As a tech startup, you’re probably intimately familiar with the ins and outs of the world of funding. If you’re past Series A, B, C funding, or are looking to what may be your end goal, you’re familiar with what might be involved in taking your company public through an initial public offering (IPO).
Or perhaps you’re looking to jump in on a booming trend in the investment industry, special purpose acquisition companies (SPACs), which have raised more than $100 billion in public offerings as of May 2021.
If your startup is using a SPAC to go public, it will undergo a very different process than the SEC’s regulated process for an IPO. SPACs begin by raising capital as a publicly traded company under their own new business name, without your startup attached, as a “blank check company” whose sole purpose is to acquire a business to bring it to market.
Then, it announces your startup as the company it wishes to acquire to take public and early investors can hold or liquidate their holdings if they do not wish to be aligned with your company. Once it hits the market, the ticker will convert to represent your company as a merged entity with the SPAC.
There are big advantages to going the route of a SPAC, and not just accelerated timeline to IPO or the estimated additional 20% of sale price for the startup compared to a private equity deal, according to Investopedia. Unlike an IPO, where a company must adopt a silent period in anticipation of a listing, media opportunities and brand-building campaigns are not just approved but highly necessary to make your SPAC successful.
As you put together a plan with your tech PR agency to prepare you for a SPAC, follow these guidelines to make sure you come out on top once your company goes public. As always, think through these things from the lens of your key audiences: your employees, investors, and reporters for your industry and region and those covering the financial sector and funding.
Announcing your deal
IPO listings face strict regulation to limit unfair promotion of it’s listing prior to it’s opening on the market, but SPACs face no such limitation. In fact, it is very much best practice to communicate the transaction your startup is making and broadly share the news of your intent-to-acquire announcement.
This moment, when your company is now publicly aligned with the SPAC, can be a thunderous media moment for you. It signifies the start of the acquisition process and kicks off a timer for the purchase and listing to be complete, so your team should maximize the moment and seek out extensive media coverage at this phase. Ideal targets for coverage include reporters who cover capital markets as well as the industry and trade outlets you’re aligned with for other news about your company.
You’ll also want to seek local media coverage and business journals to amplify your new status and build excitement around the opportunity for your company, such as the Austin Business Journal or the Austin American-Statesman’s Business & Tech reporters.
Messaging here should focus on the benefits of the transaction and its terms, as well as taking advantage of media coverage to highlight your company’s unique propositions and the things that make you a worthy investment against your competitors. This will be important to share internally, as well, so that employees and other stakeholders are aligned with your messaging and can help you tell that story to great effect.
Plus, there’s the added benefit of what this buzz will do for the success of the offering. As Kevin McLaughlin for O’Dwyers notes, “from a deal perspective, the resulting media coverage offers momentum and added validation to help investors on both sides of the acquisition come together to get stakeholder buy-in and proper approvals required to close it—which could take one to three months, or sometimes more.”
Marketing your deal
Gina Bauman, SVP of Marketing and IR at IVP (a VC firm), stresses the importance of this phase by its distinction from IPOs. The SEC permits companies to essentially sell to investors via it’s communications during the time between the SPAC alignment announcement and the day you go public, and it should be capitalized on. Just make sure to keep in close alignment with your investor relations (IR) firm to make sure you’re following Regulation Fair Disclosure (Reg FD) rules to not jeopardize your deal.
Focus your media efforts here to build on the excitement created with your deal announcement while the investors and your executives are finalizing details of the deal and aligning with shareholders:
- Investors (both current and potential), financial analysts and trade media – These groups need to hear the ins and outs of your process and can include some projections. They’ll want to hear about your growth and will be captured by rich storytelling of business acumen and what makes you uniquely positioned to succeed. You’ll also want to be sure to speak about the team behind the SPAC – who their founders are, what their relevant experience is, and their success.
- Thought Leadership – the leaders of your organization should be positioned keenly at this point to represent your industry and verticals with excellence and demonstrate the value of your company. These and other news items should be identified in advance and monitored for rapid response as the news cycle unfolds, so that both your company and its leadership are covered as leaders in your industry while speaking to both the acquisition and on topics and responses relevant to your work.
- Think “get out the vote” for shareholders – these individuals will need to make a decision about the future of your company, so thoughtful messaging campaigns built around participating in the voting process and showcasing thought leadership and milestones for your business will be crucial here.
Closing the deal
Once you’ve reached this point, the fanfare is a bit reduced to the opening bell of an IPO company as the SPAC was already set up with an IPO before the acquisition occurred. However, on opening day your merged company will have a new ticker symbol representing the organization and will still be an event worthy of media attention for Wall Street as well as your local and industry press. A hometown company hitting Wall Street is always exciting for local media coverage and will be closely followed by the trade media which regularly cover your company.
Operating as a public company
You’ve made it! Now that you’re publicly traded, this phase requires a new playbook for the PR of a public company. You’ll want to keep up to date on all your goals and metrics and make sure you’re meeting what you articulate as key milestones. This will be important to shareholders and will make for meaningful news in future PR campaigns.
The SPAC process is IPO at a sprint, but can yield great results from your company. Utilize effective PR, particularly with the help of a tech PR agency who caters to your specific needs and knows the industry inside and out, to maximize your coverage and make the most of your company’s biggest achievement yet.
Does your tech startup need PR help?
The Swyft team specializes in helping tech startups soar to new heights and bring media attention with them. If your startup is considering a SPAC in the future, or just wants to accelerate its revenue and brand awareness, feel free to contact us!