What Israeli Micro VCs can do to Stand Out
Author: Jonathan "Yoni" Frenkel, Content Marketing Strategist
It is not just startups who are feeling the pinch because of the pandemic this summer. The virus has put a strain on all aspects of the economy, including investors. While things have shifted from being an “entrepreneur’s” market to an “investor’s” market, finding and getting into good deals is always a competitive business. VCs have money that needs to be invested, and while many startups have been wiped out there are new categories being created and problems related to the virus that need to be solved. All this will usher in a post-COVID-19 generation of startups.
Along with the global growth of tech ecosystems over the last few years, micro fund VCs; those with less than $100M in assets under management (AUM) have sprung up to fund those opportunities.
Granted, that fund size may be considered large in Israel, but some context regarding this as this Kauffman Fellows global report reveals that “according to PitchBook only 100 micro-VC firms were active in 2012, and as of October 2019 over 900 micro-VC had been launched resulting in ~9x growth in just 7 years.” The challenge, of course, is that without a major exit, brand awareness, or a big name attached to these types of funds the competition for mindshare of killer entrepreneurs, potential limited partners, and corporates becomes challenging.
While we are starting to see marketing leads and CMO roles at VCs the industry has not fully embraced a marketing strategy, at least not as sophisticated as what would be expected from a fund’s portfolio company. It used to be the golden rule that “whoever has the gold, makes the rules”, but not anymore. Even during COVID times with money in the ecosystem and terms in favor of investors, marketing should be a focused priority. In understanding US based investors’ marketing practices, the Israeli venture ecosystem offers a blue ocean in developing real mindshare for those willing to break from the usual marketing strategies.
Put it Down in Writing
In some of my conversations with investors I have at times encountered a real reluctance for them to put their ideas out there in the world. This comes from the fear that their ideas will be “stolen”, or that they may be proven “wrong”. When they finally write something, the piece is killed by editing, and in many cases not put out into the world. If you have the desire to help build something along with the entrepreneurs in whom you invest, you have an article or blog in you. You are doing a service to entrepreneurs by putting your thoughts out there, so they understand what you are thinking and investing in. One of the best examples of a VC who consistently blogs on thoughtful content is Union Square Ventures Fred Wilson. His posts are not usually particularly long, but short and thoughtful, and if there has been a single marketing strategy (let us put aside his fund’s success) it has been his blog.
Here is the secret: if your early pieces are not great, no one cares. Seriously. Speaking on panels or being active on Twitter while not a net negative is not writing. Tweeting is a butchery of the English language and frankly, a lazy way to get ideas out into the world. Writing is hard, just like building a company, making the right investments, and like doing anything worthwhile, is worth doing well. You just need to do as Ernest Hemingway stated on writing: “there is nothing to writing. All you do is sit down at a typewriter and bleed.” I am not telling you anything new, I am just giving you the permission to start, and to know you do not need to be Ernest Hemingway. All you need to do is get started.
Reconsider the Usual
There are B2C investors who have successfully used Instagram such as VC Jenny Gyllander’s CPG focused account thingtesting, but that is probably not most investors, particularly in the Israel ecosystem. With that, there is something to be said about looking at platforms beyond Twitter and Medium. I personally use Medium as I like their clean design, and it is good for discovery. But is it truly the most effective way to communicate with your potential audience (LPs, corporates, entrepreneurs)? The same goes with drawing people to your website, while having content live on your website is not a bad idea, why not optimize and be on a platform where your thoughts can be discovered.
You could consider a platform such as LinkedIn as a microblogging platform and post your thoughts in under 300 words, or even use LinkedIn Publishing for longer form pieces. I know one VC in Austin who sources a lot of his deals while engaging on LinkedIn. He found that by looking at who the entrepreneurs he is investing in are ‘Liking’ (i.e., other talented entrepreneurs) turned into a way for him to get good deal flow. Most American VCs are still on Twitter, but I believe there is a blue ocean for an investor who wants to micro blog thoughtful content on LinkedIn every day, get good organic growth, and build thought leadership.
Don't Be Camera Shy
I have not really seen any investors who have fully optimized video to communicate their vision (if that is you, please reach out, I would love to hear how it has been working). There are YouTube videos/podcasts of interviews, but a VC vblog I have yet to see. Entrepreneurs and executives understand the power of video when communicating a message “59% of executives agree that if both text and video are available on the same topic, they are more likely to choose video”. This can be something as basic as posting a 1-2-minute video and uploading the native content to LinkedIn (make sure to use subtitles) on a business trend or thoughts on a current event. As of this writing if Microsoft does acquire TikTok I would gather you will see B2B TikToks on LinkedIn replacing the budding LinkedIn ‘Stories’ feature. So maybe it is time to start considering how a platform like TikTok could help you gain more visibility.
While it’s true that many VCs have not launched their own YouTube channel, John Henry of Harlem Capital is a good example of what a successful channel could look like. I am going to advise against podcasting at this point as the pandemic has negatively affected podcast downloads. As an example, less people are commuting, a primetime for people who listened to podcasts. While it is trendy to launch a podcast, most fail in the first 3 months, it’s a lot of work, and if anything, my focus would be to do something different then what everyone else is doing to get people’s attention.
Pitch, Pitch, Pitch
If you are producing a consistent amount of content, then you should consider what publications would be open to featuring your writing. When reaching out to editors know it is a numbers game; this is different than hiring a publicist or developing relationships directly with journalists. Most editors will not even respond to your emails (so put any ego aside), and most investors do not think to publish in a publication with major reach as opposed to the usual Medium post because it is hard to get a yes from an editor.
You must remember that many publications need the content, and value an ‘expert’s opinion’, and as a VC you have street cred. Readers are always interested in hearing the perspective of an investor as that offers a window into understanding their thinking. Your goal should be to be playing on the largest playing field that you can play on and reach as many people as possible, including those difficult to reach LPs and corporates. This may take some time but getting a regular writing gig could prove to be beneficial and help secure real mind share. When you get to that important meeting, you want the party sitting on the other side of the table to have already heard of you.
Think like an Influencer
Entrepreneurs such as Elon Musk have embodied this idea of the entrepreneur as a rock star, with the investors as working backstage to hold up the curtain. We are certainly in an era where the entrepreneur (rightly so) is lionized, but just how the popular show ‘Entourage’ placed the agent (Ari Gold) front and center, the same can go with VCs. If you want further proof of this idea of star appeal, check out CAA founder Michael Ovitz’s book, and how his talent agency model was the blueprint for Andreessen Horowitz’s fund. Star power was in their DNA. It is not just about speaking on panels (not a bad idea) and posting portfolio company accomplishments on LinkedIn but thinking like an influencer and building a personal brand. Professionals in Israel sometimes make noise without having something to say, so if you are a thoughtful VC you should think about the message you are putting out there.
Everyone understands the importance of personal branding, building thought leadership, etc., but investors up to this point may have not attributed much importance to it for their professional success. Influencers on social media live and die by engagement, Likes, Shares, etc.; much of that is even connected to how much money they earn. Thinking and acting like an influencer, or better yet, a micro-influencer with their specific community or expertise would grab the most precious commodity these days: attention. What does that look like in practice? Utilizing the examples stated in this article, but above all, showing a bit of vulnerability and relatability, and thinking about what your community or audience truly desires. This builds trust, which leads to engagement, which leads to opportunities.
Many of these ideas may have not been relevant in the Israeli venture ecosystem a few years ago but with the influx of foreign capital into the ecosystem and the explosion of micro funds, as well as new investment opportunities such as wellness, foodtech, e-sports, and CPG just showing up with money may not be good enough. COVID is not just an acceleration period, but also a compression period which creates diamonds under pressure. There will be young startups, many started by Gen Z entrepreneurs appearing on the scene, and you must be ready to seize that opportunity.
Jonathan 'Yoni' Frenkel has been involved in the New York-Israeli tech community for many years, mentoring startups on marketing, hosting events connecting investors with startups, and publishing on the topics of tech and venture regularly. Professionally, he heads a content marketing agency, YKC Media, and works with VCs, corporates, and startups in creating written content, social, and marketing strategy focused on engaging a US audience. He can be reached on LinkedIn here.