Trylon Communications  - June 2005
       

Media’s Role in Venture Capital

A major challenge for venture capital companies is raising the value of their portfolio companies. Churning out press releases that appear on the web only and disappear after a few hours won’t get the job done. A well executed media relations program that brings the portfolio companies press attention can reach key target audiences with messages that enhance credibility, boost awareness and accelerate business development – driving higher valuations.

The first step of such a strategy would be to target the appropriate news centers. New York is the principal business news center in the U.S., while Boston and Silicon Valley (and to a lesser degree parts of Texas, New Jersey and Colorado) can be considered news centers for tech news, while Washington D.C. remains the news center for politics. A PR plan that thoroughly covers the appropriate regions is most likely to succeed. The objective would be to produce a steady stream of tangible, credible media placements in major media outlets.

Any public relations program that has a chance to succeed must be built upon close working relationships with key reporters and editors in the target news segment. With the ongoing fragmentation of the media into multiple distribution channels such as the web, podcasts, blogs, and streaming media, it is also important to recognize the type of distribution channel your media contact utilizes and structure your pitch accordingly.

Company officers and public relations firms are met with more skepticism today than ever as a result of the recent journalism scandals and the shadow placed on the media by these scandals. Journalists today are expected to drill down to find the cogent facts surrounding a story, and woe to the company or PR pitchman who tries to hide unflattering facts with assertions and fluff. Therefore it is of vital importance that any potential story pitch or media approach is thoroughly thought out and vetted prior to any action being taken.

Media relations programs can relay to journalists and their influential audiences the ongoing news of portfolio companies in a more cost effective and credible manner than advertising. Using publicity programs intelligently, venture capitalists and their portfolio companies will benefit when positive news about them is reported in the U.S. media and becomes valid currency in the cycle of business information and perception.