May 3, 2018
For the VC and private equity community, PR is like holiday decorations or fancy napkins: something to be pulled out for special occasions – such as important transactions and deals – then stashed in the back of the closet until the next party. While deal-driven campaigns are certainly an important opportunity for investment firms to elevate their brands, they are only one part of the equation.
Investment firms need to have meaningful visibility independent of transaction events, especially in today’s competitive climate, where nontraditional sources of capital also compete for limited deal flow. In the Pitchbook Platform’s recent survey of 45 private equity firms, 91 percent reported that the need for a strong brand has increased in just the past two years. To elevate and differentiate its brand, a firm must adopt a cohesive, ongoing brand communications program that articulates key value propositions both in and beyond a transactional context.
Messaging: Getting the Story Straight
The most important element of any strategic communications program is getting the messaging right. In institutional finance and investment, deals are made based on numerous factors, from metric-driven criteria to intangibles that may include chemistry with senior management or perceptions in the marketplace. The trick is to encapsulate relevant points in a cohesive and comprehensive narrative that resonates with potential investors.
Stakeholders invest in a story as much as they invest with a firm or in a deal. Telling a story clearly involves breaking it down into its foundational elements, including:
- Mission/purpose: articulating not just the “what”, but the “why”
- Origins and evolution: conveying the background
- Investment philosophy: explaining the underlying innovative thinking
- Distinct differentiators: highlighting qualities that set a firm apart
A comprehensive messaging platform may include additional elements, which should be identified at the outset of a program. This diligence ensures a narrative is communicated clearly and consistently across channels, at inception and throughout an ongoing program.
Deal Announcements: Beyond the Tombstone
Deal news and other one-time transactions present opportunities to disseminate information about an event but can be leveraged for broader branding and storytelling activities. Too often, communications strategy veers towards the routine: only required information is communicated to a few LPs, regulators and other insiders. The time pressures of the deal process sometimes necessitate such a barebones approach. When this approach becomes the rule, firms lose on brand-building opportunities: in the PitchBook survey, 21 percent of private equity firms reported that they failed to capitalize on their firm’s news.
A successful PR effort around an individual transaction will do more than communicate the basics to a few required audiences. A PR approach will place the deal in its appropriate context and explain the rationale behind the investment decision in a way that resonates with general business audiences. In other words, it will answer the all-important “why now?” question. This question can and should be addressed in the deal announcement itself, as well as in follow up interactions with key business media and via social media platforms.
Bottom line: the humble tombstone is no longer enough. The broader significance and story behind the deal—and relevance to the firms involved—must be communicated to get attention in a crowded marketplace.
Ongoing Positioning: Create a Drumbeat
Just because the pipeline is quiet, doesn’t mean investment firms should be. On the contrary, an occasional lull is an ideal opportunity for firms to build their brands and tell their story proactively, reminding the marketplace of what they offer that others can’t – namely their unique combination of experience and expertise and the soundness of their underlying investment philosophy. According to the PitchBook survey, 70 percent of private equity firms say a strong brand is very important, and 30 percent say it is somewhat important.
Firms can start by assessing their roster of subject matter experts (SMEs). These personalities can serve as storytellers, or brand ambassadors. Each SME would have a specific purpose and/or area of expertise, which gets tapped for business development, lead generation and public relations. Generally, a high-profile speaking opportunity or Forbes feature story about a firm is best handled by the highest-ranking executive, but a contributed article about a specific industry is best authored by the SME involved.
Once the SMEs have been identified, assigned and armed with the right messaging, proactive efforts can begin to establish an ongoing visibility program. Components may include media relations (traditional and social), contributed content, events and speaking opportunities, partnerships, lead generation, digital (website, search, analytics), research, thought leadership, and various other initiatives to help tell the story and strengthen the brand.
Break Out the Good Napkins
By embracing a consistent and compelling brand communications strategy, VC and private equity firms have an opportunity to build awareness of their capabilities in all market environments. Once a transaction arises, firms that have cultivated a strong PR strategy and brand will have a leg up on the competition in attracting capital to their deal.
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