With millions in expenses, it’s no wonder that many companies think twice before going public and ultimately decide “no thanks”. The companies that do go public take into consideration a long and tedious process that require large expenditures on law, finance, registration and more that are all part of the deal. In the end the benefits are clear: prestige, legitimacy, growth potential, recruiting talented personnel and expanding access to capital and fortune. So a minute before going public, the celebration and Champaign, we went out to check what would be the best way to prepare for such a process and is it recommended to start it with branding as a first step.
The PO forecast for 2017 according to CB Insights is high and currently there are approximately 369 technology companies on the POP pipeline for 2017. This does not include industrial companies or other markets. According to Ernst & Young,” we have a strong momentum from Q4 2016 so that all PO activities have risen by 25% in comparison to Q3”, says Martin Steinbach, Executive VP for PO activities at the company. Steinbach adds,” the three leading industries for 2016 were: industrial, medical and technology markets. The PO forecast for 2017 is positive and should push the technology market forward”.
The above facts only reiterate the harsh competition, diversity and aspirations of young entrepreneurs from all over the world. It seems as though everyday there is a PO story in the news and that the PO market is so saturated that all an investor needs to do is lay back and be entertained by ambitious entrepreneurs seeking finances. With such great opportunities, the main way for an investor to choose from the sea of opportunities is by intuition and an emotional reaction to a good story. The question is how can one overcome the sea of competition and be the one that’s interesting and attractive for a potential investor?
According to a global survey conducted by Ernst & Young, 59% of investors have made their decisions not based on factual numbers but rather mostly based on a strong brand. A brand therefore should serve as a beacon of unique, exciting, fascinating and even emotional messages. Transmit a solid brand character and create a unique added value that is above all. A brand should convey to potential investors the corporate culture, vision and strategy of the company.
In theory all this is great but what do you do during the “silent period” , you know the one that starts from the point a company declares the intent for PO that goes on all the way to approximately one month after the PO. During this time all communications and reporting about the company’s activities is strictly prohibited?
Well according to regulations, marketing activities including the strengthening of your brand is in fact possible during this period of time.
Ferrari has noted great branding activity and that during the eve of their PO that took place in Q2, 2015. Mr. Sergio Marchionn, Brand Director stated that he plans to separate the Ferrari brand from the company’s mother brand – Fiat Chrysler. Mr. Sergio Marchionn planned to create an exclusive community that where luck to own the new brand and offer targeted services that complement their status such as: elite club memberships and hotels. This will increase cooperation between Ferrari with additional Italian brands. As a result leading Italian designers where integrated into the project in order to add their “magical touch” to the product and all this the eve of the PO.
Google too has launched a revolutionary product in great proximity to their PO with the goal to strengthen their stand as a global provider of ultimate user experience.
The Missed Opportunity
A broad way of thinking is part of every brand. However even leading companies miss their opportunity sometimes… a well-known story of missing out on an opportunity to strengthen a brand and a company’s market position by none other than Jack Ma the founder of Alibaba.
In June 2014 a request by the office of Mr. Jack Ma has been placed to purchase Guangzhou Evergrande FC , one of the leading football teams in China. The value of this deal was estimated at 1.2 Billion Yuan. The same week a similar request was proposed by Steve Balmer to purchase the Los Angeles Clippers – NBA for 2 Billion Dollars.
Alibaba is perceived by the USA market as a logistic company with an online shopping portal. It would have made a great difference had Jack Ma placed a bid for the Los Angeles Clippers rather than for the Chinese football team. Such a bid and purchase would have placed his company, Alibaba in the heart of the American consensus and would change the US perception of his brand overnight.
Branding processes are welcome any time and at any life stage of the company. Branding is dynamic and will constantly change according to the company’s needs at that specific time. In the part, branding was associated with big companies in order to convey power and strength. Today, those who understand the power of a brand, will develop specific brands based on specific company’s needs such as: specific product, a line of products, sale, specific market segmentation, prior to a PO, launches and more. A single story can determined the value of a company or product at any given time.