Why long term PR is crucial for pre-funding start-ups
12th March 2014
It is difficult for start-ups to get the right and sustained media attention so critical for them to be visible to potential investors, while the right kind of positioning and visibility does go a long way in the funding process. Therefore building the necessary credibility is crucial since there are many ventures seeking investment.
Tight budgets are a primary challenge new ventures face. For most pre-funding stage startups the PR investment can practically be their entire market budget or most of it. Alongside this, the need to sell a new or different concept as well as the lack of dedicated resources to manage the PR process means one of the founders need to wear this hat as well (in addition to others they are already wearing) .
Let’s look at the four options the founding team of a start-up could consider.
The first is doing it internally. Where either one of the founding team members or a senior member of the team spends the time developing the message, figuring out the right journalist set to reach out to, engaging journalists to generate interest and seeing that through to the end coverage, alongside being able to plan and repeat this cycle with new angles every time consistently. However this consumes critical time the founder or a senior member needs to spend refining the business model and building the necessary ecosystem or momentum for the new venture. And there is no guarantee that this critical time spent will bear the desired results. Essentially ruling this option out unless any of the founding team members’ is trained or has some prior exposure in this area.
The second one is to hire a good quality resource inside to help in this process. The challenge is that such resources – some with a clear and significant price tag – in the early stage venture may not be able to utilize their time and bandwidth fully.
The third option is to look at freelancers or small PR firms to work on the account. While this is a cost-effective option it may not bear the desired results for a few reasons. Such freelancers or small PR firms will have the media contacts or access in one particular market but not the ability to help the founding team position themselves well, shape the right messaging, be able to work in multiple cities or handle multiple tasks (speaker/recognition support) and plan in such a way to optimise investment versus results. Investing in the right positioning, messaging and plan may not look important but brand building or external messaging unfortunately does not end with getting funded.
And markets don't allow a certain perception or positioning to be changed at will pre and post funding. So, while firms may get the desired coverage in the short term, there is no thinking of the brand beyond the point of funding. This can generate issues and complications later which need to be addressed.
The fourth and most effective option is to find a right-sized PR partner who will guide the founding team through the entire process, own it up and hand hold it till successful execution. This approach has two advantages – the founding team or senior member will only need to spend a limited time focusing on the process, freeing up time for other priorities. And vesting a professional firm with responsibility imbues it with a higher chance of success.
Having run through the four potential options before a start-up, I will now focus on tips and best practices to help find the right PR partner.
Firstly, be clear who you are looking for – with exceptions, the larger and global PR firms don't work at all in this space or budget range and even if they take a mandate may not be able to service it as a priority account. Unless there is a clear senior management commitment it may be a good idea to not look at this category of firms. Fortunately for start-ups in the Indian market, there are a range of boutique, well established and fairly sized firms which both have the necessary attitude and capabilities to do justice to the needs of such ventures.
Next, don't just focus on media relations alone. From speaker opportunities, event presence to recognition support, there are other tools which are non-paid and effective which if integrated with a targeted media relations campaign can help in delivering on the mandate.
The next best step would be to identify the right partner in this category of PR firms. This can be done through the process of referencing or a formal pitch process wherein you shortlist and then hire a partner who scores high on the criteria set. Even if it is a budget you have to stretch, it is worth investing as it delivers a strategic advantage to the start-up in the pre-funding stage.
Once a partner comes on board, instead of the typical client-agency relationship, it is a good idea for the founding team to spend quality time with the assigned team. Not just taking them through the venture, the business model, the differentiation etc. but also in making them feel comfortable. This may seem like relatively small advice but from my own experience, I have discovered that such soft factors do compel or lead to servicing teams stretching and delivering results to those ventures whose founding team engaged them in this way. In fact, this is one piece of advice I offer to entrepreneurs in the first meeting.
Lastly, ensure the deliverables and priorities are set through discussion right at the outset with the partner to avoid complications later. This is even more crucial for a start-up to get this right since it does not have a large budget to experiment with nor does it have a huge amount of time on its side to correct it later. It helps the partner as well since they know what to focus on.
To reiterate, I definitely don't recommend start-ups to take a short term approach, instead invest in building a cohesive story, a collective voice and elements of soul that will let you connect with your customers, partners and communities to be, as well as being discovered as a source of expertise to the media in the chosen area.
Also, while targeted and sustained coverage helps start-ups gain a significant advantage in the funding process, it also has a couple of other benefits as well. Firstly, such structured PR campaigns help in articulating the value proposition in a fiercely competitive market thus creating a compelling “idea of value” in the minds of customers that is simply not available from the alternatives in the category. Second, such visibility helps the new venture attract quality talent which again helps gain business traction not to mention positively influencing the investors.
There are many instances or stories of how lots of entrepreneurs and start-ups have used PR successfully to get noticed by the right investors, get their message across in a cluttered market and leap to the next stages of evolution. So, what are you waiting for?
Xavier Prabhu, Founder & CEO of PRHUB, an independent firm that has worked with start-ups and growth ventures.