How Blog Posts Influence Venture Capitalists

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How much is a blog post worth? If you’re an early-stage tech startup looking for venture capital, it could be worth a lot, or at least something, according to a new study published in the journal Information Systems Research.

A recent study sought to measure what impact “electronic word-of-mouth,” specifically blog coverage, had on the amount of venture capital raised by entrepreneurs. And they found that startups that appear on popular blogs saw an increase in the amount of money they were able to raise. The study argues that an increase of 100 percent in coverage of a startup on popular blogs (and the details get complicated here depending on which variables you include) can have anywhere from 3 percent to 5.6 percent increase in money raised and 7.95 percent to 15.9 percent increase in valuation, based on one of the models.

But an increase in the number of blog posts doesn’t necessarily mean more money if investors don’t like your idea. Venture Capitalists consider popular blogs coverage as a substitute of referrals and use this information to screen ventures for the due-diligence process, according to the study

Read the full story on St. Louis Business Journal.

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