VC, M&A and the Intersection of Tech PR

Each month the ARPR team dives into a specific subject matter at a lunch & learn (or beer & learn and biscuit & learn – we do it all!). In May, we went to DLA Piper’s Atlanta office and met with four partners who specialize in early/growth stage technology, mergers & acquisitions and transaction financing to pick their brains. Why? As a PR firm that specializes in growth stage, mid-market and enterprise technology brands, we’ve helped six clients plan for and strategically announce venture capital funding, PE purchases and M&A’s in the past 12 months alone.

The DLA Piper partners we met with, Kevin Gooch, Gerry Williams, Brian Gordon and Jeff Leavitt discussed the anatomy of a deal, and all the legal, financial and operational work that goes into an M&A transaction before we (as the client’s marketing firm) get a phone call that the transaction is pending and our client is ready to #makenews. Here are three top takeaways:

Cybersecurity is Hot. HealthIT is Cooling.

Fueled by an increasingly insecure world, the cybersecurity and infosec markets are hot beds for VC/M&A interest. At ARPR, we’ve even witnessed this increase in deal volume. Two of our cybersecurity clients RunSafe and Ironscales have raised rounds in the past year.

On the flip side, after a wave of Obama-era investment, some VCs are hesitant to invest in healthcare/health IT due to the uncertainty of healthcare legislation. While early and growth stage Health IT companies might have difficulty raising a round, they have a good shot at getting eaten up by bigger vendors, healthcare providers and even payers. Healthcare Dive explains “A confluence of factors is driving the pairings-up, including exhausted Meaningful Use funds, a tapped EHR market and shift toward consumer-centric models.”

It takes a village at each stage of growth.

Each stage of a tech company’s lifecycle requires a unique set of players, talent and expertise. We often see this play out when the technical founder of a company is no longer the right fit to lead his or her startup in its second phase of operational and business growth. But this also applies to the company’s vendors and partners.

For example, at DLA Piper, Mr. Leavitt focuses on venture/early stage companies alongside Mr. Gooch, who works with companies to ensure that sufficient capital is available for organic growth and to close an acquisition; but then passes them to Mr. Williams and Mr. Gordon once they are growth stage and seeking to exit. And once an exit is imminent, a member of the team is required to assist with the positioning of the company fora sale and the negotiation and documentation of the sell-side transaction. At ARPR, we often get clients who spent their first few years of existence working with a PR agency that served at a smaller scale. Once the company reaches a level of maturity, they need an integrated communications agency that understands the nuances and dynamics of the new playing field.

“PR is critical.”

Which leads me to the final key takeaway. Our team was pleasantly surprised to hear one of the speakers tell us that “PR is critical” in the M&A process. We asked them, “in your experience, how do buyers find companies they’re likely to acquire?” And the answer was – you guessed it – PR. Many brands’ exploratory process starts by consuming thought leadership content (byline articles, data reports, trend stories) that are authored by or feature a potential acquisition target.

The partners at DLA Piper have also seen how PR has helped ease closing conditions. As a result, they’re seeing more venture capital money raised (seed, series A, B, etc.) being spent on marketing – and not product development, which means today’s tech brands are leveraging the power of PR earlier in their lifecycle in order to reap its long-term benefits later.

Big thanks to DLA Piper for sharing their time and expertise – be sure to follow them at @DLAPiper and @DLAAccelerate. Interested in more? Download this whitepaper to uncover some simple and methodical PR strategies that a founder looking for funding, or a CEO looking to sell or take the company public, can deploy to obtain a favorable valuation.

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