What the Shift in Late Stage Funding Signals to Marketers

Mark Nardone

Marketers should take note of the recent trends that are occurring because of VCs shifting their funding strategies. By no means is this a major concern to the emerging growth (Angel to Series A/B rounds) brands looking to secure a place in their industry’s market. This sector has continued to secure funding at record pace based on the innovation and make up of their potential. But it does mean an adjustment for the later stage companies (public, acquisition or P/E) looking to scale and grow without the watchful eye of the “street.”  And this will signal yet another opportunity for marketers to own the moment.

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In Q2 2018, late-stage funding accounted for almost 64% of the deal flow, up from 42% in Q2 2017. Over time we’re seeing more of the overall dollar volume gradually shifting to late-stage companies potentially taking away from other stages including angel-seed, early-stage and technology growth. It’s not a viewpoint I share, however. The volume of deals being secured at the early-stage levels are still on record pace. It’s just the runway for success may afford marketers a little more time to grow brand equity through customer loyalty and leveraging the “Voice of the Customer” (VOC) rather than just the path to purchase. In addition, it presents an opportunity to engage with influencers that are driving the industry conversations rather than observing.

So, why is it vital for early-stage companies to prioritize and budget for VOC and influencer marketing programs? Let’s look a little closer at why these are the new game-changing programs:

  • Voice of the Customer Becomes the Crux of Lead Gen – Brands that have secured these massive rounds of late-stage funding have done so for a reason. Aside from their great executive team, they have a proven product offering, engaged customer base and significant opportunity to acquire and grow revenue. Voice of the Customer can support these strategic goals in many ways from case studies (video is key here) and overall brand validation to word of mouth (WOM) and referral business. This becomes an essential ingredient to any sales model and is driven by and from marketing.
  • Influencers are the Driving Force Behind Thought Leadership and Third-Party Validation – With a reputation that is on everyone’s radar, executive teams must strike while the “iron is hot.” This can take several approaches from subject matter expertise to executive thought leadership around vision, execution and opinions. However, you must look at influencer engagement as a critical tool in this step of the game. Who is watching you? Are they engaged with your competitors? What areas of interest lines up with your goals? If you haven’t by now, get rolling on an influencer marketing program. Look at analysts, other executives driving the conversations, general influencers that have personal brands that can drive your objectives. Build a platform driven around content and storytelling and leverage this through social media, relationship building and overall trust and knowledge sharing. And set the right expectations – this won’t happen overnight.

It’s clear that the pressure and competition is fiercer than ever for early-mid stage companies trying to get the attention, trust and funding from VCs. This means that these emerging growth companies have no choice but to step up their game. It also means that the stakes are higher than ever before for later-stage brands looking to take their game to new levels. They’re going to have to build and scale their business strategically to separate from the competitive landscape. Scaling a business goes hand in hand with having the right marketing structure and strategy in place, knowing what’s going to work best in your given market.

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I could have mentioned ten other activities to focus on, but we’ve heard from several later-stage companies that the area they are most excited about and concerned with is the customer experience and influencer playbook. Keep it simple, but let’s begin to work on new areas that brands should expand on now that you are “flush” with additional investment. The right strategy is critical and guidance to make those tough decisions is something that these businesses can’t afford to cut.

We are working on a program that will meet the needs of certain stages of a company’s evolution. Be on the lookout over the next few weeks as we look to formalize these offerings to help marketers simplify the opportunity. Complexity drives down productivity. 

Are you a marketer who has recently been fortunate to leverage investments for expanded brand building equity? Hit me up @MarkCNardone if you’d like to share an opinion or two or talk through some options.

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Topics: Thought Leadership

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