Dear Tech Founder,
Your spouse knows you’ll succeed. Your Call of Duty buddies think every human on earth will crave your product. Your mother truly believes your concept is brilliant – at least the parts she understands. But none of them can spare, or actually have, the twenty million dollars you need to fund your growth. You need an investor, and they’re harder to convince.
Before investors will hand over their money, smart ones consult experts like industry analysts (Gartner, Forrester, IDC, etc.), and rely on their opinions to understand the opportunity you present, the market you compete in, and the odds of a return on your portion of their wealth. That’s why, as a founder or CEO of a startup or scaleup, you need to understand the investor/analyst ecosystem. Analyst Relations is a must-have tool to obtain funding from everyone but your mom.
Funding is a critical aspect of startup life. Rich uncles are rare. It’s typically sourced through Angel Investors or VCs. Your success depends on working with them, so you’ll want to do it in the best way possible. It costs a lot to fumble a rare opportunity. There is an entire ecosystem between investors and analysts that you can use to your advantage or ignore to your peril. Approaching investors without an analyst relations strategy is like crossing the street blindfolded. Don’t take that chance.
Investors are looking for value and searching for the next big thing. But markets are complex, confusing, and ever-changing. Especially in the tech space. So nobody invests on a whim. They research. And nobody invests without advice.
Investors lean on analysts.
Industry analysts (Gartner, Forrester, IDC, etc.) do nothing but study technology trends. It’s their job to know what’s happening, what’s likely to hit big, and what’s likely to fail. There is an analyst in your market niche right now that knows the technologies, the vendors, the customer needs, and your competitors.
Investors lean on analysts to vet concepts, trends, and vendors. It’s fast and powerful input. Firms like 451 Research (part of S&P Global) have a whole division focused on providing this guidance.
Analysts help investors make bets.
Startups are looking to grow in a solid, healthy way. They leverage analysts to speed their journey.
Analysts can introduce the startup to buyers, spread awareness of their brand, and give them highly valuable feedback and advice on everything from messaging to the product roadmap.
The best investors advise their startups to work with analysts and get these advantages because few startups take advantage of this lever… so they get outplayed in the market. And never reach their potential.
Analysts help startups grow.
If you’re an investor looking at startups, make sure to inquire with analysts about them. They’ll help you understand which startups may be the next best thing.
If you’re a startup looking for funding, make sure the analyst community knows about you and are impressed with your differentiators. Don’t be the one the analyst never heard of.
Of course, if you’re only interested in funding lunch, your mom will be happy to invest.
Robin Schaffer, AR Evangelist