I love listening to technology entrepreneurs talk about starting companies. Sooner or later, the conversation comes around to raising money – entrepreneurs usually have a lot to say about it, and the listeners usually have a lot of questions. These behind-the-curtains glimpses at the less glamorous part of starting up a company often are poignant, humorous, or some combination of the two.
At an informal discussion earlier this week at our local technology hub, a superstar in our community talked about entrepreneurial lessons learned. In addition to the usual discussion about raising money, he talked about how the experience shaped his own decision making on investing in other tech companies.
Surprisingly, he didn’t prioritize the usual investor bait of a big war chest of cash raised from big-name investors. Instead, the advice he gave to an exceptionally well-funded start-up that wanted his investment went something like this:
“Great, you have a lot of money. Do you have any customer success stories? Do you have any press?”
When the start-up confessed that it had no press coverage, he recommended that the company come back when it had some clips to share.
Don’t get me wrong – cash is crucial for tech startups, as is investor confidence. But it’s also smart to value the independent recognition that comes from earned media. Press mentions and stories capture the attention of prospective customers, but they also capture the attention of investors. As you plan your start-up budget, remember to include a line item for PR.