Tech startups: Make Inbound Marketing part of your Investor Pitch
Every start-up reaches a point where they need to secure funding in order to help propel them to the next level. All too often though expectations are far higher than any angel investor is willing to commit. This is why we tell our tech startups to make inbound marketing part of your investor pitch to show you’re thinking about the return on the investment from the outset.
The earliest stages of start-up funding carry a significant risk – little surprise then that investors do whatever they can to limit their exposure. And this typically shows itself as an offer worth far less than you asked for, be that in cash value or in shareholding.
Investors always ask for numbers
Watch an episode of Dragon’s Den and you’ll see a number of bright young entrepreneurs get savaged by Peter Jones and his gang. The ideas presented may be great, saleable even, but many fail on one key point – the inability to prove any genuine interest from buyers.
Occasionally hopefuls will quote some projected sales figures, or very basic market research (“Do you like our product?”), but few can present hard data. And without concrete evidence, venture capitalists get nervous.
Crowdfunding may help a little
The reality is that these entrepreneurs need to be able to demonstrate a genuine interest in their products – which may mean beginning the sales and marketing process before, or as soon as the first product prototype is built.
In some respects, the crowdfunding model already does this, by encouraging would-be customers to get involved with the product creation process in its infancy. And it could be that some entrepreneurial ideas may be better served by going down this route. But they would still benefit from an inbound marketing strategy.
Inbound marketing to the rescue
Whether your business chooses to finance via angel investors or crowdfunding, inbound marketing is an important tool for raising awareness and creating interest. As a lead generation-focused framework, inbound marketing helps start-ups demonstrate a number of vital facts that will help sway investors:
- A growing contacts list proves that there is demand from the target market.
- Lead scoring demonstrates levels of interest, differentiating those who are vaguely interested from those who are ready to purchase as soon as the product ships.
Even if your business is only seeking the first round of seed funding, these kinds of statistics are invaluable to you and your would-be investors. As the point at which financiers are most likely to lose their money on a bad bet, anything you can do to show risk minimisations will only strengthen your case and increase the chances of walking away with come capital.
As important as your other web assets
As your business scrambles to secure a suitable domain name, social profiles and vanity URLs, you should also be gearing up the basics of your inbound marketing process. You should already know what “pain” your product addresses, so immediately you can begin creating inbound content that addresses those issues. Your funding pitch will also require the same information, so doing the preparatory work will pay off twice – one for lead generation, and again as you present to dragon investors.
By building inbound marketing into your start-up programme from the outset, you can clearly demonstrate value and demand. And by doing so, your business will be able to secure the required funding, simply because your competitors cannot answer the Dragons’ toughest questions.
Intrigued? Drop Paul and the Bias Digital inbound marketing team a quick message and we’ll get on the case.
Are you pitching? Check out these fantastic links
image courtesy of legalzoom.com