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To completely understand what B series funding is, one must be aware of the other initial steps that lead to B round funding. Before a company can reach B series funding from potential investors, they must first receive seed funding and A series funding.
Seed funding is the first stage of acquiring equity for a startup company. This stage presents the initial financial resources that a startup attains and raises. Some companies never get beyond seed funding and into series A, B, or C rounds. It’s most common for a startup business to start with a seed round and then continue with A, B, and C funding rounds.
After receiving seed funding and continuing a successful startup with lots of potential investors, the next step is series A funding. Series A funding is necessary to advance the businesses’ products or services with the secured finances to continue their success. In Series A funding, investors look past all of the good ideas, marketing, and goals. These investors are looking for companies that have more than just an idea; they are looking for a powerful game plan and strategy that will entail a profitable business.
Series B funding is defined as the second round of funding for a startup business through investment, including private equity investors and venture capitalists. It is a company’s second embark on funds after series A funding and focuses on furthering financial means and status. Typically, in this phase, Series B investors pay a higher share price for investing in the company than Series A investors previously had.
At this stage, businesses are already at an advanced stage but want to bring their company to a new level of success. This funding is necessary in order to bring them to that new level, elevate their business, and increase exposure. Series B companies are not new to the game whatsoever and have already completed the first round of funding. Before companies can start series B funding, they must have already had seed funding as well as series A funding. This is a sign that a startup is past the point of the developmental stage of business.
These startups can use Series B funds to expand their team, generate national and global expansion, acquire other business entities, and grow their customer base. Another increasingly popular way startups can invest after receiving funds is influencer marketing. Influencer marketing is a strategy that businesses use to promote their products and services by partnering with popular social media users or bloggers. Influencers typically have a widespread and engaged audience that brands can tap into to build credibility and even drive sales.
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This marketing strategy is best-fit for startups because it increases their engagement and brand awareness while simultaneously costing the company a relatively low amount. The best way to minimize the cost of influencer marketing is by working with micro-influencers.
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With the constantly growing social platforms and digital technology, it is becoming more relevant to reach out to influencers to enable more success. Influencers serve a crucial and pivotal role in branding companies and delivering a message to consumers. More and more consumers are placing extreme value into the hands of their favorite influencers. According to 2016 Think with Google research, 70% of teenagers on YouTube relate to YouTube creators over traditional celebrities. Additionally, Influencer marketing appears on track to become a 15 billion dollar industry by 2022 and shows zero signs of slowing down. It is now a smart business move to jump on the influencer marketing bandwagon for so many different reasons.
Here are 6 of the high impact ways a company can use recently raised funds to invest in influencer marketing and grow their business:
1. Enhance brand exposure
Startups at series B round funding would benefit from recruiting an influencer to market their company by increasing their brand awareness and exposure. This is a huge step to growing as a brand, establishing a wider audience, and even getting a better grasp on who the company’s target market is. It would be important to hire an influencer that is not random or chosen without much thought, but one that’s specific to the product or service goals and mission as a brand. If the influencer is chosen intentionally, the marketing is done properly, and the target audience is identified, the brand exposure benefits will be booming.
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2. Build a trusting relationship with customers
As a brand builds and releases a campaign with an influencer, it creates a more trusting relationship between the company and customers. This is because people are more willing to trust a product or service if someone they equally trust has spoken highly of it or uses it. Additionally, having a well-known influencer represent your product/service causes people to believe the company has monetary funds to do such a thing and therefore is credible as a business.
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3. Set a trend
Hiring an influencer to market a startup could potentially start a trend post-releasing the campaign or advertisement. If the product/service has enough commotion and attention, it could become a viral campaign, photo, or advertisement. If it’s trendy, relevant, and the marketing is done properly, it could draw many eyes to the brand. More and more people would then seek to buy this product or service leading it to become a popular trend.
4. Benefit content strategy
There are lots of benefits regarding content strategizing when using influencers for marketing. Developing an influencer marketing campaign would allow a brand to create lots of rich content with the influencer that can be spread out over a duration of time. This would enable customers to view the brand’s content as more beneficial, interesting, and worthy of viewing. It could also generate more influencers who want to partner with the brand if the campaign is done well and therefore lead to more content down the road.
5. Provide greater value to customers
Investing in influencer marketing will most definitely create more value for the customers of the new company. By offering a quality product/service that is endorsed or backed by a relevant influencer will provide consumers with more reason to purchase from that brand. Influencers alone provide value to the company and will create more loyal customers if the target market is reached with the usage of the influencer.
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6. Keep marketing costs down while still running effective ads
When choosing the perfect influencer to represent your startup company, it can be difficult to seek which person fits the brand perfectly. It is best to seek a smaller influencer at this point in the startup’s lifetime, and seek a lower cost campaign or advertisement. If the company is at the series B funding stage, it is likely that it is still a smaller company looking to grow. It is best to not jump right to getting huge influencers and seek a micro-influencer to help establish solid brand presence. Although micro-influencers are less expensive to partner with and will likely have less of a following, they typically have higher engagement rates and a much more specific audience.
Companies need to be intentional about who they are hiring and make sure to implement the correct marketing for the ad or campaign. Current trends should also be present within the marketing.
Looking for tactics and campaign success? For key examples of quality influencer marketing campaigns, click here!