customer acquisition strategy – a key goal of any sound marketing strategy.
To help you find and appeal to the right investors, we’ll explore some general marketing best practices along with nuanced investor-focused marketing tips.
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How marketing can help you attract investors
Marketing is about identifying your target market, understanding the needs of people in that market, and communicating how your company can solve their problems. Typically, companies do this to find potential customers.
However, you can also use marketing skills with the end goal of convincing people or organizations to invest money in your company. Here are five steps to take if you want to market to investors.
1. Discover investor needs.
The first step is finding out what potential investors need or want in a business investment. Investors tend to focus on a few crucial factors:
- Is the company profitable?
- Is the company in an industry on the upswing?
- Will the company’s executive team be able to take it to the next level?
- Is the company offering a unique product or service difficult for competitors to replicate?
Depending on your specific business, product, or industry, investors may look for additional factors, including strategic alliances, technical know-how, a critical mass customer base, or intellectual property.
Figure out what factors are most crucial to your potential investors.
2. Ensure your business is strong in areas critical to investors.
When you’re ready to sell your house, you might enhance the landscaping and declutter the interior to make it more appealing to potential buyers. You’ll go through a similar exercise with your business when trying to secure private investors. Once you know what investors are looking for, it’s time to ensure your business is vital in those areas.
Follow these steps to shore up your business:
- Analyze your business performance. Make changes to strengthen your profit margin, build your customer base, and increase sales.
- Hire the experts you need. If you don’t already have the right expertise on your team, bring on people who can fill the gaps. For example, hire a digital marketing expert, social media manager or bookkeeper if necessary.
- Protect your intellectual property. Take steps to protect your intellectual property with patents and trademarks, if applicable.
- Enhance your website. Ensure your website design is attractive and that the site functions well and is filled with quality content.
- Check your other marketing materials. Ensure your general and specialized marketing materials and strategies are effective. For example, ensure your email marketing campaigns are correctly targeted.
If you need to grow your customer base, consider sending out free or discounted products to generate buzz, and highlight positive reviews, customer feedback, referrals, and testimonials.
3. Create investor-focused marketing materials.
Next, create a business plan detailing your organization’s specifics, why your company is a good investment, and what kind of investment you’re seeking. Create a PowerPoint presentation with some of this information for investors, and write and practice your investor elevator pitch.
Consider creating a one-page company overview that includes the main selling points for investors. All your marketing materials should be well-written and designed to look professional and attractive, portraying your business in the best possible light.
4. Find and communicate with likely investors.
The next step is finding your ideal investors. This process is akin to advertising and participating in trade shows to find customers. There are two primary ways to find and interact with investors: online investing platforms and in-person events.
- Online investing platforms: These platforms exist to match investors with businesses. Some top platforms include SeedInvest, StartEngine, CircleUp, and Wefunder. Whether or not you end up getting investment money on these platforms, you can use them to attract attention and build awareness of your company among the investor community.
- In-person events: Various events allow business owners to pitch investors on their opportunities, including Money20/20 USA for fintech companies, TechCrunch for technology companies, and ACA for all kinds of companies.
4 marketing practices for attracting the right investors
While the marketing best practices described above will help you identify and appeal to investors in general, you’ll need more than that to seal the deal. These four marketing hacks will help you focus on your ideal investment partner.
1. Identify investors within your niche.
One of the biggest mistakes budding entrepreneurs make is begging for funds from any investor that cares to listen. When desperate for capital, some business owners will market their businesses or ideas without identifying the type of investor they want.
Here are some tips for identifying investors in your niche:
- Understand your ideal investor. Before marketing your business to potential investors, determine your ideal investor. What niches do they invest in? Where do they invest? What’s their investment potential? If you’re planning to pitch to venture capital and private equity firms, learn about their individual decision-makers. For example, some investors are interested in companies’ social impact, while others only care about the financials. Find out if potential investors have any history or interest in your industry, product, or niche. After characterizing your ideal investor, you can start infusing your marketing plan with pertinent information.
- Make sure you and your investors are on the same page. As many growing companies learn down the line, the right business matched with the wrong investor or investment platform is almost always destined to fail. This is particularly true if ideological differences between the founder and the business’s investors play out.
Angel investors are high-net-worth investors who generally focus on local startups. They have skin in the game and often develop an emotional attachment to the companies they fund.
2. Redesign your PR strategy for maximum investor exposure.
Once you’ve determined what your ideal investor looks like, ensure your PR strategy is carefully coordinated and sends the right message about your business to potential investors.
To accomplish this, back your PR campaigns with a solid digital marketing strategy. According to an in-depth Aquare analysis, a well-managed content-amplification strategy designed to generate thousands of retweets, shares and referral traffic is the only way to ensure PR campaigns achieve maximum reach and engagement.
Here are some tips for creating a PR strategy optimized for investor attention:
- Get the most for your PR dollar. Value doesn’t necessarily equate to how much you spend on a campaign – it’s all about measuring marketing ROI. An effective paid ad strategy on social media is vital, but approaching and using influencers in the right way is just as essential for organic reach. By covering all your bases – or, in this case, digital channels – your PR campaign has a higher chance of landing in front of the right investors interested in learning more.
- Show you’re at the leading edge. Your PR strategy must show potential investors within your industry that you’re ahead of the curve. Your press releases, newsletters, social media content and speaking engagements should ideally focus on current and future trending topics within your industry. This focus establishes your business as a thought leader, setting you apart from the hundreds of startups and SMBs also seeking investors.
- Establish your expertise. Since investors want to invest in companies with expertise, innovation and good management, use public relations to showcase these skills. For example, do an interview on a podcast or television show, give a presentation at an industry trade show, or write an article for an industry publication or blog. Focus on what problems your company solves and the unique ways it solves them. Make bold or provocative statements to create buzz. For maximum impact, capture all mentions, interviews and content and feature them on your website and social media. You can even include copies of articles in the information you give to potential investors to provide additional credibility.
- Time it right. Remember to time your PR campaigns appropriately. Schedule press releases, emails and other PR strategy elements appropriately in advance of seeking out funding to lay the groundwork for productive conversations.
3. Solidify your digital presence.
Your digital presence should also be front and center so potential investors can easily find you and interact with your brand. The last thing you’d want is to make a successful pitch to a potential investor, only for them to spend a whole afternoon wandering through the internet looking for the slightest glimpse of your brand.
Optimize your business website.
Your company website is a significant element of your business’s online identity. Your website is usually the first place potential investors go for additional information. Despite its importance, a surprisingly small number of SMBs pay attention to their websites – if they have one at all.
Ensure your website – especially your landing page – is straightforward and easy on the eyes. It should also have the following qualities:
- Mobile friendly
- Loads quickly
- Clarifies what business you’re in and what your product or service is
- Free of grammar and spelling mistakes, missing images, and links that go nowhere
- Outlines why your product or service is unique
- Has an About page that explains your company’s mission
- Identifies the problem your product or service solves and why it’s the best possible solution
- Identifies the executive team and key employees with bios showcasing each person’s experience and expertise
Consider adding a password-protected page for investors or creating a separate website for investors with a link to your primary website.
Optimize your social media presence.
Your digital presence should also include social media marketing – another essential marketing element that will bring your brand closer to potential investors.
However, instead of going with every social media channel available, double down exclusively on platforms truly relevant to your business and investors. For instance, if you’re an online fashion retailer, you’ll get more brand visibility via platforms like Pinterest and Instagram than Twitter because of your products’ visual nature.
While most social media outreach builds brand awareness and promotes your products or services to potential customers, you can also reach out to potential investors. LinkedIn is the best social platform for investor outreach because you can directly message your business contacts, participate in industry or investor groups, and ask your contacts for introductions.
Use one of the best social media management and marketing tools to develop specific strategies, track mentions, and update and maintain your social media accounts.
Use your blog to tell your story.
Blogs can be an effective method of attracting investors. Use high-quality blog posts or guest posts on industry influencer blogs to tell your story and highlight your unique features and selling points. Search out the blogs of investors on your radar, and comment on their posts to start forging a relationship with them.
4. Engage in smart networking.
A vital part of finding investors is rubbing elbows with other people. For instance, hosting or attending a business networking event can lead to a one-on-one conversation with a potential investor who may even turn out to be a business partner.
Here are some tips for engaging in smart networking:
- Research attendees. If you’re attending an industry trade show or investment event, try to get a list of attendees before the event. Research the individuals and firms that will be there, suss out potential investors, and connect with them on LinkedIn. Remember, the right investor may not look the way you expect; they could be a current competitor or the producer of a complementary product.
- Talk and listen. When networking, have your elevator pitch ready if the opportunity presents itself. But it’s just as important to listen. By actively listening, you’ll build rapport and create relationships with people who can help you while gleaning crucial information about who is investing and what is important to them.
How marketing efforts can help you find the right investor
By combining digital and traditional marketing elements, you stand a much greater chance of catching the interest of that one person who could be the difference between success and disappointment.
After you’ve found the right investor, your next step is to determine if the investor is offering a good deal. Evaluate the deal, get advice from trusted experts or advisors, and ensure the partnership works for you and your company.
Howard Goldstein contributed to the writing and research in this article.