Handling PR with VCs
I recently got a phone call from an entrepreneur whom I respect and who runs a company that I hope will do great things one day. He had pitched me in the past and I told him that for a variety of reasons his company was too early stage for me, but that I would happily keep track of their progress.
He started the call by telling me he had exciting news. He was about to be featured in a major US news magazine as one of their “hot” picks. I think my response surprised him, “Really? Is that why you called? To update me on your PR? That’s what you’ve got? PR? Save it for someone who cares! What progress have you made in your business?”
I don’t think that’s what he was expecting. Entrepreneurs get so used to friends and family congratulating them on their press coverage that they forget sometimes that this isn’t real. A positive news story means NOTHING about the core performance of your business. A good friend of mine was featured on the front cover of the LA Times business section with a glowing article. He had 2 weeks’ cash left in the bank and was facing massive layoffs or potentially bankruptcy.
Press doesn’t mean anything other than free advertising. Don’t get me wrong, I’m very pro PR but please see it for what it is and don’t think that smart or experienced people are going to see it as any more than it is either.
Our call recovered and we spent the rest of the time talking about the development of their management team and their product. But it got me thinking about how often entrepreneurs overplay their PR so I thought I’d try to offer some advice and how to play PR with VCs (or more broadly with customers or business development partners)
1. Press coverage really matters – The good news – your press coverage really does matter. I know that most people will tell you that they aren’t influenced by what they read on TechCrunch but the reality is that people are way more influenced by what they read in the press than they even admit to themselves. Just notice how many VC emails you get after your TechCrunch article or after you were on stage at TC50. Please don’t take my post as meaning you shouldn’t have PR as an important part of your company’s strategy.
In another post I’ll talk about how PR has changed dramatically in the past 10 years or you can just read Brian Solis’s blog or buy his book on the subject. Most notably you need to understand Earned Media and how blogging, public speaking and social media play an important role in the new PR landscape.
2. In your VC pitch your PR page should take no longer than 30 seconds – Wait. If press coverage matters so much then why shouldn’t I talk it up more in my VC pitch?
Many entrepreneurs have a PR page in the PowerPoint deck. It has logos of the 5-6 most prominent places they’ve been covered with a paragraph from each article. They proceed to read these paragraphs out loud to the VCs in the meeting.
PR is subtle. When I read an article about you I’m influenced. When you sit and walk me through it for 4 minutes on a page I’m reminded of what it is – press coverage. It shows nothing more than you have the ability to get coverage for yourself. Again, I reiterate, it IS important. Press coverage helps you to recruit team members, it helps add legitimacy to your customers who often do Google searches on you before buying and it helps influence biz dev (partners), corp dev (acquirers) and investors.
So what is the right way to pitch your PR page – either in a VC meeting or in a biz dev meeting? Put up your slide with the 5-6 logos of journals that have covered you. Reduce any quotes to a few key words and make them large.
When the page comes up say,
“I guess every entrepreneur needs to put in the obligatory PR page. We feel honored that we’ve gotten such good press coverage. Most notably we loved that ReadWriteWeb referred to us as ‘a next generation TripAdvisor” because that’s exactly how we want to be positioned. PR has helped us to drive our numbers faster than we had planned and has gotten us to our 300,000 registered users. We plan to continue to use PR as an ongoing part of our customer acquisition strategy.”
End. Next page. And only go back if you’re asked to. Leave them wanting more. You’ve accomplished two things. One – you’ve shown that you understand how PR plays an important role in customer acquisition and more broadly in your company’s success strategy. Two – you’ve been subtle about your PR achievements so the VC is left with a positive impression of your press coverage rather than becoming cynical.
3. In an email you can have curated links - So at the risk of sounding contradictory, I still think press coverage is important to VCs. The best way to handle your press coverage is to send a series of links in an email to the VC you’re getting back in touch with. It can be a simple email on any topic and toward the end say, “I’ve included some links to the most important (or most recent) articles covering us in case it helps with your research.”
I’ll close this story down with the one I started – the entrepreneur who called me to tell me he was about to be profiled in a major news magazine. How could he have turned this into a positive? After the article was written he could have sent me a short email with a one paragraph intro saying, “Just wanted to let you know we got this great coverage in ABC magazine: (link to article). We’ve been making progress in bringing together our management team and our next release is about to ship. I’d love to do a 30 minute call just to update you on our exciting news.”
9 times out of 10 I’ll click on the link and peruse the article. If it’s positive it will probably have some minor impact on my perception of you – whether I acknowledge it to myself or not. Strike one up for subtlety.