Funding in the Time of COVID
It’s no secret that the global economy is in deep trouble because of the pandemic. There are record levels of layoffs and furloughs as entire sections of the economy are shut down or slow to a crawl. No one really knows what the future holds. And in the middle of this chaos, we’ve had the privilege of announcing funding rounds for two of our clients. But the climate for promoting this kind of news is anything but normal. Let’s look at what makes it so different.
Why it Matters
Announcing funding is a great moment for any company. It’s not only a validation of the team’s hard work and (one hopes) market success, but it’s also an opportunity to get greater visibility among target audiences. Simply put, getting a funding announcement covered by the media is a very good way to attract investors, customers, and partners. It’s also a way to recruit top talent who wants to work for a company on its way up.
Press Releases
In good times (before COVID-19), this usually meant putting out a press release. Level one PR involved just putting it on the wire (a paid service that distributes press releases to media outlets) and waiting to see what would get picked up. This is a fairly unsophisticated approach that usually results in dozens of web crawlers running the funding as a news item, but very little in the way of actual editorial coverage. These are automatic and don’t “count” as real media results. It’s table stakes, but it’s not going to drive much value.
Tiered Press Targets
To get visibility, you need to actually pitch the release to the press. The goal is to get coverage in the highest-level outlets. It’s easy to get on Yahoo Finance because they literally run everything that’s on the wire. It’s a lot harder to get into Fortune or the Wall Street Journal. Start with a list of the absolute top-tier sites and publications that matter to you. For most companies, it’s the major wire services such as Dow Jones, Reuters, and Bloomberg. Then mix in major local media (the San Francisco Chronicle in the Bay Area, the Report on Business in Toronto). Television and radio aren’t usually worth going after for funding, unless it’s a show about investments or innovation. Then identify top industry trades that matter to you. If you’re a Canadian tech company, BetaKit has to be at the top of your list. If you’re in fintech, American Banker will most likely top your list.
All About the Benjamins
The problem with pitching funding announcements is that there are a lot of them, and it’s hard to cut through the clutter. That means that the ones with larger dollar values tend to get precedence. People agonize over the funding press releases, but ultimately coverage is mostly about the size of the deal. A $100 million series C round is going to get covered; a $5 million seed round most likely won’t. Even if your $5 million funding is the most important thing in your world, it’s probably not going to get a lot of interest. While there are no official numbers, Dow Jones wants (at minimum) members of the Two-Comma Club.
Know the Angle
So, how do you get attention for small rounds of funding? The answer is that you need an angle beyond the dollar signs. If your entire play is “we got money,” you get caught in a numbers game you’ll probably lose. So, figure out what else you have working for you. This could be:
A well-known investor or executive (has to be truly A-list)
A contest (perhaps the founder was a Dragon’s Den participant)
A really big deployment (Wal-Mart buying a million of your product)
A controversial take (for example, a company planning to turn Alberta into the solar capital of North America)
The COVID Conundrum
All of the rules listed above made perfect sense on March 10. Then the pandemic upended all of them. Given the state of the economy, people are desperate for good news. Investment rounds are no longer a transaction: they are a symbol of hope in a scary and uncertain world. A company that is able to bring in millions of dollars worth of capital in this business climate is already an exceptional story—and smaller deals are getting covered in ways that they wouldn’t have even two months ago. The trick is to capture that zeitgeist in the right way.
This is the basic problem that marketers face right now. How can we tell positive stories while being respectful of the victims of COVID? Even if a company is doing well, it seems wrong to crow about it when millions of our friends and relatives are losing their jobs and hundreds of thousands are losing their lives. And there’s also the risk of “coronawashing”—overstating claims of being part of the solution for the pandemic that comes across as exploitative and disingenuous.
The answer is to be honest in your communications. Don’t try to jump on the coronavirus bandwagon because it’s the trending topic of 2020. Make claims that are accurate. Come across as compassionate by actually being compassionate. And recognize that you are in an amazing position right now. When the pandemic ends, you will be at the forefront of the recovery when it comes.
Visit our previous blog about how to COVID-proof your brand.