Shawn Ramsey

Apr 08

VC is on the rise and so is my optimism

While 2012 was a challenging year (to say the least) for venture capital, 2013 might be off to a better start according to Ernst & Young’s tenth annual Venture Capital Insights and Trends Report

According to the report, steadying economic conditions bolstering investor confidence and an increased appetite for risk combined with a better prospect for exit opportunities will make 2013 a more positive year for all of us. That is good news for entrepreneurs, and companies like Crossroads Public Relations that serve them.

While this may sound like cause for celebration, don’t start your happy dance just yet.  There are a few caveats that entrepreneurs need to keep in mind. The report explains that VCs are increasingly focused on companies in the revenue generating stage vs. product development pre-revenue stage, are making later stage and smaller investments, and demanding tougher terms. That means that a good idea is probably not good enough. You need to have an actual product generating revenue from actual customers that actually want to pay for it. Not really a novel concept, more like an oldie but goodie.

Corporate venture investing is also on the rise, surpassing pre-dotcom levels in 2012, as corporations look to invest in and acquire venture-backed companies to fill their gaps. Try to follow me (and the money) on this one. More M&A activity leads to a return on the investor’s investment, and which could lead to more investment, right?  

Entrepreneurs may take some satisfaction in the fat that competition for dollars is fierce, not only for the entrepreneurs, but for the VCs themselves as they compete with one another and other sources of capital. Also like entrepreneurs, VCs are forced to establish a more robust value proposition for their own investors. Again, not exactly a novel concept, but a good one. 

I for one am thrilled to see any positive signs of growth in venture capital, M&A and the economy in general. This report and these trends are a good starting point, but lets keep it coming. I don’t mean to sound greedy but I want more!  

Dec 11

CEO Branding is Nothing New

CEO Branding. I keep seeing more and more articles about it, and even see agencies being built around it, as if it were some new, cool strategy and/or concept. I will let you in on a little secret (which is actually no secret at all for most of you). CEO Branding is not new! It has been around since companies/businesses have been around. Think LouisVuitton, Ford Motor Company, etc. The CEOs were the brand!

I myself have been doing it for nearly two decades. I have to admit that I have never really referred to it as CEO Branding though. Here at Crossroads PR, it is simply part of Thought Leadership. While I certainly don’t agree that it should be touted as the latest and greatest branding concept, I do agree that it is extremely important, especially for the entrepreneurs we work with. For a young company, demonstrating the expertise of a CEO and founder, and generating third party validation for that expertise is key to survival and success, especially when competing against more mature companies with established brands. 

How can entrepreneurs help build their own Thought Leadership (aka CEO Brand)? They can start by building key messages and bios that emphasize that expertise. They can share that expertise with their target audiences via blog posts, byline articles, speaking engagements and other communication platforms. Once they have demonstrated that expertise, they can look to others to help validate that expertise – via editorial placements, customer testimonials, partner endorsements/referrals, etc.

Have you started building your CEO Brand yet? If not, hopefully I have given you some ideas to help get you started. And, if you need more help, just let us know : )

Nov 01

The CEO Success Factor in PR

This recent Forbes.com article, 4 PR Habits of Highly Effective CEOs, prompted me to think about the role CEOs have played in the success and/or failure of our own client PR programs. Over the past decade here at Crossroads Public Relations, we have learned that our chances of helping a client build a successful PR program increase significantly when the CEO is involved/accessible, supports those initiatives, and sees our agency as a strategic business partner vs. tactical arms and legs.

While we often engage initially and work directly with a VP/Director of marketing, we push for immediate and consistent access to the CEO and other key C-level executives. 

Here are some examples of why that is important: 

We know that this relationship is a two-way street. We can’t expect to get all of this from CEOs without giving them what they need in return. We must earn the respect and support of those executives by educating them on the value of PR/strategic communications and by demonstrating ROI through business metrics that tie to their bottom line – i.e. metrics they can proudly share with their board/investors. 

Sep 24

If at first you don’t succeed, try (and maybe fail) again

This may come as a shock to all of you startup founders/entrepreneurs out there, but Mark Zuckerberg’s smashing success is not the norm. In fact, according to a recent report from Shikhar Ghosh at Harvard Business School, the norm is probably just the opposite. Ghosh reports that about three-quarters of venture-backed firms in the US fail. 

That dismal failure rate does contradict what some venture capitalists say according to the article by WSJ writer Deborah Gage. Gage says venture capitalists typically say that only three or four out of ten startups fail. According to the The National Venture Capital Association’s website, 40 percent of venture backed companies fail; 40 percent return moderate amounts of capital; and only 20 percent or less produce high returns. 

According to Ghosh, venture capitalists often “bury their dead” and “emphasize their successes.” He also points to inconsistencies when defining failure, explaining that “if failure means liquidating all assets with investors losing all of their money, an estimated 30-40% of high potential US startups fail. If failure is defined as failing to see the projected return on investment, then more than 95% of startups fail.”

Gage’s WSJ article highlights the story of entrepreneur Daniel Dreyman, founder of Goodmail Systems, which raised $45 million in venture capital throughout a rocky journey paved with failed strategic partnerships and a dashed acquisition by a Fortune 500 company – a story all too many entrepreneurs can relate to. 

While this story of failure seems like a depressing one, there is a silver lining. According to Ghosh, venture capitalist David Cowan of Bessemer Venture Partners and others – failure is actually a very valuable step on the path to success. As a matter of fact, the 2011 Forbes article – Top Ten Reasons Why VC-Backed Companies Fail, cites “lack of failure” as the top reason entrepreneurs fail. As confusing as that seems, author Eric Jackson explains that, “its only through failing that we learn and really grow as leaders.” He says that some leaders who have never experienced any kind of failure — or even a down cycle in the market, can become over-confident and even arrogant. 

Jackson is obviously a big believer in the old mantra “if at first you don’t succeed, try, try again” as he goes on to say that “ those who have two good failures in the first 1/3 of their careers tend to succeed the most in the last 2/3.” 

For what its worth, here at Crossroads Public Relations we are doing what we can to help more startups succeed with the launch a free online resource called Techpreneur Spotlight. We set out to create a “go-to” resource where technology entrepreneurs (i.e. Techpreneurs) can post their news and bios for more visibility with key influencers, and gain insight from other like-minded entrepreneurs, investors, media, and others who may influence their success. Check it out and let us know what you think. Thanks. 

Aug 21

More Support for Startups in NC

I went to a great event last night - the launch of Startup North Carolina (@StartupNC) in Research Triangle Park. It was exciting to see so many people there to support startups in this area – a room filled with entrepreneurs and supporters from universities, government, incubators, investors, mentors, service providers and more.

Successful late stage entrepreneur Brooks Bell challenged other entrepreneurs to think strategically about job creation when building their companies. She talked about the “anti-job creation” mentality of the Silicon Valley, and how RTP has an opportunity to counteract that. She also stressed the responsibility of founders to create a culture including a core set of values and mission statement to drive alignment among teams, and to lead and inspire others.

Aaron Chatterji, Associate Professor at Duke University’s Fuqua School of Business, talked about the coming of age for entrepreneurship in America, but warned that we could not rest on our laurels since other nations are catching up. He pointed out that that majority of VC funding goes to three regions – CA, NY and Boston. He said NC has an opportunity to reinvent itself, to harness untapped potential andcreate a network of connective tissue that supports the sharing of ideas andresources - the premise behind Startup North Carolina and the Startup America Partnership. He ended his speech with a motivational push for the many young entrepreneurs in the room – “Entrepreneurship is how we change the world. Let’s go do it.” That mantra served as a great segway to the four up and coming entrepreneurs who shared their ideas with the crowd.

As an entrepreneur myself and the principal of a PR agency dedicated to working with entrepreneurs, I can’t wait to see what a difference @StartupNC can make for those entrepreneurs and this region, and I look forward to being part of it.  

Jul 31

A Whole New Crop of Entrepreneurs

Last night, Kristi and I joined more than 100 supporters of Startup Stampede as its third session came to a an end, with closing pitches from the 11 participating early stage companies. Crossroads PR has been involved with Startup Stampede since its first session, and it is always exciting to be involved with so many smart, passionate and creative people trying to make their own way in the entrepreneurial world. 

Last week we had a chance to sit down with some of those entrepreneurs including @seamhappy, @theaocproject, @offlinemedia, and The Makery. While spending time with them one-on-one and hearing about their companies, we gladly offered PR advice, but perhaps even more importantly real-world business advice based on our own experience as entrepreneurs. It has been more than nine years since we started Crossroads PR, but we can still vividly remember the fears and dreams associated with starting your own company. In reality, not all of these entrepreneurs will succeed in this specific journey but they all deserve kudos and support from the entrepreneurial community at large for taking this risk. And of course, Startup Stampede and the Durham Chamber of Commerce deserve major thanks for everything they have done to help these companies. 

Here at Crossroads PR, we look forward to being part of Startup Stampede next time and meeting a whole new crop of entrepreneurs there and throughout the community. 

Caption: Whitney @freshlygiven doing her closing pitch to a packed house at Beyu Cafe in Durham, NC. 

May 29

What Entrepreneurs should know about spreading manure and other helpful tips …

Kudos to Jason Caplain and David Jones at Southern Capital Ventures for bringing together such an amazing Entrepreneur Series last week. 

Don Rainey, General Partner at Grotech Ventures kicked it off talking about the success of portfolio company LivingSocial. Rainey went on to join a panel of of other investors from River Cities Capital Funds, TomorrowVentures and Volition Capital. This panel provided valuable insight and advice from investors outside the RTP area, giving entrepreneurs an edge on raising their next round of funding. Some of the best advice included don’t waste time writing a business plan;  leverage referrals/contacts to get your foot in the door; do your homework/know the VC and their focus before you reach out to them; and keep your outreach short and sweet/no 3 page emails please. Not surprisingly, these rules also apply to media outreach. 

Entrepreneurs from BlueStripe Software, Maxpoint, Netsertive and Windsor Circle went on to share their experiences including both trials and tribulations. 

Definitely the most entertaining portion of the event was the “founder story” shared by Canvas On Demand founders Tom Lotrecchiano and Joe Schmidt. They shared their “10 Commandments of Entremanureship.” No, that is not a typo. I said “manure.” The motto behind these commandments is “if you spread enough, something will grow.” Their hilarious insights and nuggets like “Don’t buy chairs” (cash is king, be frugal) and “You make your own sandwich” (as entrepreneurs, you get to pick who you work with, so make the company you want it to be) really struck a chord with me and my business partner as we face many of the same challenges they overcame (and sometimes failed at) along the way. I hope the other entrepreneurs in the room took it to heart as well. 

The room was packed, and this event will certainly be a tough act to follow, but I hope even more entrepreneurs attend the next one. If they don’t take advantage of great opportunities like this one to learn and network, it is their loss. 

Apr 18

To VC or not to VC? That is one of many questions.

That may be the question on the minds of many entrepreneurs, but the right answer probably depends on the one asking.  When it comes to funding a company, one size definitely does not fit all. As an entrepreneur/founder, you need to think long and hard about what it is you really want and need. Are you simply looking for money? If so, how much money? What is your growth plan for the company? Are you looking to build a lifestyle business, or are you looking for a high return (hopefully) exit in the not too distant future? How much revenue can your company actually generate? And, how much of the company are you willing to give up? These are just a few of the MANY questions you need to ask yourself.

Over the past 20 years, I have worked with hundreds of entrepreneurial companies, in-house, on the agency side and even with an early stage investment firm. I have seen venture capital money help some of these companies grow to become great successes. I have also seen venture capital money take away the entrepreneurial essence of some companies, crush the spirit of some founders, and kill the company in the end. On the flip side, I have seen non-venture backed companies grow to become great successes, and others fail because of lack of funding, lack of experience, an over abundance of ego/arrogance, and/or any number of reasons.  

For an inexperienced entrepreneur, VC funding can bring more than just money. It can bring a team of experienced business resources with a network of industry contacts that can lead to more funding, customer sales, partnership opportunities, and M&A activity. These powerful value-adds obviously come at a price, but for many entrepreneurs that price is well worth the potential return on investment.

As you think about building your company, be sure to consider all possible sources of funding including alternative financing routes. If you have an opportunity to build a solid foundation on your own, your company may be even more attractive to investors looking to help you get to the next level. As an alternative, friends and family may welcome the opportunity to invest in your new company. Angel investors, early stage investors and even incubators and accelerators should also be considered. And, don’t forget about grants. They can help you get your company/technology off to a great start. Check out NC IDEA or NIH for some examples. 

As you think about where to turn for funding, you might want to check out these articles I found on the same topic. And, as always I would love to hear your thoughts on this post, ideas about alternative sources of funding, or anything else you think our entrepreneurial readers might benefit from. 

Relevant articles: 

http://www.inc.com/erik-sherman/first-step-to-success-avoid-vcs.html

http://www.inc.com/steve-blank/vcs-are-not-your-friends.html

http://miter.mit.edu/article/vc-or-not-vc-question

Feb 09

Ambition Gap, Gender Gap … Call it what you will, its still a gap!

Many of you may have heard about Facebook’s COO Sheryl Sandberg’s recent discussion (at the World Economic Forum) about what she called the “ambition gap” between men and women. She went on to say that this gap impedes women all the way from childhood to the corporate boardroom, and that girls need to be more ambitious to achieve in the workplace. 

Sandberg got quite a bit of flack because the term “ambition gap” implies that women themselves are lacking ambition. Like the term or not, you can’t deny there has been and continues to be a gap between men and women in the workforce. Like many others, I am just glad that she brought it to the forefront (again). 

There are obviously so many challenges for women in the work place, and it’s easy to blame the lack of female leadership on those external factors. I have certainly been guilty of that myself. But, Sandberg’s discussion reminds me that I need to accept some personal responsibility when it comes to my future as a leader and role model. The first step for me, and others, is to believe I have what it takes to be a leader and to live up to that standard. The second step is to challenge those gender stereotypes, glass ceilings, and other obstacles in the workplace. Reform in the workplace, and even at home, can start with us. 

The change will not be immediate, and my generation might not reap the benefits directly, but it will come eventually. Research shows that women are already closing the education gap, with record numbers of women entering undergraduate programs as well as MBA and PhD programs. That is definitely a step in the right direction. Progress can be slow, but I am committed to doing what I can to push it along. 

If you want to learn more about Sandberg’s “ambition gap”, here are some links you might want to check out: 

http://technorati.com/women/article/facebooks-sheryl-sandberg-discusses-women-lagging/

http://www.thestar.com/article/1127386—facebook-s-sheryl-sandberg-says-women-burdened-by-ambition-gap-is-she-right

http://www.nytimes.com/2012/02/05/business/sheryl-sandberg-of-facebook-staying-on-message.html

http://www.forbes.com/sites/samanthaettus/2012/02/02/sheryl-sandberg/

Feb 08

Good news, finally!

Good News, Finally! 

Today’s TechJournal South was full of good news, which is a very welcome change of pace when most of what we have heard and/or seen from the media for months (maybe even years) has been negative. The first bit of good news is from the YPO Global Pulse Index, which indicates that the US rebounded sharply in the fourth quarter of 2011, climbing 4.5 points to 62.2 – the highest level of improvement in the history of the survey. The YPO Employment Confidence Index for the US also rose 1.5 points, also a record. These latest indices are very promising for businesses and job seekers. 

The second bit of promising news came from PwC US’s Private Company Trendsetter Barometer , which echoes those signs of growth and promise. The barometer reports that 78% of executives surveyed expect positive growth over the next 12 months, with double-digit growth expected by 35% of executives. Those surveyed also expect to hire more, with 54% planning to add to their workforce over the next 12 months. 

It’s about time to hear some good news for a change and kudos to Techjournal South for being the bearer of such news. Here at Crossroads PR, 2012 has been off to a strong start and I am optimistic that trend will continue for us, and our clients. What do you think?