What is a Funding Round and How to Announce It? A Guide for Any Startup or PR Agency
One of the more exciting news items for any tech company or startup is a new round of funding. Not only does it provide fresh capital to fund a company’s growth, but it is also a fantastic opportunity to generate media exposure and broaden a company’s public audience. Many on the outside of public relations may think a funding announcement is as easy as writing up a press release and publishing it through a newswire, but there’s more occurring behind the curtains of this process. Much like the “Wizard of Oz,” TR Account Director Noe Sacocco can take you behind those curtains. Here, Noe breaks down the ins and outs of the crucial key points startups and PR agencies should include in every new funding announcement.
What is the most important information to include in a press release announcing a funding announcement?
Specifying the funding round, which can be seed, A, B or C funding.. Much like a tree, seed funding is the youngest and smallest dollar amounts raised, while A, B and C rounds are typically sequential funding rounds with higher dollar amounts for more mature companies. In addition to this basic information, my years of experience have taught me that when you include quotes from investors and customers, it tends to carry the weight of the announcement to a broader audience and generate more interest from journalists.
Is a certain round (seed, A, B or C) more or less important than the other rounds?
Others in public relations or tech may disagree, but I believe any round is impactful for a business. Simply put, funding means you’re still generating interest, and therefore, reinforcing market validation. If there’s still belief in your company and model, then any type of funding will be impactful to your mission and story.
What is most important: the dollar amount raised or the investors who participated in the round?
Both. An investor with a solid reputation and network can generate additional interest in future funding rounds, while the amount raised implies a valuation for the market and can be a sticker shock moment. That said, depending on the growth (or lack thereof) from one round to another, this is a positive or negative moment.
In your view, what are the top-tier tier outlets to pitch these types of announcements?
In my humble opinion, the three primary targets I pitch are Bloomberg, Reuters and The Wall Street Journal (only for a significant round), but TechCrunch, VentureBeat, and Crunchbase News are contenders too. Not to say there aren’t other fantastic media outlets worth pitching exclusives to; these outlets have the widest audience for general tech news.
When should you offer a funding announcement — good news or bad news — as an exclusive to a reporter?
Given the amount of pitches journalists receive on a daily basis, my rule of thumb is generally two to three weeks. Reporters get bogged down by tons of exclusive and embargoed requests.
How much lead time should you provide a reporter for news items like this?
Similar to exclusives, I think any embargoed news we’re pitching should give reporters two to three weeks. This helps provide carve out time for pre-briefings or email Q&A’s and facilitate any follow-up questions after interviews. Also, a little lead time provides PR folks time to conduct follow up pitching to folks to reporters who haven’t responded.
Where does a PR firm provide the most value in the various funding stages?
Pitching the appropriate media targets is always the most valuable part of the process along with crafting or editing the messaging of the release. From a transparency perspective, communicating the firm’s efforts and media updates to clients is always key.
This is great, Noe. Do you have any other takeaways?
Providing reporters with access to briefing investors is always valuable. Specifically, the venture capital press tends to prefer this method when covering a tech company’s funding announcement.
There you have it: a breakdown of the broader aspects of how to handle a funding announcement from a public relations perspective. Like any good magician, Noe can’t give away all his secrets—but we appreciate the insight into how he approaches this important moment for clients.