Attracting investment is a milestone for any startup – it’s a vote of confidence from a respected outside expert in your space and a signal that your company is positioned for the future, which is important to prospective partners and customers, as well as future investors.
Beyond that, new funding can also increase your visibility, attracting the attention of top talent and potential acquirers. One of the most effective ways to magnify your visibility is through a funding announcement. After helping hundreds of companies understand this process, here are my suggestions for how to get it right.
Drafting the Announcement:
Not every funding announcement is the same, but standard components include:
The news + the facts:
Who raised? How much? Who are the investors? Which investor led the round? What stage is the company?
Mention any investors that invested in earlier rounds. It signals an ongoing relationship and continued confidence.
Call out any investors who are joining the board.
Background on the company:
What does the company do? Who is the founding team? How will the money be used (new hires, development, etc.)?
Validation from the investors:
A quote from the investor(s) is an expert endorsement. Typically, the investor speaks to the reason for investment. This may include the executive team’s capabilities, why the company is exciting, or momentum in the market. In rounds with multiple investors, the lead investor is given priority and is often the only investor quoted.
Quote from the founder or CEO
New funding announcements benefit from a dedicated audience of interested journalists, so exploit the opportunity to tell your story. This is your chance to explain who you are, what you do and why, underscore momentum and call out recent achievements.
These days, there are so many reporters covering funding news that it’s no longer necessary to “bundle” your funding with other news. In fact, there is likely more benefit to a standalone funding announcement followed shortly by another announcement that indicates momentum.
If you find yourself stumped about how to frame your story, I always suggest reverse-engineering your ideal article. What is your perfect headline? What are the key takeaways readers should have? What kind of images and video might help you tell that story? You might also find inspiration in how others in your sector handle their announcements. You can do this easily by searching a company’s name alongside any of the commonly used wire services (Marketwired, PRNewswire, BusinessWire).
The goal of your announcement is to generate news coverage. Your media list should include reporters with whom you have a relationship, those who follow the companies in your sector and those who cover new financings as part of their beat. Many of the top business and tech outlets make funding coverage a priority and assign reporters to that task.
These include (but aren’t limited to): The Wall Street Journal, The New York Times, Forbes, Fortune, TechCrunch, Recode, VentureBeat, Business Insider, Buzzfeed, CNN, and CNBC. Additionally, newsletters like StrictlyVC, Fortune’s TermSheet, Mattermark and Pitchbook include roundup coverage of new financings.
It’s smart to reach out individually to reporters with your news and some context about why their readers will care. (The most successful pitching involves pulling out unique angles that will resonate with specific outlets so that journalists feel that the story is tailor-made for their audience.)
In determining an outreach strategy, you might consider reaching out broadly to offer several reporters the story or promising a single reporter an exclusive. An “exclusive” implies that they will write a more thoughtful and comprehensive article in exchange for being the only reporter provided with information and access.
Opting for an “exclusive” typically reduces broad coverage but is helpful if your business is complex and requires thoughtful explanation, or if you desire a deeper “signature story” which explains your business in detail and might aid in sales and hiring efforts.
These days few journalists rely on newswires to source their stories so you might also forgo sending a formal press release over the wire altogether. Releasing your news through your own channels, pitching reporters directly, and delivering the news to your network (via your website, social channels and direct emails) will do the trick.
Of course, in a world where startups come and go, a release over the wire can offer some legitimacy, as well as a historical record. Newswires typically have relationships with multiple outlets that will automatically post and archive their content. And, releases detailing financial transactions, including funding announcements tend to perform better than more general announcements on the newswire.
Pro-Tip: Lead Time
Regardless of which strategy you choose, the most successful funding PR efforts have one thing in common: They give reporters ample time to write the story. This can be easily achieved by sharing news in advance under “embargo.” To do this: reach out to reporters early with minimal information and an offer to share details and access to spokespeople once they’ve agreed to a specific embargo date and time (often synched to the timing of the newswire release). Not all reporters will agree to an embargo—some outlets have firm policies against agreeing to embargos—so you should work with them to understand how to work around these rules, or decide to share the information when it goes public, knowing that they will be less likely to devote much attention to the story after the news has gone out broadly.
Amplifying the news:
You can also amplify your news through social media and other “owned” channels. Sharing links via Twitter, Facebook and LinkedIn drive awareness of the news. It’s also smart to provide the information directly to internal employees, partners, and customers in a way that underscores key messages and arms them to share the story. Finally, writing your own blog post to be posted on your company site, LinkedIn, and Medium, allows you more opportunity to frame the news. In addition to providing more content to link to and share, media will sometimes mine blog posts for additional background, context or quotes.
Your investors’ PR team(s) may also help. Some investors will complement your news with a blog post of their own, promote your funding via social media, aid in outreach to the media and make themselves available to do press interviews. It’s not an imposition! Your investors want your company to succeed.
Filing a Form D and Timing Your Announcement: (AKA: How to Avoid the Biggest Mistake Startups Make when Announcing Funding)
In compliance with SEC regulations, most US-based startups are required to file a Form D electronically. The Form D contains the basic details of a financing and must be filed within 15 days (real days vs. business days) of closing the round. Unfortunately, once filed, these details become public which leads to a common PR headache for startups. Savvy journalists often monitor Form D filings looking for news scoops related to new financings. For companies filing a Form D, we recommend filing late in the day on day 15 and working to get your news out prior to filing. This way the start-up can control the narrative around their financing and work strategically with reporters who might cover the news. There are alternatives to filing a Form D. Start-ups that wish to operate in “stealth” mode or have otherwise made no public announcement of their financings must speak to their legal team about alternatives.
Do we need a PR agency to do this?
Obviously, having PR professionals at your service is helpful. But for many early stage companies, committing to an agency on retainer is too much too soon. (In the early stages, when company news is likely to be sporadic, the hefty price tag for ongoing agency support may not be cost-effective.)
If so, you might consider working with a consultant or agency on a “project basis.” It’s a reasonable request given that funding announcements are very straightforward. And, it’s helpful to publicists looking to build their business pipeline. You may also be able to tap your VC firm for help. My team sometimes pitches in when BVP’s early stage companies need help executing a funding announcement. When those companies need heavier lifting, we guide them to external experts who can step in and own the effort as if they were internal, ensuring that the exec team is in synch and prepped for the push, and making sure that results are reported.