Does a CEO’s presence on social media impact their ability to fundraise?
Today we launch the second in our series of research papers focused on demonstrating a return on investment in PR and communications. This report is entitled “Coverage to Capital – Unicorn Edition” and for this report we worked with leading global research business CARMA to study the UK’s “unicorn” businesses. For this report, we define “unicorns” as privately held companies with a valuation of above $1bn, and we looked at the impact that their CEO or founder could have on fundraising efforts by having a large personal media profile across social and earned media.
The prevailing wisdom is that the CEO or founder has a key role in “storytelling” for the business. Successful founders are those that can paint a picture of the future for investors and customers alike, and secure investment with a valuation that is, in part, based on their business’s ability to “drag the future forward” in the words of Professor Scott Galloway. We wanted to test this theory and see if we could apply some hard numbers to it.
The findings in this report confirm this belief. Technology start-up unicorn businesses in the UK who have CEOs or founders who are active in the media were more financially successful in their investment rounds, than those who were not.
Within this report we looked at 64 startup unicorns in the UK and with the help of CARMA we analysed 65,194 media articles, over 10,000 LinkedIn and Twitter posts to offer a comprehensive study of the media profile of these businesses and their founders.
Our report reveals that unicorn companies whose founders have the largest number of LinkedIn followers secured over £763 million in total investment on average. This is over 20% more than the average total raised – £632 million – across the UK’s entire unicorn cohort.
The same trend was true on Twitter albeit resulting in a smaller difference of 5.4% – with the most-followed CEOs raising an average of £666 million in funding in total.
Post frequency on the real-time platform also correlated with fundraising success. Of those CEOs who use Twitter, the top five most active accounts raised more money in comparison to the rest – with an average of over £705m raised versus £534m raised by the remainder.
LinkedIn is the social media platform of choice for startup leaders. Just 6% of CEOs and founders at UK unicorns don’t use the business networking site, compared to 42% who don’t use Twitter.
On LinkedIn, the top five ‘most social’ unicorn CEOs were: 1. Ben Francis, Gymshark (367.5k followers / 94 posts), 2. James Watt, BrewDog (331.2k followers / 83 posts), 3. Timo Boldt, Gousto (25.1k followers / 62 posts), 4. Yoni Assia, eToro (23k followers / 53 posts) and 5. Orral Nadjari, British Volt (8.8k followers / 51 posts).
By comparison, the top five ‘most social’ CEOs on Twitter were: 1. Herman Narula, Improbable (10.1k followers / 97 posts), 2. Yoni Assia, eTorro (46.9k followers / 53 posts), 3. Dr Gordon Sanghera, Oxford Nanopore Technologies (2.2k followers / 49 posts), 4. Greg Jackson, Octopus Energy (17.2k followers / 35 posts) and 5. James Watt, Brewdog (99.1k followers / 33 posts).
The research also looked at the impact of earned media coverage on unicorns’ fundraising efforts. It found that businesses that secured the largest sums of investment also had the most active CEOs and founders in terms of their presence within media coverage of their businesses.
The leaders of top tier unicorns – which raised an average of £1.4 billion – were featured in 23% of their company’s press coverage on average, compared with just 13% of leaders at mid-tier unicorns – which raised an average of £350.9 million – and only 14% of low tier unicorns – which raised an average of £130.8 million.
When looking specifically at CEO and founder profiles, 15 out of the top 20 were the most visible within earned media and worked at the companies with the highest overall media presence.
The top five unicorn leaders with the largest earned media profile were: 1. John Lyttle, Boohoo (718 mentions / £59M raised), 2. Greg Jackson, Octopus Energy (683 mentions / £2.1BN raised), 3. James Watt, BrewDog (535 mentions / £296.7M raised), 4. Alex Chasterman OBE, Cazoo (339 mentions / 241.9M raised) and 5. Anne Boden (335 mentions / 905.6M raised).
This tells us that investors want to align themselves with leaders that have a clear and compelling story to tell. And when the story resonates, investor buy-in is more likely.
We’re delighted to have worked with CARMA, a leading global media intelligence business, to produce this report, looking at the impact the media coverage has on funding raising. Richard Bagnall and the team from CARMA yet again proved themselves to be first-rate partners throughout this research
And we’re grateful to the amazing communicators of unicorn businesses who kindly gave us their time and perspective on the results – Nikki Dawson, head of EMEA marketing at sales enablement platform Highspot; Bhavni Meintjies, Director and leader of the “Buzz team” at cloud banking SaaS pioneer Mambu; Roopa Ramaiya, VP of Communications at RiskOps platform Feedzai.
If you only read one section of this report, read the brilliant case studies from Mambu, Highspot and Feedzai, as they offer a marketing and communications master class for high growth businesses.
We are excited by this research project because we know that these findings can help inform tech start-ups at every level of their fundraising journey. Whether they are at seed round stage or at a later fundraising round, this research hopefully provides useful data points to justify the expenditure of time, effort, and budget into communications for CEOs and founders, and the executives and consultancies that advise them.
We continue to believe that if a business has some hard numbers to achieve, it pays to invest in professional PR and communications, and that again this report proves this.
Read more about our research and download the report here.
