Last Updated on Wed-Mar-2024 by Robert Bogere
Alan Clayton of ACA Philanthropy & Fundraising argues that while building a brand is crucial for the company, fundraised income is the primary justification for brand investment.
In this era of startups, where innovation is the heartbeat and fundraising the lifeblood, the relationship between branding and financial success takes center stage.
Review this: a staggering 90% of startups face the challenge of securing funding, and while the reasons for success are manifold, one aspect stands out as the undisputed catalyst — branding.
As Alan Clayton of ACA Philanthropy & Fundraising argues, “While fundraised income may not be the only reason, it is the sole justification for brand investment.”
Step into the realm where brands don’t exist but weave the narrative of a startup’s journey. This article serves as your guide through the phase of strategic branding, showing the pivotal role it plays in helping startup growth.
Join me as I dissect real-world success stories, explain the hidden branding tips for investor confidence, and shed light on the expertise brand professionals bring to your fundraising stage.
Let’s embark on a journey where branding isn’t just an addition but the conductor orchestrating the accord of success for startups.
The link between branding and funding
Adrian Sargeant and Harriet Day positioned the brand as a servant of fundraising in their study. Clarity regarding the relationship between branding and fundraising played a significant role in driving fundraising growth for startups.
Your brand plays a crucial role in making your company fundable. According to their study, the processes and procedures required to create and manage a brand also contribute to building your company’s support for key messages.
This is important where the messaging focuses on WHY your company exists. In terms of how to better leverage, the study identified strong fundable brands that were more likely to focus on purpose, proposition, personality, and passion.
Essential branding elements of a fundable brand
1. Mission statement
This statement describes your idea. What is your company all about? Put. A mission statement is a description of an action-based phrase declaring the purpose of your organization and how it’ll serve your customers. This sometimes describes your company, what it does, and its objectives.
Your company’s mission statement offers clarity on the what, who, and why. The best mission statements serve as guidelines for your company’s operations. Your company’s every action should align with your mission statement.
Take TOMS Shoes, for instance. Their mission, to use business to improve lives, pledged to provide a pair of shoes to a child in need for every pair sold. This action-based approach not only defined their brand but also resonated deeply with investors, showcasing a clear mission beyond profit.
2. Clear value proposition
This is your short phrase showcasing the benefits of your offer over competitors. It offers your target customers a boost as to why they should buy your products and services rather than your competitors.
You don’t need to make the mistake of considering your product features when crafting this kind of phrase. It should focus more on the benefits instead of your product features.
Related article: Thinking of unique value proposition? Review these examples
Consider Airbnb, their value proposition of offering a trustworthy platform significantly contributed to investor attraction and subsequent fundraising success.
3. Visual identity
Your startup’s visual identity will leave a lasting impression on the minds of the investors. This is what you front to the public, including your values.
Think of Slack’s recognizable logo, color palette, and overall design. A well-crafted visual identity, including a unique logo and consistent design elements, ensures that your startup leaves a lasting impression on investors, reinforcing trust and recognition.
4. Consistent brand messaging
Your brand messaging should be from your website and social media profiles to your investor pitch deck. Think of your tone of voice, the line of communication, and the main messages.
Working on your brand messaging standard is important so that every time your company positions itself, the investors can easily know identify your identity. Your brand’s proposal toward the investors is what will influence the message conveyed.
Therefore, your firm’s segment and the products/services you offer will have a direct impact on brand messaging. Your consistency will lead to trust and familiarity, which is invaluable in fundraising.
Consistency in brand messaging is exemplified by companies like Apple. From their website to product launches, the tone, communication style, and core messages remain unwavering. This consistency builds trust and familiarity, becoming invaluable in fundraising efforts.
Discover: Know how to develop your brand strategy
Real-world examples
Let’s look at a few startups that successfully leveraged branding when fundraising.
TOMS Shoes
The above is a good example of a startup that leveraged branding while looking for capital. Founder Blake Mycoskie’s vision was to offer a pair of shoes to a child in need of every pair sold. His unique approach to business combined with his heartwarming story got deeply with investors.
TOMS focused on its brand story to secure funding and partnerships, hence expanding its company impact.
Airbnb
Airbnb’s brand strategy played an important role in its fundraising phase. By developing a platform that fostered trust among hosts and guests through user reviews and a seamless booking process, they established their brand as a trustworthy company.
This trustworthy factor added significantly to attracting investors and raising more capital for the Airbnb business.
5 tips on how to build investor confidence through branding
1. Develop an interesting, unique brand story
A brand story is a narrative connecting your brand with your target audience’s emotions, needs, and aspirations. It’s a way you narrate your startup origin, journey, and vision compellingly with the investors and customers.
Your startup story is beyond your values, mission, and vision statements. This is the heartbeat of your firm. It should narrate the journey, values, and purpose behind its why.
When fundraising, investors are not looking for only a unique product or service, they are investing in your vision.
Having an interesting brand story can make your startup unforgettable. A strong brand story captivates and inspires a buzz around your startup, attracting the attention of not only individual investors but other key stakeholders in the investment space.
Your startup visibility will open more doors to networking opportunities and partnerships with other investors. Your brand story will help you showcase your impact, values, and differentiation in your marketplace.
2. Define your brand identity
Before you start pitching your business to preferred investors, you’ll need to have a clear and consistent brand identity reflecting your mission, your values, and your unique selling propositions.
Visual elements play a role in brand recognition. Your startup should invest in crafting a visually appealing brand identity reflecting your mission and values. This will include developing an interesting logo and selecting appropriate color palettes and images that evoke the desired emotions.
Your brand identity needs alignment with your product/services, target audience, and competitive advantage. It should be original, memorable, and distinctive.
3. Communicate your startup value
Brand value is the perceived benefit or advantage your brand offers to your customers and investors. Think of a reason why they should choose your products/services over your competitors.
A strong brand value can help you position your startup as a thought leader and an inventor in your space or field. It also helps in justifying your prices, valuation, and return on investment.
To communicate your brand value, you will need to use value proposition canvas, pitch decks, one-pager tools, etc.
A well-developed pitch deck or investor presentation conveys complex information in a visually digestible format, capturing the buzz of investors during critical pitch sessions.
These tools will help develop a clear and concise message showcasing your problem solution fit, product-market fit, and fraction and potential.
4. Leverage your brand community
A brand community is a group of people who share a common interest, passion, and loyalty for your brand. Such groups can be your customers, fans, advocates, or influencers.
Your loyal and engaged brand community will help you amplify your brand visibility, reputation, and referrals. It’ll also help you gain valuable feedback, insights, and testimonials from your users and supporters.
To use your brand community, you will need to use strategies like social media, content marketing, events, etc.
5. Develop a consistent brand experience
Brand experience is the interactions and impressions your target audience has with your brand across all your touch points and channels. It’s your way of delivering on your brand promise and creating value for your customers and investors.
Discover: Ultimate brand experience strategies
Your overall brand experience will reinforce your brand identity and increase your brand awareness and recognition, hence generating positive word of mouth and referrals about your startup.
Navigating startup funding challenges: Strategies for success
Build trust
Establishing trust is important when your startup is new and small. Your startup is beyond your logo, visual elements, unique value proposition, etc. It involves your company ethos and promise to your target customer.
With such a challenge, branding will serve as a foundation for your customer trust. Through your branding, you’ll need to create a transparent feel for the investors by communicating your mission, vision, and how your funds will be used.
They do not build such brand trust overnight. It requires maximum effort, energy, and delivering on your promises. The reason why branding is important in the startup ecosystem.
Discover: Know the cost friendly strategies to grow your brand
In such an ecosystem, consumers have a range of options to pick from. Investors want to fund startups that are loyal to their customers. The loyalty serves as a testament to the ability to deliver on your promises.
You’ll need to showcase success stories and testimonials for those who have benefited from your efforts. This will add authenticity to your cause.
Partnerships and collaborations
Branding will not only benefit your startup in its customer-facing interactions. It will set the stage for partnerships, collaborations, and, most importantly, fundraising activities.
As your brand strengthens its place in the marketplace and the minds of its target audience, it will become a more attractive venture for investors, partners, and stakeholders.
Branding will play an irreplaceable role in startup fundraising. From building trust with customers to attracting investors. It’s the secret behind many successful startup stories.
Target audience engagement
Attracting and maintaining the attention of your target audience can be challenging in this competitive era of global startups.
The best way to overcome such a challenge is to work on an interesting story that aligns emotionally with your target audience. People like to buy from relatable brands. You need to share your stories that showcase your startup impact.
The role of brand experts or agencies in your funding stage
Time and cost savings
You may struggle to do it yourself in developing a proper strategy to reach your target audience, gain the investor’s support, and amplify your message to create change or achieve your startup goals.
With this kind of issue, you’ll need to hire either a brand expert or an agency to help you get the right based on best practices and a more integrated approach.
Instead of spending much of your time and money on doing it yourself, an expert like me can help you develop a proper strategy to generate results and achieve your goals in time.
Skills and expertise
Brand experts will offer you the added benefit of knowledge and experience to what exactly you need. A good expert will offer a skillfully crafted and integrated approach, sometimes at a fraction of the cost of one of your full-time employees.
Conclusion
For your startup’s success, branding emerges not as an afterthought but as your guide, resulting in growth, credibility, and lasting impact.
From the remarkable journeys of TOMS Shoes and Airbnb to the great tips for building investor confidence, we’ve looked at where purpose meets perception — the focus of effective branding.
As I end this exploration, remember the hidden importance of branding. Successful startups are the offspring of financial prowess but testimonials to the mastery of effective branding.
Purpose and perception, combined, will fuel your startup growth and amplify credibility in a stage where applause transcends dollars.
As you embark on your startup journey or refine your existing venture, let the dynamic force of branding be your guiding light.
Propel your growth, captivate investors’ interest, and leave an indelible mark on the stage where the applause resonates not just in currency but in the enduring impact of a well-crafted brand.
Unleash the power of branding — your startup’s silent maestro.
A determined soul who battled with self-doubt. Feeling trapped in rut race for 8 years, he struggled through careers and lost confidence.
On edges to give up for good. One day, he decided to show up and started on LinkedIn where he started studying FREE online courses plus making sales noise.
The above changed his life and now offering proper strategic guidance and direction with customized brand solutions to 2x clients and revenue growth to purposeful startups and small businesses.
