When venture capitalists say “NO”—creative financing strategies & resources, by Ron Peterson

North American Press Syndicate guarantees you 400 stories for $3,000, mostly second and third tier publications. PR Solutions from www.lexisnexis.com has a gateway to weekly media updates at hotnewslist.prsolutions@lexisnexis.com. www.getpress.com has a range of inexpensive PR services to get you started. The slowed economy of 2003 opened PR doors for entrepreneurs who couldn’t otherwise afford substantial up-front and continuing fees from major PR houses. You might check with area PR firms to see if they’ll cut you some slack while you’re seeking funding (partly, you can mention, to pay their eventual bills). In Boston, Clarke & Company was happy to help startup ZForm with initial services at a much reduced rate. In Methuen, MA, Sentrepity Associates provided expert help through a group called “MassWit,” a division of the WorldWit global online community for women in the technology field.

1. Put your story into context. Think it all the way through and see it with the eyes of a reporter or editor. What is the real import of your story and how would it fit the interests of their readership?

2. Don’t send information that isn’t really newsworthy. Leave the routine items behind and only provide data that can become an interesting article.

3. Quantify your story. If you’re talking about growth note the year-to-year change. If you’re talking about benefits show the size of the marketplace and estimate the savings/revenues/etc.

4. Make sure that your contact is available right after the story goes out. You will seriously damage your -credibility if a reporter is unable to contact a company spokesperson.

5. Your point of contact should have full information at their fingertips to include fact sheets, references, telephone numbers, etc. to facilitate the work of the journalist.

6. Piggyback your story on other breaking news. If a fire claimed a large building and you have a form of sensor and monitoring system, as an example, take advantage of the opportunity.

7. Go to the reporter instead of to the editor. Reporters want to initiate stories instead of being told what to write—it’s an ego thing.

8. Think visual when you’re putting out your story. The media needs pictorial content. Try to make an exciting representation instead of just pictures of guys in suits.

9. Generally you should plan on a one-week lead-time for any story except for breaking news.

10. You’re more likely to be picked up if you deliver your story in the early morning instead of afternoon and the earlier in the week you can do it the better.
Ben Silverman expands on these principles with Ten tips from the PR boot camp that you can read at www.pressaccess.com. As an example, Silverman suggests that it’s best to put out a press release in the morning, “ . . . but don’t do it too early. If you put out a press release at 7:00 AM it may end up being ignored because by the time journalists get through everything in their inbox, there are already 200 other releases that have come after yours. Private firms should wait until after 9:30 AM [a period following a public firm’s barrage of press releases].”
When everything else fails.
An entrepreneur had begun his company, E-College, and was succeeding with his technology and getting rave reviews from his first customers. He needed money to build out his concept and venture capital seemed to be ideal. Located in Silicon Valley, he started making the rounds of the many nearby VC firms. Door after door he found closed to him and after many months no one seemed willing to take his proposition seriously. He was sure that his company was going to succeed and that it would be an excellent investment for a VC. He finally found someone else who thought it was a good story, a reporter for the San Jose Mercury News. An article appeared in the newspaper on E-College and that morning the entrepreneur received five calls from venture capitalists who wanted to see his business plan. It wasn’t long after that he received the funding he needed, from one of the five who called. Nothing had changed about his business except that PR told his story.
How to place an article and use PR to attract capital.
1. Don’t call with your proposal or story, write something brief. Also, it’s better to write a personal memo to the journalist than sending a broad press release.

2. Don’t call either a VC or publication a few days after and just ask them if they received your proposal or release. It’s fine to call if you have additional information to add or simply to make a query about possibilities, but don’t needlessly harass them.

3. PR is an ongoing process and one memo/release is not the end of it. Keep looking for news opportunities such as contracts, new partners, etc. Your website is essential since people who have some interest in you will look for more background by going to the Internet.

4. Find speaking opportunities. VCs and other investors will be at trade shows and meetings and you need to become known.

5. Very clever stunts can work. One company hired the shoeshine boy at a hotel to give free shines to any VC or journalist who stopped at their booth, giving them enough uninterrupted time to tell their story.

6. Personal public relations need to be your foundation. You personally have to get out and mingle with people and get your story told, although everyone associated with your company should be an asset as well.

7. Start with the assumption that PR can be your most effective way of getting the attention of venture capitalists and other funding sources and then map out your campaign.

8. Determine the PR channels that you want to use. Who do you want to get to and what story do you want to tell? What channels are available to you, what affinity groups exist for your company?

9. Direct approaches to VCs are far less effective than referrals or PR that triggers their interest. VCs are inundated with business proposals and simply have no good way of- -identifying the truly promising ones that show up, so you have to find a more interesting approach.

10. It’s unlikely that your technology alone is really what interests most VCs or publications (unless you are truly unique). You need to answer questions about who the players are, any named customers, any prominent investors? The interest will be in how you’re solving a problem—what’s the benefit that you provide?

• Write an article about your industry without mentioning your own business. Speak about concerns that are common to everyone and elaborate with authority, citing examples that support your claim.

• Begin a letter-writing campaign to the trade press editors who are responsible for your area of expertise.

• Write a short press release covering initial subject matter.

• Send an audiotape to area radio stations of a staged interview between a staff member (moderator) and yourself.

• Create a press kit that includes all of the above materials and your photo mounted on a resume.

• Create a library of reference materials that can be called upon for adding integrity to your claims.

• Offer to speak at industry gatherings, trade shows and professional associations.

• Subscribe to (and consider paying for a listing in) Experts, Authorities and Spokespersons, a yellow page type of publication that lists speakers and authorities by category. (Broadcast Interview Source, www.yearbooknews.com)

• Create a press event for your company, inviting prospects to attend a party with refreshments and information. You will be the keynote speaker and will be distributing valuable resource material to attendees.

• Contact local cable television shows and include information on your specific areas of interest, awards and previous press coverage.

• Hire a professional PR person to do all of the above.

PR agencies are changing and specializing so a web or other search that aligns your interest with the right group may jumpstart a relationship. Marc Hausen has built Strategic Communications as a PR agency that helps develop marketing plans and connects you with their own network of service providers including venture capitalists and investment bankers (www.gotostrategic.com).

Don’t focus on the technology, just the end result—that you’re running a business not an academic research group. Don’t ever say that you have a billion dollar idea or that you have no competition because both are turnoffs to experienced investors and immediately suggest that you don’t have a real head for business. Show how early-stage investors will come out on top. Focus on getting to your market, the service or product that you provide, and evidence of customer demand. The same elevator pitch is also useful for obtaining customers, employees, strategic partners, PR, etc.

After quickly showing your market and solution, describe it as an investment opportunity. Put your listener into the picture in a meaningful fashion. You need to show that this is an open idea and that the listener could benefit by investing. You have to be subtle, because you don’t ask for the investment until you feel that you made the sale, but you want to invite the listener to learn more about your company. Ideally, you’ll like a chance to make a complete pitch to the person and perhaps their friends, relatives, company, etc., as well. You’re opening the door to a dialogue and you’re doing it without boring them. If you want to attract capital your energy needs to be in your voice and this comes when you’re 100% sold on your own proposition. When this happens, you’ll want everyone to invest. How good is your elevator speech? If you can’t get someone excited in 60 seconds, it needs work. Also, can you characterize your company as something more memorable than “software” or “biotech” or “retailer”?

Your message has to be distilled down or it’s going to be lost. Entrepreneurs often go on and on, “we’ve got this and we’ve got that, and we’re going to do this and all that” but people have lost interest by the time the entrepreneur has finished.

You say you’re going to do that? Well, show me some sign you’re serious. It could be someone important who has taken an interest in you, or you’ve done a deal with somebody, or some other kind of proof in the form of a name or statistic. Premise and endorsement: that’s the elevator pitch. Two sentences, and make it really interesting. Accenture Consulting suggests that the elevator speech should take no more than 17 seconds, your only chance to get across your most intriguing value proposition.

The managing director of the entrepreneur center at MIT’s Sloan School of Management, Ken Morse, teaches presentation skills by offering guidance on networking and even on cocktail-party management, complete with sketches of a typical reception. MIT holds an annual competition for business plans and counts on large numbers of investors and venture capitalists to tune in to the plans and pitches. A number of scientists and engineers have had to learn that long descriptions of technology usually lead to glassy-eyed disinterest and what’s needed instead is to get to the benefits right away. What is it that someone will buy? Can you define your market, service and customer demand?

Coaches can help you get ready for presentations. Patricia Fripp is a San Francisco-based executive speech coach who advises her clients to discard fancy Power-Point presentations and tell stories instead. Her terrific website www.Fripp.com is a tour de force of help in making a good and profitable impression. She suggests that people remember what they “see” in their minds while listening, not showy visuals. Other Fripp suggestions include starting by answering the audience’s basic question, “Why should I care about your subject point of view?” She tells us to “Make your point of view obvious and compelling. Turn numbing data into exciting pictures of what will change in the listener’s life. Help them make the decision your presentation is designed to promote.” New York-based Amy Solas gives a workshop entitled How To Win Business, Raise Capital, Sell Companies—A Hands-On Workshop that focuses on making a good presentation, www.solascommunications.com.

RMR Associates in Rockville, MD holds a workshop on delivering your elevator speech. They ask you to picture this: “You’re at a networking event. Everyone has a chance to talk about himself or herself. You are next. What will you say? Will you be remembered? Will you get the results, the contacts, and the action you want? Or will your intro fade into the background like so many others?” They promise you’ll learn: “How to set yourself apart from others. A step-by-step, foolproof approach to creating the introduction. How to get the audience’s attention. How to close your introduction and get what you came for.” RMR charges $140 and can be accessed at www.rmr.com. Bob Bailey of ebiz presents workshops on elevator speeches entitled Does Your Elevator Speech Go All the Way to the Top Floor? Bob is an expert at sales presentations (ebiz@usa.net).