Helping Startups Succeed When VC Funding Slows Down
It’s becoming quite apparent that the Startup world is experiencing a slowdown and there appears to be no quick-end in site, unless you scrap everything your doing and start over. According to many articles from very reputable news sites around the web, the common issue at hand is the lack of funding coming from Venture Capital Firms. In addition, due to this shift in funding, Startups are now forced to change their thinking on how to grow their business on a shoe-string budget. In this post, I will discuss the importance of hiring a digital marketing firm that can not only get their business off the ground, but also do it without relying on the stress of getting additional funding to keep the doors open for another month.
Why is Venture Capital Slowing Down?
Across the major news sites and tech blogs, there has been a slew of articles discussing the apparent slowdown of Venture Capital funding across the globe (not just in the USA). According to the Forbes article entitled Tech CEO Shares Difficulties of Raising Venture Capital in a Down Market, the authors Samantha Walravens & Heather Cabot of GeekGirlRising stated “According to a 2016 report from PricewaterhouseCoopers and the National Venture Capital Association, funding in Silicon Valley startups fell 19.5% in the first quarter of 2016 compared to a year earlier, and is down 10% for seed stage companies in the first quarter 2016, amidst fears over the global economy and the run-up in startups’ valuations.”
To reinforce this trend, another article from Bloomberg.com, entitled “Is There a Slowdown in Venture Capital?” Phil Libin goes on to say that the reason for the pause and/or decline in Venture Capital funding is due to the current lack of interest of those “Me Too Businesses” that once thrived with the evolution of smartphones and social media. However, he does go on to say that right now is a great time for startups that can offer something new and original. See the video below for the interview (courtesy of Blooomberg.com)
Is Online Finally Catching up to Traditional Media?
In another yet predictable twist, it appears Social Media has finally started to crack that old TV Advertising Egg and is creeping its way deeper into the annual $70+ Billion Dollar TV Ad Budget. According to the AdAge.com article “TV Budgets Shifting to Social? Yes, It’s Time to Worry” author
Debra Aho Williamson states “… eMarketer believes the conversation about social and TV will change. For buyers who want the best way to reach their audience, the growing video businesses of Facebook, Instagram, Twitter and Snapchat now present a viable alternative to TV.”
Williamson also goes on to say that even though this shift sounds monumental, the actual amount of Ad dollars from TV to social is very small. On the other hand, she believes that this trend can very easily become a real “game changer” in the near future. So, with the potential of more advertising dollars making their way to the online marketing world, Startups are going to have to rely more on Digital Agencies to promote their product/service.
Getting Big Agency Results on a Shoe-String Budget
Since VCs and Investors are only interested in funding companies that offer something new, exciting and most importantly different, what does that mean for those “me too businesses”? Due to this natural shift in the business ecosystem, Startups need to find a more affordable way to launch their “baby” to the world without going bankrupt in the process. To help with this scenario, startups need to find a reliable Digital Agency that can jump right in and “move the needle”. This agency would need to provide guidance and help build the foundation needed to compete in this highly competitive online space. Here’s a recent article entitled “What Every Startup Needs to Know Before Choosing a Digital Agency” which can help highlight other services that Startups can benefit from.
Here is a brief outline of the services that startups need to remain competitive
Many Startups, especially Early-Stage Startups, operate on very small Ad budgets and are often second guessing themselves on where they can get the “best bang for their buck” with regard to online advertising. Based on the trends mentioned in this article about the decline in VC funding Social media getting more of the overall Ad budgets, it’s pretty clear that Startups need to focus on finding an affordable digital agency that treats them like a partner and not another typical client.