The Thought Leader’s Edge: Securing Venture Capital in a Tight Market
It’s a tough time for startups trying to raise money: as of mid-2023, VCs have tightened their purse strings for five consecutive quarters.
In this environment, startups looking for venture capital have to pull every string available to improve their odds of breaking through the noise. Thought leadership is one of those strings.
Don’t get me wrong: it’s a small one. It’s less important than, say, product-market fit.
But thought leadership can make a difference.
In this piece, I’ll lay out how startups can use thought leadership to get on the radar of VCs they care about and to make a positive impression once they do – but not in that order.
Part 1: Write Thought Leadership Content that Will Impress VCs
I recently asked a green tech VC how thought leadership comes into play when his firm is evaluating startups for funding.
He said, when he and his partners do come across thought leadership content (often during the due diligence process), it tends to make a better impression if the article…
1. Is professionally written
Yes, he really led with “professionally written,” and no, I didn’t pay him to. More specifically, he said a piece makes a better impression if it’s clear that, for example, it’s “not intended to stir up conflict on LinkedIn.”
This is not to say you piece shouldn’t stir up conflict on LinkedIn – in fact, if it does, there’s a better chance that the investors you’re trying to connect with will hear about it.
But making waves shouldn’t be the sole purpose of your piece. In fact, if you’re going to catch the attention of an editor, you’ll have to take a stand.
You’ll know you’ve hit the sweet spot when you can support all your claims in a thoughtful, thorough argument.
2. Is data-driven
Opinions are important to thought leadership. Building a credible argument supported with data is harder.
And building a credible, data-backed argument that also adds something new to an existing conversation is difficult enough that, when done well, it sends an important message to VCs: the author of this piece is serious. They know what they’re talking about.
3. Highlights the value proposition for the product that the startup is developing
This one may be obvious, but it’s worth mentioning. You may be able to offer thought leadership about many areas. But the one you should focus on when you’re preparing to raise money should relate to the value prop of your nascent product.
For example, if you’re developing a more efficient internal combustion engine that can run on alternative fuels (hydrogen, ammonia), you might write about why hybrid energy is critical for a greener future.
4. Takes less than five minutes to read
Assuming an average reading speed of 130 words per minute, you’ve got about 650 words to create a five-minute reading experience. For context, this piece up to this point is approaching the 600 mark.
But don’t get me wrong: you can do a lot in 650 words. Especially if you’re a professional writer. In fact, there's a whole world of so-called “flash” fiction that tells stories in no more than 1,000 words (and often much less).
So how do you write a thoughtful, thorough, data-driven piece that highlights your startup’s value proposition and is also 650 words or shorter? See #1.
Once you’ve written a piece that will catch a VC’s attention, it’s time to do everything in your power to make sure VCs see it.
Part 2: Leverage the Power of Networks to Get in Front of VCs
The VC I spoke to confirmed that thought leadership can “... be a good way to get on the radar of the broader ecosystem, which then trickles through to investors via convos, referrals, etc.”
The takeaways for anyone looking to use thought leadership as part of their funding journey: 1) publish in the right venue for your message and 2) promote after publication. Let’s look at each.
1. Publish in the right venue for your message
The “right” venue means the place where members of your industry’s “broader ecosystem” are likely to come across it.
If you’re a green energy startup, for example, that might mean publishing in a niche aviation publication that industry insiders and enthusiasts read for wonky takes.
Not sure which publications to target? Research the press pages of portfolio companies of the VCs you’re planning to pitch. See where those companies are getting placements and pitch those pubs.
2. Promote after publication
Getting your piece in the right venue offers two advantages. First, people in your target audience will see it. Second, it boosts your authority and credibility (and that of your startup) because it means you passed muster with a knowledgeable editor at an industry publication.
But you can’t rely on the publication alone to get seen by your target VCs. You need to promote your piece after it runs. The goal for promotion: get your name, your startup’s name, and your ideas on the radar of as many people in the ecosystem as possible.
You might do that by…
- Sending the article in personal emails to VCs you hope to raise from (NOT a mass email with a bunch of folks on bcc).
- Sharing the article on social media with a post highlighting a key takeaway or two (let the conversations begin!).
- Asking your more influential supporters to share the post on social.
- Including a link to the article in your email signature.
- Adding the piece to the News page on your website.
- Spotlighting the article in your startup’s next newsletter.
And there's no rule that you can only share something once. Social feeds move fast. If your piece engages with a relevant industry conversation – and it should – you can find opportunities to bring it up multiple times to increase its audience and potential impact on your growth.
When Preparation Meets Opportunity
You’ve probably heard a version of the sentiment that luck is what happens when preparation meets opportunity. Crafting, publishing, and promoting thought leadership is part of the preparation to raise funds that any startup founder should do.
When opportunity knocks – when one VC complains that they almost ran out of charge on their recent interstate trip – your name may just be on the tip of their listener’s tongue. (“I just saw an article about this on LinkedIn!”)
From there, the opportunities keep knocking.