Illustration: Aida Amer/Axios
Venture capital (VC) firms are increasingly looking to communications as a way to help their investments stand out from the competition.
Why is this important: Telling a good story — instead of buying one through ads — can be a profitable decision in a tough economy.
State of play: When the pencils are up, communications can be a smart tool for growing your business, says Allison Braley, senior marketing partner at Bain Capital Ventures.
- “You’re not going to see companies spending a lot of money on paid ads. Instead, you’ll see startups turn to their VCs and say, how can you help me grow without spending so much? That’s where having a really great communication function at the VC level can help,” Braley told Axios.
Rollback: With Margit Wennmachers at the helm, Andreessen Horowitz was arguably the first to use public relations to boost brand awareness before he had years of financial performance to show for it.
- Wennmachers has helped everyone realize that by showing strong marketing on behalf of the company, you can increase reputation and demonstrate how you can support a founder – and the founding audience is key.
- “Getting in front of high-potential founders is the north star of VC communications,” said Hadley Wilkins, Atomic’s vice president of communications. “My job is to build the Atomic brand to attract those people.”
- And for partnerships to succeed, the company must sell itself transparently and honestly.
Enlarge: Once there is an agreement, communications must step in to support the portfolio and help shape the narrative.
- “A great founder should act as the chief storyteller,” says active angel investor and entrepreneur Tina Sharkey. “They must be able to convey their vision to investors, the media and potential customers or partners.”
- “You are only born once and what we say helps the trajectory of the business. It’s all built on values and positioning,” says Wilkins, who is part of the business building team. from Atomic to help startups tell their story.
Yes, but: There are reasons to pause on marketing and communications.
- “Some start-ups who want to stay quiet while they develop their product to avoid tipping their competitors — and that’s a real strategic reason to avoid communications and marketing,” says Jenna Birch, vice- president of communications at a venture capital firm in San Francisco. “But we still have to prepare, if a story breaks out.”
The bottom line: “There is a huge opportunity to invest in strategic communications and storytelling early on, but not in an overhyped way,” says Wilkins.
- “Communication keeps us all on the same page. We have to be proactive and transparent in good times and bad.”
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