If executed well, the positive associations that derive from name dropping can lift the perceptions of one’s position in the social hierarchy. In the corporate arena, these are the same positive associations that drive organisations to pay top dollar for highly regarded brand ambassadors.
In the world of startups where funds are somewhat tighter, this effect is often achieved by bringing on a “big name” investor. As an example, telco and advertising startup Unlockd recently achieved some positive attention around its “high-profile investors” (Lachlan Murdoch and Greg Roebuck). The backers behind fintech startup SocietyOne (Westpac, Lachlan Murdoch, and Packer) are regularly mentioned in media stories flouting its success.
In fact, finding a big name investor might even be considered an integral part of any startup’s corporate strategy. Here are some of the reasons a big name investor can help boost your startup’s profile and, in turn, your capital raising prospects.
1. Nobody Likes Being First to The Party
It’s human nature to be cautious about being the “first mover”. A classic example is café display cakes, which usually have a slice cut out, even if no one has purchased a piece yet, to reduce the anxiety of being the first customer to cut into the cake.
Where money is at stake, investors are always…