Tip #98: Press

Tip 98: Press. Probably 50% of decks have some attempt to prove this company is going to be successful because it had positive press.

In some cases, this can definitely be an attraction. If you’re a consumer / retail company, being Oprah definitely helps us believe you have some potential.

But note that, like testimonials, press articles and public exposure have negative implications that you might not be thinking about.

1)      We know that local press sources are not great judges of the potential of companies. Local reporters often want to “cheerlead” for local success stories, and aren’t actually investors, so we don’t put much weight on their views

2)      We know that media often just recycles your press releases. Some do it word for word; others try to turn your press release into a real story; but either way, we know what’s going on here – and it isn’t dynamic viral marketing from an engaged customer following!

3)      You were featured in the Charleston Post & Courier’s “greatest startups in Charleston”? Congratulations. Your Silicon Valley competitor is featured in TechCrunch, CB Insights, and the Wall St Journal. Not so great.

4)      You have nationwide exposure, but you only have 15 paying customers and $50k of revenue? Hmm, this business is not going to grow well.

5)      Did I mention that 50% of pitches talk about their press? Hardly a compelling differentiator.

6)      And lastly, since your TechCrunch article, all your competitors and potential competitors know about you. That “first mover advantage” you stressed as your key differentiator isn’t looking as powerful now, is it?

So beware again that press coverage is not 100% impressive to potential investors.