Bure Valley Group is an investment introducer platform which links successful investors with exciting, innovative UK startups seeking funding. This content is for information purposes only and should not be taken as financial or investment advice.
Many factors influence the success of a startup. Its business model, its team and marketing plan all play a role, for instance. Yet one crucial – albeit often overlooked – factor is its branding. This might be due to the fact that “branding” is intangible and hard to define. It cannot be quantified easily on a balance sheet. However, research repeatedly shows that branding is crucial to make a memorable impression on customers, to set the startup apart from its rivals and to convince people to purchase from it.
Startup investors thus have an interest in making sure that the brand of the startup in question is up to the task before it. In this article, our investment team at Bure Valley Group offers this guide to help investors evaluate startup prospects. We hope you find this content helpful. Find out more about our EIS and other investment opportunities by visiting our portfolio page here. To enquire regarding our latest projects and funding, you can reach us via:
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Branding – a brief definition
Many entrepreneurs fall into the common misconception that branding is the same as having a decent logo design. Yet branding has a much broader and deeper meaning than this:
A brand refers to the distinct look, feel, meaning and experience of a company, its products/services and team which sets it apart from alternatives on the marketplace.
Think about famous brands you know, such as Nike. Of course, one of the visual markers of this brand is its “tick-style” logo – which is very elegant, simple and memorable. However, the brand is more than just its logo. The name “Nike”, for instance, refers to the Greek goddess of Victory. The slogan “Just do it” was inspired by the famous last words of an inmate on death row in the 1970s, conveying the idea of defiance in the face of adversity. The colour scheme is black and white and uses a modified Futura Family Font, communicating values such as power, elegance and perfection. Its sponsored partnerships with athletes and other celebrities – particular in the NBA – set it apart as one of the world’s most popular sportswear and apparel brands.
As you can begin to see, a brand holds many united, complementary facets serving a common purpose – holding immense power to penetrate and consolidate market share. A startup could have a great team, business model and team behind it. Yet without a compelling brand, it will be hindered from running as hard towards its goals as it could.
How to evaluate a startup brand
So, given that branding is highly intangible (albeit powerful), how can investors evaluate their prospective startup choices? Here are some ideas:
- Ask whether the startup has a clear purpose. Simon Sinek, famous motivational speaker and author, famously said that businesses should “Start with why” when communicating their value proposition to audiences. Perceptively, he argued that many startups begin by telling people “what they do” and “how they do it”, when they should be focussing on why they do it (i.e. the core beliefs of the business). By starting with why, startups can attract customers through the power of their fundamental beliefs – possibly bringing them to the point where they are fiercely loyal and feel part of a “tribe” (e.g. Apple users).
- Does the startup have clear brand positioning? Here, the focus is on differentiation. Is there a clear strategy to distinguish the startup from rivals? One of the most common routes, of course, is to compete on price. Yet this isn’t always possible or appropriate. Fortunately, other differentiators exist such as specialising in a particular customer base (e.g. university admissions teams), or providing a product/service more quickly and easily through a unique, hard-to-replicate distribution system.
- Is there a clear brand story? People love narratives and this is a great way for startups to generate empathy and memorability from customers. One great example can be found in Ripple; a Wales-based wind energy startup which began due to its founder’s belief that people should own their own source of clean energy.
- Is there a distinct brand voice? Think of famous public speakers you may admire. What makes them attractive and memorable to you? Perhaps it’s the subjects they typically speak on, the types of words they use or their distinctive tone. Startups have the power to generate similar affection through their “brand voice” – i.e. the personality and emotion used in their communications.
- What is their visual identity like? Finally, but by no means least, it’s important to consider the visual assets of the startup’s brand such as their logo design, colour scheme, fonts, imagery, photography, website design, brochures and other marketing assets. Do these appear rushed and poorly-conceived, or is it clear that time, effort and resources have been allocated to make sure they make a good impression? Do they hold together in a cohesive manner or do they present a disjointed picture? Is the visual identity sufficiently unique, or does it simply look like many other brands you have seen on the market?
Conclusion & invitation
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