What is Venture Marketing?
5 MIN READ
At its simplest, this model is the practice of marketing that is paid for, partially or in full, based on results.
Venture Marketing operates on the same rules underpinning Venture Capital:
The agency will invest time – In agency world, time equals money. Venture marketeers invest in clients they believe have potential for accelerated results
Testing is baked into the program – A “test, fail, learn” approach allows new marketing initiatives to fail fast, quickly learning and pivoting to growth formulae
Creative and content are king – The quality of the work must be best-in-class to change what people think, feel, and do.
Not every business is best fitted for venture marketing. The commitment is long-term and based on trust. It requires a minimum commitment of resources, stakeholder engagement, and a tech stack that allows marketing performance to be monitored daily.
The agency will flex their time between brand, awareness, engagement, conversion, and sales enablement to maximize ROI. The key to this is TRUST.
Venture marketing simply doesn’t work if resources are not used in the most effective way to move the dial of marketing performance.
Venture Marketing for High Growth Businesses
Prioritizing Areas of Marketing
Dealing with Competition
How Does Venture Marketing Work?
We can’t tell you if, or how, anyone else does venture marketing. But here’s how it works at BH&P:
We work together on a mini review to establish what is currently invested in marketing, what this is achieving, and what your top-line goals are. You share your last three years’ revenue figures – either for the whole business, or a function where you want to test venture marketing.
We then customize a model for your business to calculate the level of investment typically needed to achieve business goals.
The model we build for you will include a number of elements:
1. A 100-day plan – This focuses on the most important elements for your business (not everyone needs every part). This includes everything from Vision Orbit and Vital Few, to Brand Key, Platform Audit, Competitor Review and GTM Plan – even a new website and CRM.
2. Different revenue share models – Depending on your revenue and growth trajectory, we forfeit between 10%-80% of agency fees in return for a percentage of revenue. Your success is our success. This model is agreed in principle, but not implemented until the 100-Day Plan is complete.
3. Match-Fit Assessment - At the end of the 100-Day Plan, you have three choices. Agree on a venture marketing arrangement; agree to pay the agency in the normal way (some clients decide to do this as costs are more predictable, confident that it will lead to success); or choose to walk away with the 100-day plan, ready to build your own team to drive the business to the next level.
The choice is yours.
Venture Marketing vs.
|A venture capitalist (VC) is an investor who supports a young company in the process of expanding or provides capital needed for a start-up venture.||A venture marketer (VM) is an agency that supports a young company in the process of expanding, especially after investment rounds or when the business has hit a brick wall in their growth.|
Venture capitalists invest in companies because the potential return on investment (ROI) can be significant if the company is successful.
|Venture marketing agencies invest time in companies because the potential return on investment (ROI) can be significant if the company is successful.|
|A venture capitalist will invest in many growing businesses, spreading the risk to maximize the return.||A venture marketing agency will test a wide range of channels, messages and techniques, spreading the risk, to find the growth formula for each client.|
What separates venture capitalists from other equity investors is that venture capitalists often deploy third-party assets to improve the efficacy of a young company with a high upside.
|What separates venture marketers from other agencies is they invest time over an extended period in carefully selected clients that meet their rigorous criteria, with a high upside for both parties.|
Venture capital faces competition from other capital-raising methods, like crowdfunding.
|Whilst other payment-on-performance models have existed for some time, venture marketing is the only agency model based on investing time in return for revenue share.|
How Venture Marketing Can Help Your Business
Venture marketing is a game-changer for growing businesses.
By embracing a “test, fail, learn” methodology, every failure brings you closer to your goals. An early failure is brilliant – you know EXACTLY what not to do and can move forward with alacrity.
When you embrace creative and content, it is revolutionary. Great creative work changes hearts and minds. It’s simply not something that you can invent in house. It doesn’t work. With BH&P’s award-winning creative director, Claus Larsen, you get the creative talent that has worked with, and for, world-beating agencies and brands – but within a small agency that cares deeply about doing work that makes a difference.
Combined with a revenue-share model, the risk of investing in these simply vanishes.
An outdated model based on fixed hourly rates and media commission, requires an investment of between 10% and 25% of revenue in marketing. For a business growing based on the strength of the product, people, and founder, that can be a big pill to swallow, with a serious impact on your cash position.
Venture marketing changes all this.