In this era of mega venture rounds — think SoftBank feeding $535M to DoorDash to make sure you can receive that dish of soft-serve yogurt without ever leaving your lazy boy chair — one can become cavalier about a startup securing a measly $100M in venture funding. Fortune even wrote a story in August called “Why Raising More than $100 Million in Funding Is Not a Big Deal Anymore.”
Still, I figured this psychology describes the guys with the sacks of the money, not the journalists covering what happens to the sacks of the money.
Why does this matter?
For the communication consultancies like us who support startup clients, securing venture funding IS a big deal. The fact that supposedly smart people conducted due diligence and decided to invest represents a form of a validation. Naturally, a startup wants the media to cover the news, an early step, if not the first step in building its public profile.
Which brings us to the question at hand and a startup in the self-driving car space called Roadstar.ai. The company announced that it had secured $128M in venture funding in a news release distributed by PR Newswire.
By now you’re probably sensing the punch line.
A grand total of zero publications in the U.S. (The South China Morning Post in Hong Kong covered the announcement) wrote about the breaking news. Even TechCrunch, the stenographer of startup mania, took a pass on the story. Yet, a quick glance at TechCrunch on Oct. 30 at 3:42 p.m. shows a startup feed with ZypMedia securing $5.6M for an online advertising play, Aura nabbing $2.7M for wellness and Freebird raising a cool $8M for a travel rebooking service.
I’m not disparaging these three startups, but I don’t see how anyone could make a sane argument that they were more deserving of column inches in TechCrunch than a startup making technology for autonomous cars that landed $100 million and change.
So why did TechCrunch and all the other publications that cover the startup scene not write about the Roadstar.ai funding announcement?
It’s possible that journalists didn’t recognize the names of the venture capitalists who invested in Roadstar.ai — in contrast to Freebird that highlighted American Express as an investor. I suppose it’s also possible that journalists automatically assumed the news wasn’t relevant to the U.S. because Roadstar.ai comes from China.
Here’s my theory.
The number of news releases that bombard journalists on a daily (hourly?) basis has reached the point where they simply can’t filter the good stuff from garbage. They would never admit to what I’m about to say, but a communications consultancy cajoling the journalist to write about a startup’s funding supplements the journalist’s filter, keeps the announcement out of the garbage bin — for the time being — and ensures that the announcement gets a “listen.”
That’s why journalists missed the Roadstar.ai announcement. The company distributed the news release over a wire service without the supporting PR muscle. Wire distribution by itself doesn’t guarantee a “listen.” Channeling my college Philosophy 101 class, if a news release falls in a forest and no one is around to hear it, does it make a sound?
PR ensures a startup’s story does make a sound around journalists and other influencers.