Detour Before the Exit

By Lisa Allocca

Lately I am asking venture funded or bootstrapped companies, “So, what’s your exit strategy?” Usually I get some type of answer but this year, my question is being answered with “I am not sure anymore.”

Isn’t the whole point of investing in a high tech start-up is to make money during an exit? I think many companies are taking a detour in 2009 before they drive to the exit.

We are working in interesting times. Many of the companies that I know hit their revenue targets this year or came very close. This represents high double digit or triple digit growth – success even in the best of times.

Many are forecasting very conservative numbers for 2009 which is prudent in this economy but what I am finding to be very inconsistent is the internal battle on how the marketing dollars should be allocated in the coming year.

For the most part, everyone agrees that tactical public relations and lead generation programs are absolutely necessary to help the sales team shorten sales cycles. But what I find interesting is that many companies have not come to agreement internally or with their board on what should be done about positioning the company for the longer term.

Basically, it comes down to how much of the marketing budget should be allocated to fund strategic programs versus the tactical programs. It is the age old question – which comes first, the chicken or the egg? Can you really do one without the other?

Ultimately customers want to buy from firms that they perceive as viable over the long haul. If you drop your thought leadership and content marketing programs, will that visibility remain? Will your lead generation programs work if you’re not visible in the market?

You need to do both. Strategic public relations can help you raise venture capital, and it also can help position your company for the exit.

Stay tuned for specific ideas on how to cut back but still keep your strategic visibility.