Venture capital firms have been investing in marketing and communications with their time and management fees for years, but recently even more are coming on board. Some even stand out as they invest aggressively in public relations for their firms and portfolio companies by hiring experienced communications professionals and well-known journalists.

Bringing on board star journalists to capture ink and airtime for both the firm and the portfolio companies could pay big dividends, boosting the firm’s brand which they can leverage in their next investment but also generating interest in its portfolio company and hopefully demand for the company’s products and eventually the company itself in a future round of financing.

Image: More journalists join VC firms

Not every VC firm will be able to hire 1) the beat reporter who covered the firm for the past several years or 2) the industry reporter who knows all the startups the VC’s portfolio company competes with. So how should you maximize your marketing and communications plan if you have a modest budget and you’re relying on in-house staff to manage and maximize a marketing plan?

One of the best marketing investments VCs can make

One of the strategic marketing decisions VCs can make is to tell their story. But many firms misunderstand this by trying to impress rather than inform. Many venture capitalists who eschew any marketing at all, claim to prioritize their portfolio companies rather than themselves.

What these VCs are really saying is that the headline-grabbing style of PR is not for them. The truth is they have to be known, understood and respected to attract and make deals. That’s a strategic choice, but it doesn’t have to be a choice to go dark.

Competition for deal flow has increased, in part from increased marketing efforts from investment firms, but also from the breadth and variety of financing options available to innovative companies from pre-seed, to ad-hoc Angel Syndicates to Series-A to Mezzanine. Carefully choosing targeted media, analysts and influencers to work with, selecting the appropriate speaking and networking events and crafting the most helpful content will help firms tell their story when, where and to whom they want to, without stealing the spotlight from their investments. Having a reputation for being entrepreneurial-friendly, smart and insightful about a particular sector has much less of an impact if few of the up-and-coming entrepreneurs know this to be true, your colleagues with whom you hope to syndicate deals rarely hear about it, and LPs only get a glimpse once a year.

Being strategic means increasing your signal without increasing the noise. It is all about improving market insight, and getting better, faster and more comprehensive information about the people and organizations that influence your market and then using it to your advantage. To sustain a meaningful conversation and create an advantage with marketing, you need to get the right message out at the right time and to the right people. That requires integrating the appropriate data, research, analytics and tactical analytics to make your marketing and PR efforts more targeted and effective.

Image: Strategic marketing

Making market insight your advantage

When big brands with big budgets are boiling the ocean for leads, savvy marketing and communications professionals look for efficient means for exploring the tributaries, getting directly to the source of opportunity as quickly and effectively as possible. Today’s technology can help you identify influencers early in the game and understand the chain of influence that leads to recognition and engagement with the right innovators and entrepreneurs before they are in the market for capital. By using data-driven insights, you can create a customized and streamlined communications process that gets targeted results.

For example, one of the tactics marketing and communications professionals can use to be more effective is to closely following bylines in the media to learn who entrepreneurs are connecting with — not just those who are writing about entrepreneurs. Knowing, tracking and targeting these influencers is an investment that pays off by narrowing the field and focusing the conversation — and your effort.

Just yesterday Evelyn Rusli of The Wall Street Journal tweeted this photo of the new technology journalists in the San Francisco Bureau:

Image: Tweet from Rusli

We’ve been able to develop systems over the past several years that monitor and refine true influencers, which has improved the quality of the conversation, whether for large late-stage growth companies expanding their corporate reputation or for investors developing new investment thesis or reiterating their commitment to an established track record.

A marketing and communications effort in venture capital should meet a wide range of needs, from increasing demand and enhancing investor relations to improving portfolio marketing. We find firms communicate most effectively, and most authentically, when they align their investment strategy with their marketing strategy.