The goal of most company founders, owners and investors is ultimately to have a liquidity event that rewards key stakeholders for their role in creating a successful company.
For example, if you’ve built up a great tech company over the years through brains, hard work and perseverance, odds are you’d love to be acquired by a big company that will pay a handsome premium for your firm.
Sadly, many good companies never reach that milestone event, but few understand that one of the key drivers of their failure was that they consistently underinvested in PR.
That’s right. Underinvesting in PR can lead your business to not be acquired. Moreover, if you do manage to get acquired without having had good PR, odds are you are leaving money on the table that would have been there if you had done a better job in promoting your company.
Investors and Investment bankers say:
• We track industry news, looking for companies with potential
• We attend industry events
• We talk to industry analysts
• We tend to know all the key players in our space that might make sense to acquire
In other words, with the exception of the last item, potential acquirers of your company are finding out about you through your marketing and PR.
But if they don’t hear about you, if they don’t know that you exist, what do you think the odds are that they will want to acquire you? Close to zero.
The blinding glimpse of the obvious here is that if you want to get acquired, invest in PR.
Invest even more in PR as you enter the final 24 months when you are packaging the company up for sale. Each media placement or analyst mention you get is a hook in the water that might catch the eye of a potential buyer.
The call starts something like this: “We saw your company mentioned again today in The Wall Street Journal. It seems like you are getting a lot of attention and we thought it might make sense to meet to discuss some strategic partnering options.”
Play your cards right and you can turn that call into a signed Letter of Intent to buy your company for a sweet price.
Of course, an even better scenario is if you are mentioned in the media and get multiple calls like that one. After all, the best way to get a high exit valuation for your company is to have multiple bidders competing to buy you. While it’s true that hiring an investment banker or business broker can help with that, good PR also can be a driver of getting multiple buyers to the table.
It makes sense. The better you are known, the more people who are likely to want to buy you. In contrast, if you keep a low profile and stay in stealth mode, just keeping your customers happy, nobody is going to make you an offer.
PR has always been a great way to build credibility. A positive mention in the press is an endorsement from a credible third party that says you are the real deal, not a pretender. Other outputs of PR — such as appearing in analyst reports, winning industry awards, or getting a speaking opportunity on a panel at an industry conference — also convey that you are a player and put your company name in front of potential acquirers.
PR works because it’s not you saying “I’m great” — which sounds a bit self-serving; instead, it’s a respected outsider saying “They are great,” which is much more convincing.
That credibility and visibility is great for attracting customers, but it’s just as great for attracting investors and acquirers.
Public relations will get you a higher valuation price for the exit. If you’ve won a prestigious media award or industry accolade, tack on one or two million dollars to your sale price. Featured multiple times in major business media outlets and industry trade publications? Add a few more million to your selling price.
The acclaim you have built around your company has a value to it, and acquirers will pay extra for that value.
So what are you waiting for? If you want to sell your company within the next two years, the day to hire a good PR firm was yesterday. If you are a tech company that has a track record of success, we are here to help you get across that all-important finish line. Get in touch for an initial conversation and it could be the first step toward achieving that big company sale you’ve been dreaming of.