Yesterday I wrote a post about The Silent Benefits of PR in which I pointed out that most young companies I encounter don’t fully grasp the benefits of PR because they are less measurable than product milestones or customer acquisition analyses (like CAC/LTV).
In that article I talked about how PR drives: recruiting, employee retention, biz dev deals, funding and even M&A and that often “attribution” to your PR activities is unknown. It’s like “direct” traffic to your website that seems to magically appear.
But of course it’s hard to advise people that they should do PR without a guide to how to do it on the cheap or how to do it at all.
When to start PR?
I’m generally not a believer in too much PR until you have a product built or at least well designed. This is somewhat changing in the world of crowd funding where people actually raise money so that they can build products but at a minimum your product design ought to be complete and ready to execute. On the other hand several crowd-funding campaigns have underwhelmed in terms of meeting deadlines which damages ones brand so be careful about this, too. The best case I’ve seen is our portfolio company Osmo who had already built the product but used crowd-funding to handle inventory management, supply-chain logistics and perfecting the final version of the product. Contrary to popular opinion I actually believe crowd-funding is best used after seed capital or venture capital. It super charges a business that is closer to product delivery.
I’ve been having this PR discussion with three separate portfolio companies at once so I thought I’d just publish my thoughts more broadly.
I have written many times about PR so if you want a deep dive on the “how” of PR you may enjoy reading some of these posts.
PR is an insanely valuable activity in early-stage companies. Very few investors understand this and even fewer startups. When you’re an early-stage business every dollar matters and because many startup teams these days are very product & technology centric they often miscalculate the importance of PR. I believe PR is often not tangibly measurable and for quant-oriented people this is hard to accept.
The benefits of PR are exactly that: Immeasurable. They are silent. They don’t show up in a calculation that says I spent $7,000 and I got X-thousands inches of press. It doesn’t work that way.
1. Recruiting – One of the hardest tasks of any startups is recruiting world-class talent.
We are often asked how companies get funded, why VCs make the decisions we make and what we’re looking for in entrepreneurs. I think this is a Seriously great example of how this process works for at least one VC – Upfront Ventures. But I’m guessing the narrative is similar elsewhere.
I first met Andrew Stalbow, the founder & CEO of Seriously in August of 2013. He hit me from two very trusted sources. On August 23rd, 2013 I had an email intro from my good friend and trusted source Jeff Berman who only sends me stuff when it is somebody he respects (ie a strong filter vs. those who send casual intros). On August 26th I had an equally effusive intro from Ynon Kreiz, also a friend, trusted source and also the CEO of portfolio company Maker Studios. So this was definitely an introduction I was going to take.
We met on August 28th, 2013 and I know this because literally the next day
Much has been written about when it is time to hire a “professional CEO” to run a startup company and of course that has long been a norm in Silicon Valley when founders find that their inexperience may be a limiting factor in company growth (know as the Peter Principle).
Much less has been said about when the technical CEO is the best person to run the company.
Yet if you look at some very successful market changes in the last few years it does point to technical prowess in the number 1 seat. Case in point is the return of Larry Page to the role as CEO of Google. I don’t think that Google would have become the success story we all know without the leadership of Eric Schmidt through the years he led the company.
So why did Larry need to return?
It seemed that Google was being out innovated by another Silicon Valley technical leader, Mark Zuckerberg. Somehow in a world of rapid change Mark had been able to right his ship much faster than the highly bureaucratic organizations that places like Google, Yahoo! and Microsoft had become.
Prorata rights are one of the most important rights of private market technology investors and yet are seldom fully understood. They often create the biggest tensions between investors who are investing at different stages in the business.
politics of money by bastera rusdi on 500px
These tensions seep out in some angels or seed funds publicly or semi-privately deriding later-stage VCs for their “bad” behavior. I have seen bad behavior from later-stage VCs, believe me. But I have seen equally bad behavior from super early stage investors.
As always a balanced perspective is in order. Here’s what you need to know.
1. Why investors care about prorata rights
Prorata investment rights give investors the right to invest in a startup’s future fund-raising rounds and maintain their ownership % in the company as the company grows and raises more capital. This is important for nearly every institutional investor because once you have 25-50 investments being able to “follow” the investments that are working well is critical to making money. It’s why