You’re a small, bootstrapping business that’s seen a little success, or maybe you just came up with a really great idea. Now you’re looking to expand your startup and take it to the next level. To do that though, you have to endure a rite of passage for many entrepreneurs: funding.
Acquiring seed capital, whether it’s from an angel investor or a multi-million dollar venture capital firm, is a challenging task that involves hundreds of pitches, hours of research, and pesky financial models. Social media can help you parse out the important information and bring you a step closer towards investment.
The following are four recommendations for using social media when you’re in the funding process:
Recommendation #1: Use social tools to research the firms you’re pitching
Knowing your audience is essential to crafting the right presentation and business plan. Check out not only what the firm has to say (via their website or their Twitter feed), but what others are saying. Set up a Twitter search for keywords involving the firm and see how others have fared.
Better yet, connect with anyone who has pitched to them before and probe them for the questions they were asked and the feedback they received. Facebook and social media tools make it easy to find these people and their insights.
Recommendation #2: Join TheFunded.com
If you could only visit one website before going in front of the partners of Sequoia Capital, it had better be TheFunded. It’s a community of entrepreneurs that have been through the funding process. On the members-only website, users can anonymously rate and review specific firms. People explain, in great detail, the process, the people, the questions, and their gripes.
Recommendation #3: Connect with potential investors
Social media has made it easier than ever before to connect. Introduce yourself to a venture capitalist with a Facebook message, make yourself visible with @replies, and especially join social media services that he or she has funded. The more visible you are (without overdoing it), the better the chance you will stick in his or her mind.
Recommendation #4: Don’t complain using social media
This one may seem obvious, but the reminder is still important. Everything you say, do, or put on the Web is searchable. If you tweet out that a certain VC was a jerk or worse, other investors that look into your profiles will see it and be wary of working with you. Don’t let social media be your undoing, because it can give you a big edge when presentation day rolls around.