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.
Wise investors know how to evaluate a startup’s products, business model and target market. Yet how, exactly, do you judge the company brand? After all, branding is difficult to define and so is its value. Despite this, branding is hugely important as demonstrated by the power of big company brands. Apple, for instance, has a brand valued at over $322bn whilst Amazon holds at least $200bn in brand value.
The power of a brand can make all the difference between a customer choosing one company’s product(s) – e.g. your startup investment – over another. So it pays to make sure the startup you are investing in has a strong brand which can help carry them through accelerated growth. In this article, our team at Bure Valley Group offer some ideas to help investors evaluate a startup brand. 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:
+44 160 334 0827
Recognise limits of traditional methods
With a startup, you are (by nature) dealing with a company which is very new – with limited track record. This makes it difficult – even impossible – to use many of the common methods used to measure larger, more established brands. For instance, the Brand Equity approach combines 3 components: effective market share, relative price and durability. To measure the first requires establishing the sum of market shares in all segments. Yet if your startup investment is in its first year or so of trading this will, of course, be very small and naturally lead to a poor valuation. To measure the third, moreover, is difficult to establish. After all, the startup may not have properly gone to market yet – so how can you reliably judge how many customers will buy next year?
Grasp the concept of branding
So far, this may sound like we are saying it is impossible to judge a startup brand. Yet that is not the case. Evaluating a startup brand requires distinct approaches, and it’s important to start by recognising what “branding” means. Many investors assume that it refers to the company logo or colour scheme, but this is a very limited understanding of the concept. Rather, branding can be defined as a “Set of features that distinguish one organization from another …[featuring a] name, tagline, logo or symbol, design, brand voice, and more”. In short, branding is what makes your startup immediately appear memorable, attractive and different to alternatives in the eyes of the target market/audience.
With our concept of branding now more clearly in mind, what makes a great startup brand?
Appeal to a clear audience
Sometimes startups are in such a rush to get to market that they forget who they truly are, who their customers are and what they want. A great startup brand will take careful time to consider the values, desires and pain points of their target audience and craft a company brand which connects with them. This will be clearly reflected in the brand collateral including brochures, leaflets, business cards and flyers.
Innovation grounded in sound design
A startup’s logo, colour scheme and font styles should not look like that of any other company on the market. If most competitors lean towards blues and greens, for instance, could following these styles possibly harm the startup’s ability to stand out to customers (even if copying what others are doing “feels safer”)? A startup is, by nature, in a highly innovative part of its lifecycle which is highly risky – with the possibility of great rewards. That can lead some founders to lean towards traditional styles of branding, so that they appear “familiar” and “old” to the audience. Yet this approach can often backfire. Many startups do better by being innovative with the style of their branding and visual identity. Think of Brewdog, for instance, with its characteristic sharp logo design and edgy blue and black colours to convey a sense of disrupting the beer industry.
Many startups see the development of their branding as a nuisance; a process which they want to finish as soon as possible, so they can start selling. This can lead founders to not only invest in a poor overall brand design, but also one which is inconsistent. Perhaps the logo design does not fit with the choice of imagery or fonts. Maybe the brand assets on the website are not the same as those included on the startup’s social media channels, email signatures and printed marketing materials. Make sure your startup has taken time to craft a consistent brand, as this will help to reassure customers that the brand is reliable/trustworthy and makes it easier for them to remember it later. Think of McDonalds and how, across the world, the same branding is everywhere – making it immediately recognisable for travellers and international customers.
Conclusion & invitation
Interested in finding out more about the exciting startup projects we have on offer to investors here at Bure Valley Group? Get in touch today to start a conversation with our team and discuss some of the great investment memorandums we have available here:
+44 160 334 0827