How can entrepreneurs use social media to pitch investors?
Social media has become an incredibly powerful tool for all types of uses. It has made and broken brands with consumers, changed politics, created movements, become an instant news source and has evolved into a chief community and shopping hub. It’s also been responsible for years of wasted time. So, how do you use it to aid in raising money for a startup?
Which Social Media Platforms are Best for Reaching Startup Investors?
There are two simple answers to this:
- The platforms that your ideal investors are on
- The platform you already use most
While there can be advantages of claiming your online real estate and storefront on every possible platform out there, it can also be a huge drag and distraction. It will be unless you automate it. At best you may be spread thin, and won’t be as effective on any social networks.
Clearly there is sense in getting on the social networks where investors already are. The ones they enjoy using, are on daily, and prefer to be contacted through. If they aren’t fans of Facebook, you are going to have a very frustrating time selling them on signing up, and checking out your new Facebook app.
I have the pleasure of interviewing some of the most successful entrepreneurs on the DealMakers Podcast. Many of them are entrepreneurs turned investors and the vast majority say they prefer to be contacted through Twitter or LinkedIn.
AngelList is another one often thrown around in this space. Think geographically and about the strategic expansion of your startup too. There are far larger social networks than these in Asia.
It is also important to be authentic and do what you are passionate about and good at. If you can’t stand Facebook, then don’t begrudgingly get on it and start from scratch because you feel you have to. It just won’t do the same job. If you are a heavy daily Instagram user, then go all in on that, and develop your LinkedIn and Twitter as you go.
Two Quick Tips for Using Social Media for Startups
- Think carefully before you decide who will manage the account
- Be sure your brand identity and messaging is seamless
There are some entrepreneurs who are probably doing themselves and their startups a really bad disservice by managing their own social. They are totally sabotaging their potential. You can still be authentic, and be your best self and brand by having someone else manage it, within a set of brand guidelines. Eventually you’ll have to delegate this anyway. Why not start now and focus on more important items. Find someone good, reliable and competent, and get out of your own way.
So, how do you and your team use it to get to investors and attract funding for your startup?
1) Build Social Proof
One of the core factors to obtaining any funding at all is demonstrating social proof. Social media is ideal for this. It’s the perfect platform to demonstrate traction, proof of concept, the feedback and engagement you are getting, and more.
2) Get on Their Radar
Even busy angel investors and VC associates try to stay active on social. After email it’s their favorite method of communicating today.
When you can’t get in their feed the first time, you can always take the lowest hanging fruit route. Who can introduce you to them on LinkedIn? Who are they following on Instagram that you can connect with, and then show up as a suggested connection?
Sponsored and promoted posts and ads can work. Though the noise is a lot louder than it used to be. There is more click and traffic fraud than ever. You don’t want to blow your startup budget on a gamble. Try the organic route first.
3) Be There All the Time
Once you are on their radar, and in their feed, be there all the time. Show up consistently and stay at the top of mind. Every post has your profile image which is a great way to drill your brand into their minds. Even if they don’t read anything you post for now.
Just don’t go too crazy with posting. This Wharton study which shows the correlation between social media and obtaining funding suggests that posting more than 580 times per year could be counterproductive. So, if you’re posting more than once a day you might be pushing your limit.
4) Share Your Story
Yes, you can cold pitch investors through direct messages. It can work. Though social is also a powerful inbound marketing tool for positioning your startup and drawing investors to you.
Share your back story and journey. Share your achievements and press coverage. Be the startup they want to chase to fund and most importantly master the art of story telling and capture the essence in your pitch deck. Have your 15 to 20 slides ready to go to wow investors. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash. Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400M (see it here).
5) Create Urgency
Social media has become a lighting fast way for news to spread. It’s been used by many types of investors to act on opportunities before they hit the mainstream media and news outlets. There’s no reason that tapping into this and posing your startup as the solution can’t be a powerful strategy for getting investors to take action.
6) Investor Updates
Social is also a viable platform for providing regular company and investor updates to the wider public and potential investors. Let them know where you are with new milestones, approaching your next round of fundraising, and where you are in closing the next round.
Ideally this can be used to build your email list and wider network as well for more targeted updates, fundraising efforts and future marketing as you go.