A growing group of venture capitalists are taking social media into consideration before they decide to pour millions of dollars into a startup. They’re checking how many online followers a company has, and how fast the numbers are growing. They’re looking at the unfiltered consumer feedback companies get and how they respond. And they’re assessing how creative startups are about managing marketing campaigns and leveraging their presence.
An impressive social-media effort, investors say, can show that a brand has a unique and appealing voice—and that it knows how to grab customers. And it can be the tipping point in the decision to back a startup.
What do the views of venture capitalists have to do with a law firm’s use of social? Of course in-house counsel are not looking for a horse to back as an investment. Nor are they likely looking at how well a law firm can market itself via social media.
But corporate clients do look at how innovative their law firm is. They also take into account the culture of the firm and its lawyers.
How easy is it to network and develop relationships with the firm’s lawyers in a real and meaningful way? Is the firm looking to the future more than the past? How networked are the firms lawyers with thought leaders in their area of law and the industries they represent?
When looking at law firms to represent you on technology deals, emerging growth company matters, and early stage investments, the ability to network with leaders in these areas via social media matters. How would a law firm and its lawyers look to members of these communities if they didn’t use social media effectively? It’s a law firm’s network and ability to gain access which gets deals done.
Venture capitalists are not in-house counsel, but their views on social media are telling.
From Ted Leonsis (@TedLeonsis), a partner at venture-capital firm Revolution LLC and chairman of the board at Groupon Inc,
Ten years from now, social media will be the starting point of any investment. I have found it to be very helpful and meaningful.
Sergio Monsalve (@VCSerge), a partner at $3.7 billion venture-capital fund Norwest Venture Partners in Palo Alto, Calif., told Hong he browses social-media sites daily, as they play a big role in helping him discover and communicate with business partners.
It’s very important that startups are using social media and are active in it. That will allow us investors to quickly figure out who they are and how they talk to customers.
Is it far fetched to think in-house counsel consider a law firm’s social media presence when hiring a law firm as venture capitalists do in regard to possible investments?
Not when you look at Greentarget’s study which found the majority of in-house counsel are influenced by blogs when hiring. And that a growing number of in-house counsel see a lawyer’s use of Twitter as a measure of staying abreast of legal and industry developments.
Maybe venture capitalists are ahead of corporate clients in looking at the importance of social media, maybe not. But if betting on the likes of Twitter when most of us thought Twitter a joke is any guide, venture capitalists have their finger on what’s coming.
Social media, to them, and many others, is a measure of a company’s innovativeness, and more importantly a company’s ability to get the important things done via this new means of communication and networking.