I knew that social advertising was becoming very popular in the business community, but I had no idea that people were using social ads to attract financial investors.
I recently found this out after reading a few articles in several financial magazines. One article stated that the number of business start ups using social advertising to attract financial capital had increased by fifteen percent from last year. Some of the reasons given for using this strategy included a more effective way to target the right investors, and also being more effective then participating in a pitch conference.
Although thousands of people attend pitching conferences each year, only a small percentage are successful in securing financing. For those who are not familiar with pitching conference concept, it usually involves several companies making a formal pitch for financing in front of a panel of investors. Depending upon the size and scope of the event, the panel of investors can range from high profile investment firms to independent angel investors. Participating companies usually have about five to fifteen minutes to make their presentation pitch. The goal of the presentation is convince an investor that their company or product is a worthwhile investment that will generate a profitable return. While investors often invest in companies or products that intrigue them, at the end of the day they are in this to make money. Because the competition is so intense, each presenting company has to work extra hard to ensure that their pitch is distinctive and effective.
While most start up founders do agree that these type of events can be helpful, most also agree that they don’t generate a high degree of results. Which is why some have started looking at other alternative options for generating start up capital.
There hasn’t been a recent report generated as to how much success start up businesses have had securing financing through social advertising, but the growing number of ads placed seemed to signal that this method of fund raising must be somewhat effective.
The key to having a successful social ad campaign for this type of need, is making sure that it is strategically placed. Meaning that the business looking for venture capital needs to have a good idea of where their potential investors are. This starts with creating a list of potential social sites based on viewership and category. Then it is a matter of narrowing the list down based on their specific need.
The design of the ad is also something that should be carefully thought out. Key points to remember include making sure that that ad message is very clear and specific, and at the same is visually appealing. It takes all these details to create an ad generate interest and attract the attention of the right audience.