Fund deployment at later stages, especially for consumer-focussed startups is proving to be even slower than at the seed stage, creating a precarious financial climate for founders. MFG’s analysis of financial data from 30 publicly traded consumer technology and enterprise SaaS companies reveals that the average spend on sales and marketing, as a percentage of revenue, stood at roughly 36%. As a result, companies are looking to optimise costs, and marketing budgets often bear the brunt of cutbacks.

But the real cost could lie in failing to invest in brand-building during a market downturn

As the recent analysis conducted by marketing consultant Peter Field for LinkedIn’s B2B Institute show, in recessions, businesses with higher Excess Share of Voice (ESOV) experienced future market share growth far surpassing that of businesses with low or no ESOV. This is also backed by data from the 2001 financial crash, demonstrating that businesses that increased marketing spend as a proportion of market size reported higher market share growth in the first two years of recovery than those cutting or maintaining budgets (IPA study).

So what alternatives do founders of growth-stage companies have?

Media capital, also referred to as "media for equity", presents a viable option. This “recession-proof” venture model enables growth-stage startups to exchange equity for mass market exposure, advertising space, and marketing expertise with media companies. The recent State of Media for Growth report by MFG shows over 1000 companies have raised media capital, including household names such as Zalando, Airbnb, Uber, Coursera, About You, and Glovo, among others.

Zalando is a great example of a digital brand that benefited from media capital. Following the company’s first media capital round raised from SevenVentures in 2009, their annual sales skyrocketed from $6 million to $1.8 billion sales by 2013 (source: State of Media for Growth report, 2022)

Despite considerable growth over the last decade and increased engagement from media companies, many founders remain unfamiliar with media capital as a funding option.
Those who have successfully raised media capital domestically often find replicating the process in international markets challenging, due to varying investor types, deal structures, media regulations, and media rates, says Diana Florescu, CEO at mediaforgrowth (MFG).

To address these challenges and streamline founders' fundraising process, MFG launched the Media Capital Investment Readiness Programme which currently accepts applications for its first cohort starting in October 2023. 

This free-to-apply, four-week hybrid programme connects growth-stage UK and European founders with media capital investors, amplifying their reach, boosting revenue, and extending their operational runway.
Run by MFG and partners ITV AdVentures, JCDecaux, German Media Pool, dmg Ventures (Daily Mail Group), UKTV Ventures (part of BBC Studios), RTL AdAlliance, Thinkbox, and The Outfit, the programme aims to equip founders with the tools, knowledge, and investor connections necessary to effectively raise their first media capital round and leverage media power for business growth.

The MFG Investment Readiness programme is tailored to late-Seed to Series B founders in the UK and Europe, with growing marketing expenditures, and are seeking funding in the next 6-9 months to scale their brand in the UK.

Over two days across four weeks, founders will delve into key areas of the media capital fundraising process, receiving one-on-one support to fine-tune their marketing, branding strategies, and investor propositions. The programme culminates with an Investors and Startups Networking event in London during the first week of November 2023.

Applications for the Autumn 2023 Cohort will be opening soon. Founders can register their interest at www.mediaforgrowth.co/investment-ready.