Craig Corbett is a Partner at P & Co at Publicize, a global communications and PR firm for global visionaries and high-impact organizations.
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The early stage venture landscape looks very different today than it did 10 years ago. With record investment levels year over year, round sizes and valuations skyrocketing, and hundreds of new microfunds being launched by experienced operators and celebrities, traditional VCs are having to do a lot more legwork to secure their spot on the cap tables of the next generation of potential unicorns.
With more money chasing fewer opportunities, making deal sourcing trickier, VCs are having to up their PR game. VCs need to sell themselves to founders who are much more interested in finding a team that can help take their company to the next level, rather than just a pair of deep pockets.
With this in mind, it should come as little surprise that investors are increasingly eyeing journalists to join their firms, armed with a Rolodex of impressive contacts, years of specific industry knowledge and, of course, a deep understanding of communications and storytelling.
Firstminute Capital recently hired Michael Stothard, former founding editor of Sifted, as a principal at the fund. SignalFire chose TechCrunch’s former editor-at-large Josh Constine as its principal investor and head of content. And CNBC’s Chrissy Farr moved into health tech investing last year.
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The journalist-to-investor career path isn’t new. Michael Moritz, a partner at legendary VC fund Sequoia Capital, chose to make a career change into VC after he was bureau chief at Time magazine in the late 1980s. Moritz was, by his own admission, “poor at math and couldn’t tell a voltage regulator from an amplifier,” but his investigative training and focus on finding “obsessives on a mission” ultimately helped the firm find the startups that would eventually become Yahoo, PayPal, Google, Klarna and Stripe.
So let’s delve into why journalists are such attractive hires to VCs in today’s hyper-competitive, values-driven venture landscape.
Journalists’ Rolodex can help build startup (and VC) networks.
VCs are only as strong as their connections. To really accelerate a company’s growth, investors need to put founders in touch with the right people with experience operating at the right growth stage.
Journalists and editors receive, on average, 53 pitches from startups per day, as well as countless invitations to talks, conferences, podcasts, etc. They work with a widespread of people in different positions from different businesses. In short, journalists aren’t lacking in the kinds of connections that are invaluable to a firm’s portfolio.
Whether it be making a warm introduction to potential clients or partners at other tech companies, knowing the right editors to pitch a funding announcement or using their extensive LinkedIn reach to help find technical experts or hires who can take a product to the next stage, journalists enjoy a unique position at the epicenter of the tech industry.
And outside of offering value to the portfolio, there are clear benefits when it comes to deal sourcing, too. A simple “I’ve moved to VC” post on social media will drive a lot of traffic to their new firm and likely encourage a wave of invites, requests and pitch decks from startups that had previously followed them for their reputation as a tech journalist.
Due diligence comes naturally to journalists.
As values and ethics are pushed to the forefront of the tech community, LPs (limited partners) are more careful about where they put their money, and startups are more careful about who they accept it from. These days, VCs not only need to be values-driven, but they must have people on their team ensuring that their investments are on message with those values and that all their stakeholders are towing the party line.
The ethical code of impartiality that journalists are bound by, and the “no BS” nature of their training, allows them to conduct due diligence in a different way than other investors. Unlike many VCs, journalists aren’t necessarily from a financial background — they won’t see founders and startups as purely numbers and projections. Instead, they’ll concentrate on the story, the people and the potential beyond dollars.
With this unique skill, journalists can sniff out the opportunities that regularly fly under investors’ radar as well as highlight the stories that might be too good to be true and could cost a firm in both funds and reputation.
Journalists know how to pitch your portfolio.
Almost half of founders consider a value add as more important than the portfolio and brand of a VC firm, according to a study. And yet 65% of those founders rate the support provided by VCs as being a low value add.
Founders don’t want investors to throw money at them and then be absent from the company-building process. And more than just smart capital, founders are increasingly looking for VCs that offer full-stack services, especially in areas that startups typically can’t afford, such as legal support or PR and communications.
Journalists’ knowledge is valuable because they have a beat they’ve worked for years and are experts in particular themes and technologies. They’re also savvy enough to know what can be considered a trusted resource and know from experience what tactics are successfully met by audiences and what falls flat.
Knowing the lay of the land before jumping in goes a long way to assisting startups in creating smart and effective communications strategies. And considering that a startup’s story is central to its growth, having a journalist be the one to pitch them to the world will naturally be more beneficial.
In today’s values-driven ecosystem, journalists are putting pen to paper, but in a different sense. The expertise, storytelling focus and networks they bring to the table are not only huge assets to firms; it significantly enhances the value that firms can offer outside of capital.
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Author: Craig Corbett, Forbes Councils Member
