The venture capital sector is an industry that must remain extremely vigilant and implement the best and most advanced techniques at its disposal, such as growth hacking. How can growth hacking be applied to the venture capital industry? Can growth hacking be adapted to the particularities of venture capital and private equity? By all means, read on to see how you can benefit from it.

Growth hacking focuses on testing different strategies to demonstrate which is the most effective. In an industry focused on maximising return on investment, this is vital in order to spend as little as possible before knowing for sure that it will deliver growth.

If we want to apply this methodology to a Venture Capital and Private Equity company, the first step is to establish the key metrics - those that indicate whether or not our company is growing and by how much. In this sector the most important metrics will be, average annual profitability, number of investors, total capital invested, new annual investors....

With these metrics in mind we should set SMART objectives (specific, measurable, achievable, relevant and time-bound) focused on improving these metrics. Increasing the number of new monthly investors by 30% in half a year, increasing annual profitability by 2% in one year or increasing the total volume invested by 5% could be SMART objectives. 

To achieve these goals we will need growth drivers. These drivers may or may not work, so it is essential to conduct experiments to validate or discard them.

Possible growth drivers for the investment sector could be increasing brand awareness, digital marketing, becoming an industry leader or user confidence. 

Which one is best for us, and which should we focus on? This is what we are going to test through the growth hacking methodology.

A big advantage of using digital marketing for venture capital is that it increases brand awareness. The venture capital industry is becoming increasingly competitive, especially as investors carve out their own space and more micro VC firms emerge.  To stay relevant, people need to know who you are and what your brand is. 

Digital marketing can give a venture capital firm´s brand a big boost. It will get the firm´s name and message in front of the right people in the right companies, which can lead to interesting partnerships. 

One of the reasons why small start-ups seek out venture capital firms is that they want to be mentored by experienced investors and business partners.

• What trends are emerging?

• What will the market look like in five years?

• Where can they enter the market and grow? 

Using digital marketing can help a VC firm establish itself as a leader in the VC industry, especially if the marketing team focuses on social media content creation.  This is an essential step in establishing trust with your target audience and giving your firm a specific weighting. 

Many companies believe they are building a comprehensive digital marketing strategy, but they may be missing an important pillar in their plan. A comprehensive digital marketing strategy should include the following elements: content marketing, social media marketing, search engine optimisation (SEO), email marketing and video marketing. 

There are many parts to a comprehensive digital marketing strategy, but these organic tactics are some of the most important to get your name in front of the right people at interesting companies with great potential. 

After each experiment we should record the results obtained with the utmost detail and accuracy. This will allow us to generate a library of learnings in which we can consult which strategies are effective and which are not.

Want to know more about how to apply growth hacking to your venture capital business? Sign up to Hypertry and request a one-to-one session.