Thoughts on startups by investors that
fund them & entrepreneurs that run them

Up-to-date Investors Want Social Proof from Startups

I just read Social Proof Is the New Currency on the Social Media Today blog. Author Daniel Lay writes: 

Whether you like Mark Zuckerberg’s mug or not, the social web is here to stay, and businesses that can integrate social proof into their marketing efforts seamlessly will join this new “socially rich” class. We mean richness in fans and followers, not number of zeroes in your bank account. Social proof is the new currency of credibility.

I don’t agree completely — I think a fat bank account is a really good thing too — but I do think it summarizes an important truth: All startups looking for investment need to deal with what that post is calling social proof. To me, the underlying reality is that startups and their founders are traceable on social media. There are footprints to track, or — far worse — no footprints. 

Take it to the pitch moment, say a startup pitching a group of angel investors, which is a scene I see often. Startup founders will be judged by their social media footprint. The startups themselves, as businesses, will be judged by their social media footprints, alias social proof. A founder basing projections on social media marketing will look good if she has thousands of Facebook likes and Twitter followers, bad if she has none or only a few. The social proof, or lack of it, is evidence. Up-to-date investors understand that.  

Social proof can’t be manufactured from one day to the next. It takes time to create a credible footprint. It’s one of the first activities to start as you get rolling. Somebody among the founders should have a stream established from a few years back; and the company itself should have a stream that is at least a few months old, with credible updates, and something to show for itself. 

Written by Tim Berry

user Tim Berry

Tim is the founder of Palo Alto Software and bplans.com, the co-founder of Borland International, and the official business planning coach at Entrepreneur.com. He has been called the "Obi-wan Kenobe of business planning" and "The Father of Business Planning." He is a serial author of books and software on business planning.

prev next

You might also be interested in

What Belongs in a Startup’s Pitch Deck?

So you’ve developed a game-changing product, formed a business with a killer team, quit your job, and are rolling the product out to market. Your business is the next unicorn, and all is good in the world. Fantastic. Now only one thing is inhibiting your company’s growth: you have no money.

For many founders of high-growth startups, bootstrapping has limits.

Read more >

From Accelerators to Venture Capital: What is best for your startup?

With startup growth up 61% since 2014 and more investment programs emerging, it can be overwhelming for founders to know just where to jump in. As the most startup-friendly accelerator on the planet, MassChallenge has helped 835 startup companies around the world, who have raised over $1.1 billion in funding and created over 6,500 jobs. We have seen startups at

Read more >

Ask A Founder: Startup Lessons Learned from Work Truck Solutions’ Kathryn Schifferle

Kathryn Schifferle, Founder and CEO of Work Truck Solutions, turned being a woman in work trucks into an oversubscribed $2.1 million round.

We sat down with Kathryn as she shared what her fundraising journey was like, the startup lessons she learned, and her advice to fellow founders, especially women. Here is what she had to say:

HK: Tell

Read more >

Valuation Part I: Peeling the Onion, or How Top Investors Value the Startups They Invest In

Update 2017: To help you understand how your startup will look to investors according to this methodology, we’ve created a fundraising feedback tool that will give you investor-level insight into your startup’s performance. In just about 15 minutes, it will tell you how much money your startup is likely to raise, where you can find that capital, and what to

Read more >

Trying to Raise Money? Thinking About Gust for Startup Fundraising?

How to Make Your Gust Account Stand Out to Investors

Before you read any further, I want you to know that I’ve personally used Gust to raise money for my first tech startup. I know a lot of other entrepreneurs who use or have used Gust to seek funds, but their profiles don’t always get attention from investors. Below are

Read more >

Comments

One thought on “Up-to-date Investors Want Social Proof from Startups”

  1. David says:

    I agree social signals count, but they can and are bought in great quantities now, not just followers and likes but interactions like shares and post likes & comments. How can one distinguish between the real and bought/traded social signals? Thanks, David, owner, curbpainting.com