Can early-stage VCs get a new lens on startup deal flow for more informed decisions and faster ROI?

Early-stage VCs often make decisions on investments based on cold hard facts and figures. But what if there was another lever to evaluate startups, that could give additional insight into the conviction of marketing plans and ROI, by seasoned marketing experts, who have spent half their lives working in ad agencies?

By digging deeper into the brand and marketing strategies when forming an investment decision, could VCs gain a better understanding of both the immediate activation runway post investment, and highlight and mitigate any risks to drive ROI?

A startup that has invested in brand and marketing will be better equipped for customer acquisition, expanding their market share and more likely to generate a higher return on investment.

We have worked as an EIR Consultancy with several investors, as an addition to their startup pitching panel, to add an extra layer of intelligence and due diligence from a brand and marketing angle.The rationale from the early-stage VC side is, if even one additional start-up can provide a better ROAS, then it is worth the additional spend and analysis at the get-go. Plus, having a board level brand and marketing specialist who understands the immediate needs of the business post investment, means the Founder/CEO can quickly create strategies to create value in the startup and ROI for the investors.

Ultimately for the investment to generate a return, it needs sales, and to get sales, you need customers. The people who know how to drive customer acquisition strategies are the marketeers. The best of the best are in expensive ad agencies - a high cost for startups, and a full time seat is not required, so it is often given to someone smart, but with less experience, and often the brand piece is pushed to the back (as it’s hard to show brand equity through metrics and at early stage and when there are performance driven investor KPIs to meet).

Having a strong brand will also help your startup portfolio to attract and retain the best employees. They want to work for startups with strong brands, because they believe that these companies are more likely to be successful. Plus, they are future proof and can help them to advance their own careers.

The key things that can inhibit growth post investment, from a brand and marketing point of view are; not being clear on your target audience and messaging, not being brave enough in advertising creative to stand out against your competitors, not having a single-minded product proposition, and not having a solid brand strategy.

However, as an early-stage VC, being aware of the weaker areas within brand and marketing of a startup that shows strong market potential and alignment with your investment objectives, means you can mitigate this risk, get a strategy in place, get the team flying and maximise your ROI.

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