Tag Archive for: venture capital

Navigating the Pre-IPO: Strategies for Effective PR Engagement

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An IPO is arguably the most important phase in a company’s history. Befitting its importance, preparing for an IPO should happen years in advance, especially from a reputational point of view. The last thing you want to do is wait until three months before your quiet period to improve brand awareness and credibility. Keep in mind that few IPOs make national news, so to support your IPO, you’ll want to have an established reputation. And if the company hasn’t engaged in PR yet, then it’s especially important that you plan a solid runway. Consider these three pre-IPO strategies for effective PR.

 

Plan Pre-IPO PR in Advance

To truly maximize your opportunities, plan the pre-IPO phase at least a year in advance.  Once in a while, I hear people say they don’t want to start PR too early, but the reason that’s short-sighted is that you can never improve your brand reputation too much. Being present in the press may bring other advantages, but certainly, a storied history helps with IPO. It gives journalists and analysts the confidence of validation.

It’s impossible to truly control the timing of earned media coverage. What a PR firm with IPO experience will do is proactively recommend ways for you to create news that matters for customers and/or potential investors. To maximize pre-IPO strategies for effective PR engagement, think of everything through a PR and newsworthy lens in advance.

Where Will You Be?

Pre-IPO strategies for effective PR engagement may also require activations. Sponsorships, partnerships, or conference placements may be important from a branding standpoint. Finalizing these can take up to a year. Plus, you will want to plan activations ahead of these opportunities and tie them back to press opportunities. Conferences and tradeshows are often journalist hotbeds, so the planning behind this is critical. What will be the storylines and news items, and how will they be worthy of coverage? Also be thinking about the ramp up to these conferences, how will they tie into your business calendar. Are there products you can announce at a major conference? Is there a key message that should you underscored for a future announcement? What needs to happen to a booth or collateral to support this message?

What’s the Earned/Paid/Owned Content Mix?

The media cycle is like a train: we’re not in control of it, but we can buy a ticket to ride. What you CAN control is your own content. There is a plethora of paid and owned options available to a pre-IPO company. Developing an editorial calendar, and sticking with it, is perhaps one of the most powerful things you can do to empower your message, and build your reputation. Here again, timing is critical, and planning is essential.

Investor Relations and Pre-IPO PR: Separate But Collaborate

Investor relations and pre-IPO PR are not the same. Investor relations are essentially PR for a single target market: bankers and active investors. It’s a very specific type of PR. Some PR agencies handle investor PR, sometimes your banker will want you to work with a specific investor relations firm. Truthfully, it’s my opinion they should be separate but collaborative. The reason for the separation is there could be slightly different messaging priorities from mass media vs. investor media, and while they can and should be synced up, they shouldn’t get in one another’s way.

An example of what happens when PR and IR don’t work together: we once worked with a company whose IR was pretty free-wheeling. Now, understand, it’s not the pre-IPO PR strategies can’t be fun, but an executive PR professional will look at everything through a trust lens and a larger reputational impact for journalists along with other stakeholders. Back to our story, the IR firm issued a press release, the company approved it, but it used very creative language to hide the details of an announcement. The language was so opaque, a journalist at Fortune declared, “I will never trust anything from their PR firm again.” Well. That changes things, doesn’t it? When we saw the press release as it was published, we immediately started asking questions, but the damage was done. I am confident we could have helped them thread the needle in a more trusting way and one that wouldn’t permanently damage their reputation with a journalist.

Unlike the general public, and maybe even some investors, journalists tend to have very long memories. Once a journalist has black-balled a company, they will carry that with them to every outlet they publish at – and in today’s world, where many journalists work for multiple outlets, that damage can be extensive.

Pre-IPO Thought Leadership

Frequently, if your company is IPOing and they aren’t already a household name, and the CEO is unknown, a solid pre-IPO PR strategy is thought leadership. After all, the investor needs to trust the CEO. The ROI of CEO branding is evident in hugely successful IPOs like Spanx’s Sara Blakely, Steve Jobs and Marc Benioff of Salesforce. How much would you spend to have a billion-dollar IPO?

Really digging deep into a thought leadership point of view can instill confidence from an investor and general public perspective. But it’s not as easy as putting the CEO on CNBC. A prepared and strategic thought leadership approach is absolutely required for pre-IPO thought leadership. Does the CEO and/or spokespersons need intensive media training? What will be the point of view, and what will it take to get your point of view placed?

Pre-IPO Crisis Planning

There’s nothing like a PR crisis to throw off an IPO timeline. If you haven’t already, now is the time to prepare for one. The first 24 hours of a crisis are the most critical, and if you’re prepared, the outcomes are dramatically improved. Whenever you see a CEO stumble during a crisis, that’s because there wasn’t a crisis plan for that type of situation. That’s the importance of preparedness. Think of crisis PR planning like an insurance policy.

Pre-IPO strategies for effective PR engagement take time. It’s never too early to prepare for an IPO. Creating brand awareness has a multiplier effect throughout the entirety of the company’s existence. The more solid your brand, the more it’s worth to both customers and would-be investors.

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Securing Capital Through Investor Confidence

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While the wild days of 2021 are firmly behind us, investors are starting to get back in the saddle, and there are positive signals for 2024, including fintech and other emerging tech like AI. Because there isn’t as much money in the pool, attracting investors is more competitive for any B2B company. It’s more important than ever that companies raising money stand out from the pack. At the risk of oversimplifying raising capital, one of the easiest things you can do to attract investors is to invest in confidence. Confidence assumes you have already done the hard work behind the scenes – you have a viable product, you’ve shown market interest, and you have a solid team or at least solid advisors. But those things are the baseline accomplishments for raising capital. The reality is, that thousands of legitimately great ideas never receive funding. The way to raise more money faster is by going above and beyond and creating trust and enthusiasm for the company, the product, and its leaders. Capital and trust are the two most important assets to fast-growing companies, but without trust, it’s incredibly hard to secure capital. Our PR experts call this securing capital through investor confidence, and it’s critical for startups raising venture capital or series A+ rounds.

  1. Compelling Value Proposition: Of course, first, you need a value proposition, and then you need to articulate your company’s value proposition clearly. Investors want to understand why your solution is unique, how it solves a problem in the market, and what sets it apart from competitors, and this needs to be elegantly and enthusiastically defined. Words matter. How you articulate your vision externally to investors will almost certainly be different from the way it was articulated to the product builders. It’s really common for brilliant product and tech founders to struggle with this reality. While founders are often brilliant specialists in their own right, sometimes communicating differentiators or positioning for investment requires some shifting of external communication. This is often the stage where a startup would hire a branding or PR firm specializing in tech.
  2. Demonstrate Traction: Showcase evidence of market traction, such as customer testimonials, case studies, or successful pilot programs. It’s surprising how many fantastic startups have traction, but you wouldn’t know it based on their website. Creating owned content is the foundation of earning trust for those new to your company, even (maybe especially) if it is in a fast-growing tech segment like healthtech, greentech or femtech. This helps build confidence in your company’s ability to generate demand and satisfy customer needs. If you aren’t demonstrating traction and customer confidence, it’s hard to secure capital and without capital, it’s tough to get to an IPO.
  3. Financial Transparency:Provide transparent and well-organized financial information. Investors want to see realistic financial projections, a clear understanding of your revenue model, and a breakdown of how you plan to use the funds. Be prepared to talk about financials in a transparent, but appropriate way outside investor conversations. While conservative advice typically does not discuss finances, you must find a way to inspire confidence about your finances.
  4. Strong Leadership Team:Highlight the experience and expertise of your leadership team. This is one of the key reasons ambitious companies frequently engage in thought leadership for CEOs. Investors often invest in the people behind the business, so emphasize the skills and track record of your team in driving successful ventures. Having a strong point of view adds confidence and enthusiasm, and that’s important for investors who want a charismatic CEO who can take the company through IPO. Using thought leadership to paint a picture of the future is also a powerful way to underscore the importance of your product.
  5. Risk Mitigation Strategies:
    Identify and address potential risks associated with your business. Investors appreciate a well-thought-out risk mitigation strategy that demonstrates your awareness of challenges and your ability to navigate them effectively. Certainly there are a multitude of risks to consider, but one that’s frequently overlooked is a crisis communication plan clearly in place and articulated. What would happen if you were hacked and customer data was leaked? What would happen if one of your key executives was recorded off-mic with awkward or offensive statements? What happens if your product fails to work to the detriment of someone’s life or limb? Once your company has multiple stakeholders, there’s no going back – your company has inherent value and risks that you need to protect.
  6. Engage in Networking:
    Attend industry conferences, networking events, and pitch competitions to connect with potential investors. Building relationships within the investment community can lead to introductions and opportunities. Have clearly outlined goals in mind for conferences – who will you connect with and where? What media will be present, and will you be meeting with them? An experienced PR firm can help you create a strategic plan for your time at industry conferences.
  7. Update and Communicate Regularly:
    Keep existing and potential investors informed about your company’s progress. Regular updates, newsletters, and periodic meetings help maintain investor confidence and interest in your business. This is one of those things that seems to get lost in the extreme conditions of a fast-moving and ambitious company, but it does matter, and it’s an easy way to stand out from the crowd.
  8. Social Proof:
    • Leverage social proof, such as partnerships with reputable companies, endorsements from industry experts, or recognition from relevant awards and media coverage.  Few things are more lackluster than looking up a company on Crunchbase and seeing activity. Third-party validations are essential for ambitious B2B companies because they’re a visible and lasting way to create trust. Awards are not something that can ever be taken away from you.
  9. Pitch Effectively:
    • Develop a compelling and concise pitch that highlights key aspects of your business. Practice delivering it confidently, emphasizing how your B2B company addresses market needs and creates value. As CEO, it’s important for you to articulate your message with enthusiasm and confidence. Find a PR firm who can help you develop messaging for investors.

 

Securing capital through investor confidence and trust is the best way to grow a company. Trust is like a bank account. You want to contribute it to regularly and let it grow until you need to make a withdrawal. Pitching investors isn’t a withdrawal, it’s more like showing your statement and that in turn creates more confidence. Capital and trust are the two most important assets to fast-growing companies, but without trust, securing capital is harder than it has to be. Invest in trust, and let capital invest in you. No matter what stage of pre-IPO you’re in, trust is your most important asset, and PR is the way companies earn trust with the marketplace and investors.

 

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3 Things Startups Focus On as VC Funding Shifts

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As uncertainty rises, funding falls. At least that’s what the news would have you believe. But according to Inc. magazine, seed and angel deals are still trending upward, and early-stage companies with proven product are still getting most of the deals. In fact, 64% of venture funding is early stage, and seed deals through Q2 of 2022 were on par with the entirety of 2019 (Q2 NVCA/PitchBook). That means for hyper-growth or ambitious companies and challenger brands, there is still an opportunity for you. So what should you do when VC funding is down and inflation is still driving uncertainty? I’ve been through every recession since 9/11 and I’ve been working with ambitious brands and companies since then as well. So I’ve seen what successful businesses do during recessions to position themselves for competitive advantage, survival and growth, despite the economic hurdles. Over the years I’ve noticed, startups who focus on looking ahead while being laser-focused, and tend to survive tumultuous times, regardless of whether your a consumer brand or a B2B company. These are the the things startups focus on for VC Funding.

Focus Your Energies and Budget

“Everything you do, do exceptionally well, and if you aren’t exceptional at it, then get rid of it or outsource it.”

Look at everything you’re doing and cut out the things you aren’t doing well. For example, let’s say your internal biz development team is excellent, but your event marketing isn’t producing the results you’d hoped for, take that event marketing budget and focus it on one thing your biz dev team says they need to get to the next level.

Everything you do, do exceptionally well, and if you aren’t exceptional at it, then get rid of it or outsource it. Outsourcing is just more nimble. What you outsource, be exceptionally clear about your goals, so you can maximize your reduced budget. Focusing your time and budget has the additional advantage of clearing out the cobwebs and giving you new insight into operational efficiencies too. Who knows? You might decide that outsourcing certain strategies, like PR, simply works better than doing it in-house, anyway.

Startups should also focus on the long term. Think about ways you can increase efficiencies with agency partners, and where you can maximize the partners you have on board.

 

Bullish on the Future

“Deals are still happening, but they’re more happening on industries and trends which are moving ahead full steam, no matter what happens to the economy,”

What should a startup focus on when thinking about funding? No matter what happens to the economy, innovation rolls forward, and VCs know this. The money isn’t on solving today’s problems, it’s on solving tomorrow’s problems. According to Pitchbook, in Q1 of 2022, VC’s raised more money than in the entirety of 2019. So are coming down? Oh, absolutely, but VC’s know – the future is now.

Even when funding is down, deals are still happening, but they’re more happening on industries and trends which are moving ahead full steam. So do your homework on where your product fits into the biggest challenges or opportunities in the next 5, 10, 15 years. Look at all the challenges the pandemic brought to light – those challenges are still top of mind, and the companies solving those problems will have a head start. Your corporate storytelling should also lean into the future and purpose driven initiatives. These two aspects will allow you to lead against your peers.

FinTech is another area where the gloom and doom may be over-reported – through Q2, FinTech funding was still more than in 2019, but it’s definitely not as frothy as 2021. FinTech founders may wish to focus on thought leadership and tie it into purpose-driven points of view in order to tap into future trends.

And although the cannabis industry has been experiencing its share of disruptions as of late, no one thinks that industry is disappearing, the growth is only projected to increase as more states move to legalize cannabis, and states create interstate sales as California has, and many expect the east coast to do. Experts predict the cannabis industry will be $100 billion by the end of the decade. You can learn a lot about the future of cannabis by reviewing the pitch decks from startups that recently secured funding.

CleanTech is another area of hypergrowth, spurred in part by the Inflation Reduction Act which incentivizes green technology businesses. Experts predict growth in this segment for years to come. But VCs have been burned in this area, so it’s vital that companies raising funds in this segment double down on trust.

PR for AI companies is another area likely to continue growing. While the initial buzz that spiked with the launch of ChatGPT has settled, investors still haven’t settled on the market leaders in this segment. If you’re an AI company, PR is best asset right now, especially if you’re a B2B AI company.

There are always areas of growing investments, and if you’re in one of them, strike while the iron is hot.

Plan For Success

“Companies that survive this time focus… on problem-solving,”

Now is the time to think out loud and do your due diligence for tomorrow. Companies that survive this time focus their operations team on problem-solving. For example, if  VC funding doesn’t seem likely for you right now, turn your attention to policy initiatives at the federal and local levels. For example, the last infrastructure project had a lot of opportunities for climate-related startups. And the 2021 infrastructure package held lots of tidbits for infrastructure tech programs, that emerging industries like drones and UOV could take advantage of.

Consumer tech VC funding has taken a sharp nose-dive. Storytelling PR campaigns may not be as attractive as they once were for consumer tech. Now is the time to look at product-based programs which increase awareness but not the budget.

Mental health is still top of mind; that’s part of the reason emerging industries like healthtech, cannabis, and psychedelic treatments remain in the sights of investors. But these industries are not without their challenges and competitors. So brands in these emerging industries need to double down on trust to build more acceptance for the communities they serve.

Direct to Consumer (DTC) funding has radically pulled back because simply having a DTC company isn’t enough to attract investment – today, a DTC strategy is an expectation. But startups can take this time to develop something that can’t easily be replicated, like technology. Or, as investor Caitlin Strandberg said, don’t even ask for investment unless you have an Amazon strategy, because social media isn’t where they see buyers, “if you’re going to be where people buy—people are buying more and more on Amazon—you can expect they’ll search your brand name on Amazon, and you want to be on that search page,” so be looking your sales channels along with SEO and digital PR so your startup is poised for growth.

One of the best ways to stay focused on success is to lay the groundwork for a successful IPO. There is a lot to do, both internally and externally, and getting started earlier will save you money and time as the exit gets closer.

You should take this opportunity to do some scenario planning as well. Now is a great time to plan for a crisis, and create plans for things like cyber breaches ,which will help you secure your future.

 

Tomorrow’s greatest companies and emerging industries aren’t going to allow this uncertainty to derail them. This is where the rubber meets the road, and strategy makes a difference.

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