Strong branding boosts dealflow

The US National Venture Capital Association (NVCA) surveyed 370 venture capital firms, start-up CEOs and limited partners to assess the role of branding in the venture capital industry.

The study found that as well as 88% of CEOs believing that a strong brand can aid venture capital dealflow, CEOs want venture backers to be supportive; to add value beyond investment. However, CEOs are also sceptical of firms that are too "hands-on".

When choosing which venture firm to work with, 57% of CEOs surveyed are most concerned about the reputation of the firm's individual partners, while 38% are concerned about the firm's overall reputation and just 5% consider the reputation of the firm's portfolio companies.

The research found that the most effective method of delivering brand messages is through word of mouth. "A brand is not what you say about yourself, but what your most important audiences say and think and feel about you," says Howard Breindel, co-CEO of DeSantis Breindel, which partnered with NVCA for the study.

The survey found notable differences between what IT start-up and life sciences startp-up CEOs want in a venture backer. For 45% of IT CEOs, an entrepreneur-friendly venture investor was the most important quality, while trustworthiness was cited by 29% and supportiveness was a concern for 26%. For life science CEOs, 58% believe a trustworthy backer is most important, while 42% feel that an experienced investor is key.

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• Topics
• Venture
• Early-stage
• NVCA