Beyond Compliance, Communications Prep For Emerging Growth Companies

This article was originally published on Forbes.com on September 13, 2023

RACHEL KULE, PURSUIT PR

Forbes Councils Member

Forbes Communications Council

As U.S. markets show signs of a strong finish to 2023, companies eyeing a public listing are going to need to stand out from the increasingly crowded pack. For executives, that means doubling down on their corporate and brand equity. Effectively communicating a robust environmental, social and governance (ESG) program, as well as staking out ground on corporate reputation and culture, will go a long way to attracting that vaunted capital.

The upswing in listings is evident with 55 companies achieving a successful raise so far this year versus 71 U.S. IPOs for all of last year. And they’ve raised nearly $10 billion already, 25% more than 2022’s total of $7.7 billion.

While there are still significant economic uncertainties, including when the Fed will stop raising rates to tamper inflation, companies seeking a public listing will need to have more than their numbers in line and compliance boxes checked.

As billionaire investor Mark Mobius recently said during an interview at the Greenwich Economic Forum in Hong Kong, ESG and “C”—corporate culture—feature prominently in his evaluation of a company’s prospects. It’s not just about return on equity, future projections and competitive outlook anymore. And standard metrics like backward-looking price-to-equity ratios are completely out of his picture.

So how does a company communicate these metrics that often defy simple numeric calculations? Establishing and maintaining a solid corporate reputation remains first and foremost the key differentiator.

Corporate reputation is how the public—and increasingly investors, business partners and their own employees—perceive the company. Stakeholders want to know more than just what a company stands for in terms of its mission, vision, and values, but how it relates to creating a positive work environment and improving the world we live in. Their interests include the overall brand, products, and services, as well as how corporate activities impact the environment and work conditions.

A strong C-suite communications strategy not only articulates these points, developing goodwill in the process, but also generates positive brand awareness and industry relevance. The “chief reputation officers” of the Company (the C-suite) have a major role in establishing and maintaining this reputation.

Internal and external surveys are a common way of assessing reputation. Increasingly, however, taking the pulse of public opinion through advanced open-source analytics provides a richer and wider view of what is being said, by whom and how much it matters. Rather than taking a snapshot in time, ongoing monitoring can expose sudden changes in sentiment, especially as a public listing nears.

On the ESG side, policy statements are no longer enough to establish a firm’s integrity in markets and stakeholders. Specific actions that highlight how a firm deals with the worsening climate crisis, improves peoples’ lives, betters society in meaningful ways, creates a more inclusive work environment and highlights how they govern corporate affairs all need to be clearly expressed.

Addressing how a firm’s programs avoid greenwashing of environmental efforts, for example, is a good way to establish credibility. Active outreach on social and workplace issues, with concrete examples of how the firm overcame challenges and succeeded in meeting its goals, will be instrumental in building trust and confidence.

Communicating succinctly, in the right venues, at the right time, provide the best chance for building engagement as a funding event approaches. This can include the quality of newsletters, increasing earned and owned media presence, and expanding executive thought leadership programs to increase visibility and establish industry eminence.

While compliance remains the foundation for any capital raise, brand and corporate equity is the structure built on top of these core financial and business processes. In an interconnected world where information travels instantly, that equity is more valuable than ever.

EGCs (emerging growth companies) with reputations of consistently stellar culture and bulletproof street credibility are best positioned. Those that focus on these core issues now will stand out against their peers in the race to grow market share and new customers.

HBO is the Epitome of Brand Staying Power

Well, it finally happened. Consumers officially lost the standalone brand of HBO and are now left with just Max. Warner Bros. Discovery (WBD) maintains HBO has achieved its “maximum reach”. But who is Max and what did they do with HBO? We wondered this while downloading the new Max app and eagerly awaiting for the series finale of Succession to load.

Upon opening Max, we immediately missed HBO. We were accustomed to seeing the HBO logo when turning on the screen. Without it, it just seemed barren. It makes us wonder why Max would discard such a recognizable and prized possession of a namesake rather than put it front and center. Understanding that consolidation necessitates integration, this decision is confusing.

After all, HBO was the original premium “it’s not TV” content provider. Founded in 1972 by Time Inc., the company has been streaming content direct to TV’s (initially through bulky rooftop antennas) for more than 50 years. The family “home box office,” replaced by the abbreviation HBO, is widely considered to be the ultimate in premium content, and the price reflects it.    

Many people likely feel a connection to this brand. Some of the best characters and shows have come from HBO. From Sex and the City, Curb Your Enthusiasm, to The Sopranos.

HBO is the epitome of a classic brand — what Nike is to sports apparel. It stands on its own, with television series, comedies, and movies that have become embedded in our culture from Larry Sanders to Larry David. Some, like Game of Thrones, are revered with cult-like status. In other words, you get what you pay for when it comes to their content.

If a brand is more than the sum of its parts, then what role does HBO play now within Max?

Max has a steep hill to climb to establish itself as the overarching brand. It will be important to lean into HBO whenever possible.

At present, HBO is still being promoted as its own hub within Max. It is also still being offered at an ad-free premium. After the highly anticipated Succession finale, we learned that from classics to new hits, consumers are in store for an entertaining start of the summer with more content. Just when we thought we lost HBO, we are getting more. 

And what will Max become? Does the combination of Discovery + HBO position Max to become the next Disney+?

It’s too early to tell how it will play out from a brand standpoint. Technically and financially it makes sense to offer a unified viewing experience.There may be reboots pulled from nostalgic content, classics and fan favorites. 

Many in the media industry as well as consumers are eagerly awaiting the answer to these questions. 

While we wonder how the marquee brand will evolve, we’ll be tuning into the new seasons of our favorites, especially Curb which we’ve been rewatching from season 1 in recent weeks. It’s going to be pretty, pretty, pretty good.

As "Succession" Shows, A Strong Brand Makes a Difference in Deals

As fans of the hit show “Succession” know (spoiler alert if you haven’t seen recent episodes) Logan Roy, scion of the about to be sold media empire of his name, suddenly passed away. This leaves the three siblings, who have been vying for the CEO position, left without a defined succession plan - a longstanding source of conflict with their father and amongst the siblings. All the while, a deal to sell a portion of the company to billionaire acquirer and hipster tech bro Lukas Matesson is still pending. Seeing an opportunity, Matesson tries to negotiate down on the price of the deal claiming he’s the bigger brand now that the company’s leadership is undefined - and, he wants it at a discount. 

As both parties seek the upper hand, there is a competition to demonstrate brand equity. Brand reputation is the difference between winning and losing - outlasting your competition or succumbing to them. In an unexpected twist, when son and heir apparent to the Roy empire Kendall Roy finds some dirt on Matesson, he flips the script and aims to squash the deal with regulation or buy out Matesson’s media conglomerate instead.

The story is unfolding while we begin what may be a long hot summer for companies looking to raise capital or be acquired. In parallel with Succession, companies with the strongest brand recognition are likely to earn the trickle of capital that’s still flowing. 

Companies need to stand out in both good times and more challenging times. 

Most recently, public markets over the last four quarters, combined, didn’t break $10 billion in IPO proceeds. That pales in comparison to the $35 billion raised in the fourth quarter of 2021 alone. M&A activity isn’t faring much better. Estimated deal values are coming in at barely $1 trillion for all of 2023 versus last year's over $4.5 trillion. The number of total deals are also projected to fall some 75% from last year to just over ten thousand, from more than forty thousand in 2022.

Stronger brands that earn more capital are able to withstand a drier period of funding, and we are seeing that play out as some companies get acquired and others go bust. It is unpredictable when the “window” will open again but when it does you want to be prepared and building a stronger brand will better position you to compete in such an environment. 

Brand identity is also more than just the sum of its parts. Take Apple, for example, with a bevy of gadgets that span phones to desktops to watches and increasingly services from streaming to personal finance. Each product needs to be strong and have a distinctive image and yet Apple as a brand has an overarching lifestyle image. 

The importance of a consistent voice, as in the fictional series “Succession” where brothers Kendall and Roman are pitted against each other over control of the flailing company theri father built, is also critical. A unified brand voice coming from the top, while at the same time allowing leaders to have unique and distinct perspectives, is a challenge many real companies face as well.

Bed, Bath, and Beyond, once a key anchor of strip malls across the United States, had to file for bankruptcy recently after trying to sell their own branded products. Turns out customers wanted good prices for known names and sales plummeted. 

Not only did the business strategy destroy credibility with its key suppliers who were kicked off store shelves, but the company lost sight of its mission, brand, and message and they could not attract a bail-out. Even if a company stays true to its overarching vision, day-to-day sales and revenue matter far more than lofty statements. 

With easy money all but gone, and Fed rates likely to stay higher for the time being, companies need to double down on what they do best – stick to their brand and focus on their business mission. These are the firms best positioned to thrive despite a parching summer investment drought.

How Communications Can Raise Eminence And Earn Capital - Forbes.com

This article was originally published on Forbes.com on February 22, 2023

Rachel Kule, Pursuit PR

Forbes Councils Member

Forbes Communications Council

A company preparing to raise capital needs to be very clear on who they are, what they stand for and how they are going to achieve their corporate mission. In a recent Forbes Expert Panel, I advised that it is essential for C-suite leaders to dig deep and understand not only what attracts investors but how the company will be evaluated against its broader goals. “Ultimately,” I wrote, “being clear on these aspects will enable the company to communicate its relevance and value.”

This applies to venture capital (VC)- and private equity (PE)-backed companies considering a public offering via an initial public offering (IPO), special purpose acquisition company (SPAC), or merger and acquisition (M&A) transaction. The exit is an important milestone—and it is also just the beginning. Once public, the company needs to sustain both communication and performance.

With markets as uncertain as they are, proactive communication must be a constant. The need to earn and sustain relevance becomes even more important. It is easy to communicate during the best of times, but it is critical during challenging times, as I’ve written about before.

Use the key elements of a strategic communications plan for capital markets.

Companies need to be able to articulate their marketplace position from a total stakeholder perspective. This starts with a strategic communications plan based on answering six main questions.

Who are you as a company?

Investor audiences expect a clear and succinct summary of the firm. Experience and knowledge of the business have to be honed into a description that is accurate and meaningful, beyond the details of what the company does or the products and services it offers.

What are your values as leaders?

Corporate executives have extensive professional experience and unique knowledge, but credentials don’t always differentiate a company from its peers.

Executive eminence has the potential to transform a company’s reputation. For example, thought leadership programs can result in new business leads, accessibility of new investor capital, positive client feedback, increased new hire interest and employee retention, and more opportunities for strategic partnerships.

Investors are also interested in the long-term viability of a business. The sustainability of the business is reinforced by the leadership’s ability to communicate operational excellence and strong corporate governance.

What does the company do?

A strategic communications lens is essential to developing an overarching company story. It requires a deep understanding of the nuances of the business, as well as connecting to the bigger picture of stakeholder perceptions and needs. As the company matures, the C-suite, department leaders and staff all need to be able to articulate exactly what the organization does as a whole, in addition to its other services.

What do you stand for?

Corporate mission must go well beyond just a website statement. To be most effective, it needs to live and breathe throughout all corporate communications. It needs to reflect the leadership’s core values, to become an authentic part of the guiding principles that advance the corporate vision. Otherwise, it will lack substance or appear unattainable. Investors expect a transparent mission—and strategic corporate communication creates such clarity.

What is the company’s vision?

A steady vision remains essential. One that is actionable, realistic and backed by solid traction generates confidence in the company’s overall viability. Vision alone cannot carry the company forward. However, it plays a strong role in articulating the connection between the business of today and future prospects.

Why does your business matter to the market now?

When it comes to going public, relevance has a strong bearing on private and public investor perception. Be clear on the demonstrable impact you are having on the market and why it matters now. Consider:

• Alignment of company performance with its purpose.

• Business model strength—including both revenue and profitability, or the ability to demonstrate a path to profit.

• Communicating company value—both perceived and real value for key stakeholders.

Corporate positioning necessitates a total stakeholder approach.

A strategic communications plan, with corporate positioning at its core, takes time to unpack, develop and elevate. The answers to the questions evolve along with the company and need to be revisited often. The most effective plans often also incorporate an ongoing executive thought leadership program that helps promote the firm’s latest insights and achievements.

A comprehensive assessment also needs to transcend internal perceptions. Investor, employee and partner expectations matter. For example, Stripe recently communicated their IPO intentions to employees along with a timeline for a decision and alternatives for cashing out. By employing a total stakeholder approach, the most relevant information can be shared based on understanding internal and external beliefs and interests.

Maintaining a strategic communications plan is a constant throughout a company’s growth journey—whether private or public, it requires fresh eyes, genuine scrutiny and refinement. It must be ongoing and not limited to key milestones and inflection points. The time to start is now.