The modern venture capital landscape is more competitive than ever, with more funds competing for the best LPs and the best deals, and more diversification, with a proliferation of specialist investors. VCs need a way to stand out. One of the most reliable ways to achieve this is through a strong brand and a well-established media profile.
Reputation is ultimately built on success, but PR and comms can provide a valuable edge at all stages of a VC cycle, from improving deal flow through to maximising the value of exits.
Unlocking deal flow with communications
The hyper-competitiveness of the VC ecosystem means that pitching has become a two-way process. Certainly in the case of the best prospects, the pitch is as much about founders selecting which VCs they want to work with as it is VCs selecting which entrepreneurs to invest in.
As a result, it has become an imperative for VCs to have a compelling story of their own. Like founders, VCs should be able to articulate clearly what makes them unique, what their investment thesis is, why it makes sense, and why they are the best partner for you. In other words, VCs need a pitch too.
A strong comms strategy turns that pitch into visibility and influence. It amplifies the VC’s voice in the right sectors, speaking directly to specific audiences through industry media and showcasing partners’ deep expertise. This builds credibility with founders to help ensure VCs aren’t just finding the best deals, they’re attracting them too.
Maximising exit value
At the other end of the VC-founder relationship, exits are another instance where an effective communications strategy can boost investment performance. Once a VC has improved its deal flow, invested in the founders and companies with the best potential, and supported them through their rapid growth phases, the exit marks the end point of their collaboration.
Yet in a world where VCs rely on outsized exits to contribute a large proportion of their returns, not enough take the opportunity to maximise the value of their exits with a targeted communications campaign. A well-timed PR and communications push can ensure that any messaging kinks are ironed out before a series of deliberate media placements that can make a company feel like they are ‘everywhere’ at that moment. This kind of strategic comms can have a significant impact on the exit value of a startup.
For example, Ballou was retained by Paris-based Musiwave to help sell the company, taking advantage of a short window when its business was highly commoditised. Having mapped potential acquirers globally, we targeted private equity media and analysts in the UK and US, resulting in influential coverage and invitations to exclusive banking conferences. Musiwave was sold for $121 million, a 163% premium on the valuation it would attract just two years later.
From start to finish, then start again.
Effective communications strategies not only help VCs access the best deals and ensure that they are able to maximise their returns, they also enable a GP to build a long-term reputation. As we mentioned at the beginning, investment performance will always be the major determining factor to VC longevity, but reputation and positioning has a huge impact too.
LPs in particular consider market reputation and investment theses when deciding which funds to back. Strong communications therefore have an important effect not just on the performance of a VC’s portfolio, but also on the strength of its future funds and future portfolios. VCs can strategically add communications support at different points in their fund cycle to drive optimised performance and ensure a strong and sustainable position for the firm into the future. Building and communicating points of difference and investment strategies will help investors access the best deals on the market, while a well-timed media push can maximise the value of an exit. Both of these will build a VC’s reputation, attracting influential LPs and allowing the cycle to begin again.