The relationship between Branding and FundingBack
6 May 2022, 13:56 — 6 min read
Many investors don’t realise the tremendous importance of brand equity when it comes to funding. Branding is important in communicating the company's business model and corporate image in order to attract investors and funding.
In today’s competitive market, companies aim for increasing revenue and good funding. Companies are founded on the basis of the firm’s capabilities, like resources, organisational structure, employee skills, research and development, or a recognisable brand. A few startups present amazing success stories, but there are a lot of failures too. This is what potential funders are worried about, which brings us to your branding strategies. The right branding strategy can help you attract solid funding for your business.
What is Branding and why is it important?
Branding is the process of creating a strong and positive image of the company in the customer’s mind with its products or services. It is a marketing practice in which a company creates a name, symbol, or design which is easily identifiable by the customers. Moreover, it is important because it is a way of differentiating yourself from the competitors and serves to suggest yourself as the better choice.
Also read: 5 key ingredients for a winning brand name
The importance of Branding
Branding can help you to increase brand awareness and drive new businesses. For any company, its brand name is important because it:
- Gets recognition
- Increases brand/business value
- Generates new customers
- Defines the brand persona
- Improves employee satisfaction
- Creates trust in the marketplace
The two main purposes of brand names are:
- Identification: differentiate the product/service from the other similar brands.
- Verification: authenticate that the product/service provided is genuine.
Funding and its meaning
Funding is the act of providing resources to any private or public company. Additionally, funding is usually in the form of money. The process of seeking and gathering funds is known as fundraising. While raising funds, you must commit your core values and express those values to potential investors. If you have a strong, authentic brand identity that speaks about your core values, it’ll be easier for you to raise funds. Funding can be either for short term or long term purposes. Moreover, in the attempt to raise funds, the first and foremost step is to prepare a comprehensive business plan. This will ensure that you have researched thoroughly about the market and, this intact can ensure you raise good funding for your business.
Let us have a look at the different types of funding:
- Friends and family
- Loans and grants
- Business incubators
- Venture capital
- Business angels
The relationship between Branding and Funding
While starting a business, you must always ensure that there is sufficient capital at all times. This sometimes requires raising money and seeking fundings from investors. Further, in the attempt to attract investors and get funding, branding plays a very important role. Further, branding helps in communicating the company business model and corporate identity to the investors. Moreover, investors always look for a value proposition and return on investment as the primary factors. Investors always look for a compelling message, an awesome product or a service to invest in your business.
The most important tips for companies looking to gather funding are:
- Clarification – always clarify what you do and what your goal is to your investors. Explain to them how and in what way you are going to help your customers or users.
- Create an emotional connection – while proposing your business ideas to the investors, always emphasise the good thing that you are doing for the customers. This will attract the investors and you’ll capture their interest.
The importance of Branding in securing funding
Securing investment is very important for any business or startup to grow. The right branding can help you compete with other competitors. Additionally, good funding will serve to make your brand stand out, look more established, and gain trust from customers. Similarly, people love to do business with people and brands they can trust and respect. Likewise, Investors also invest in people because the team is important, so it’s wise to develop a long-term relationship with your investors.
There are many ways to gather funding. Some of them are:
- Direct engagement with the investors
- Pitch a return on investment
- Have co-founders
- Put together a great leadership team
- Create a detailed plan and strategy on spending on funds
- Press appearances that are noticed by the investors
- Being present in forums to establish the position of a thought leader.
If you have a strong brand identity, you’ll be one step closer to raising funds for your business or startup. Branding can help your startup appear as a serious challenger to established businesses. Hence, it can help you raise the funds you need to succeed.
Also read: Trademark your brand to safeguard your brand
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Posted byVakilsearch Staff
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