Investors and executives that decline to disclose numbers in deal announcements like funding or M&A are by extension denying their business a chance to capitalize on the biggest marketing opportunity they’ll ever have
Corporate transactions – like rounds of funding or M&A transactions – are the biggest news opportunity most companies will ever have. It’s a unique chance to earn a place in the news, which in turn provides an opportunity to talk about the problem your company solves.
Yet there’s a tendency I’ve observed over the last few years that suggests companies are increasingly reluctant to disclose the value of those transactions. If you don’t disclose the numbers, you risk having the news passed over by busy reporters.
To say this is a missed opportunity is an understatement. For the vast majority of companies, the only announcement that will top a corporate transaction…is another corporate transaction of greater value (or a terrible crisis).
Consider the following scenarios:
- An early-stage company secured a respectably sized early-stage round. They wanted to put out an announcement that skipped the funding amount. Announcing the money was “pedestrian” according to one executive. Fortunately, the team was able to talk the company out of it and put the dollar figure in the headline. They subsequently earned great coverage – in a noisy vertical – that would not have been earned otherwise.
- A private equity firm acquired a maturing startup. It bought out the old investors and invested additional funding to fuel growth. While most VCs wouldn’t miss a chance for news coverage, PE tends to be secretive and reclusive. They wound up pitching a watered-down funding announcement that several reporters flat-out said they couldn’t cover without a number. Meanwhile, their largest competitor makes headlines every week.
- A later-stage startup secured growth funding but didn’t want to announce the round. There were a lot of reasons why, but none of them were good. Here again, the team was able to convince the company to change its mind. The coverage was fantastic because there was a number and because at that point in time, the number of funding announcements had slowed under the economic circumstances at that time. News is, by definition, something that defies expectations.
- A maturing startup acquired another vendor in a different category. This would expand their total addressable market (TAM) and complement their existing offering. However, they didn’t even want to disclose the basic 5Ws which are the building blocks of any announcements and news story. They pushed back so hard on one planning call it was borderline combative. The coverage was lackluster and it’s a shame because the company lacks name recognition outside their immediate customers.
Over my career, I’ve worked on internal and external communications – both on the in-house and agency side – for dozens of corporate transactions. This includes virtually every type of deal including funding, earnings for public companies, M&A on the acquired side, M&A on the acquirer side, and even a divestiture.
If there’s one thing I’ve learned about the newsworthiness of these communications, the ability to earn coverage required disclosing the value. Money is a heuristic for importance. Money demonstrates an independent third party sees value in your business and is willing to risk millions of dollars to prove it.
Corporate transaction announcements are a chance to:
- Build a brand and reputation;
- Motivate employees;
- Attract talent;
- Get customers excited;
- Introduce your company to new prospects;
- Reinvigorate conversations with lost opportunities;
- Demonstrate viability;
- Showcase third-party validation;
- Tell the world why you matter; and
- Cut through the clutter in a nosy market.
Investors and executives that decline to disclose numbers in transaction announcements are by extension denying their business a chance to capitalize on the biggest marketing opportunity they’ll ever have.
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Image: DALL-E, “mysterious back-room deal-making in the style of van Ghoh”
