Venture-backed startups that are eager to achieve swift, sure growth should not ignore the power of foreign demand. With nothing but a relatively modest translation budget, it is possible to unlock markets with millions of new potential customers.
Venture Capital (VC) is a form of private equity financing that targets young up-and-coming businesses (or startups) that are expected to grow substantially in the coming years. Not every startup seeks venture capital financing, but those that do generally aim to become market powerhouses once they reach maturity. Professional translation and localization services offer an efficient way for startups to work toward this goal regardless of industry or niche.
Before any venture capital investments are made, analysts are called upon to produce a valuation for the startup that determines what the business is worth at this stage in its development. Some of the key factors this figure takes into account include:
Investors can then use this figure and any other information they have to determine whether or not they wish to fund that startup. If they choose to commit, they will provide the startup with an agreed-upon amount of funding in exchange for equity. This percentage is typically set at 20%, but it can be more or less depending on the specific agreement that was made.
Tech companies secured well over half of the $136.5 billion total venture capital investments in 2019. 2021 is expected to follow a similar pattern.
Pitchbook predicts that the leading sectors for venture capital investment for the upcoming year will include:
“[T]echnology that is helping us accelerate into a digital economy is what many investors are looking at now. What is exciting is that entrepreneurs are innovating at a much faster rate than ever before. In the last decade we use to innovate every two years, today some innovation has been pushed to less than three months.“
- Dharmesh Thakker, general partner at Battery Ventures
Securing venture capital funding is a long-term process that requires startups to continuously meet their growth goals or risk losing current and future investment opportunities. These young companies must pursue high-ROI strategies to make the most of the venture capital funding they accrue. Proving that they can leverage their funds effectively is the surest way to convince more investors to strike deals with them and ensure their future viability.
The translation of a product, website, or marketing is a cost-effective way for a start-up to reach a wider range of potential international customers.
With such an important role to play in both good times and bad, it is no surprise that translation and localization services remain a top priority for many growing businesses.
Venture capital funding may be high, but it is not unlimited. Startups who wish to achieve greater market penetration cannot afford to do so without translating their content.
Fortune 500 companies that increased their translation budgets were 1.5 times more likely to report an increase in revenue than other companies that did not.
A company hoping to expand out of the English-speaking market should translate into a few other languages to attract international customers and increase the ROI of the VC dollars.