The authors envision four likely audiences - "an entrepreneur who is burning with a hot idea", "an existing small business owner who runs into a cash-flow problem", "a rapidly growing firm that needs substantial amounts of cash to build factories and open new markets" and "a large company that is in deep financial risk."
This is quite a large group of audiences to cover - in critical situations at that - in 240 pages and underscores the lack of focus that will likely make this book of interest mostly to people seeking to understand the basics of fundraising and the capital markets.
The opening two sections of Attracting Investors - comprising the first 171 pages - are devoted to describing the capital markets and various sources of funding from angel investors to VCs to the public markets.
The sections are informative, but feel largely like a textbook review chapter, complete with frequent repetition of key points. One wishes that these could have been integrated with the later marketing section in the form of more extensive case studies of companies in the earlier stages of fund raising. Of course, this would be a more difficult exercise than the authors' approach of relying on cases largely covered in the public record.
For entrepreneurs and established companies alike, the value of the book lies largely in the third section - 'Tools for Attracting and Keeping Investors and Lenders' - which, unfortunately, only occupies the final 44 pages of the book. The marketing framework laid out in this section focuses on the authors' 'Sustainable Marketing Enterprise Model' comprised of nine elements: segmentation, targeting, positioning, differentiation, marketing mix, selling, brand, service and process. The structure is well thought-out and is applicable across the authors' four audience groups.
Again, rather than supplying specific tools and resources, this section will at best serve as a platform to stimulate entrepreneurs and others into thinking about how they position and market their companies to investors.
As an IR professional, I was impressed by the emphasis placed on transparency and full disclosure as a key selling point for winning the minds and hearts of investors.
It is refreshing to see the marketing role of investor relations' given its due; in fact, it occurred to me that the book could serve as an excellent primer for people getting started in the investor relations field.
As a basic introduction to capital markets and the fund-raising process, Attracting Investors will certainly arm newcomers with an expanded general knowledge and vocabulary. The marketing principles are solid ones and apply to fund raising at every stage of a company's existence from 'bootstrapping' funds from credit cards and relatives, to the IPO and the mature company's ongoing investor relations programme.
The book suffers, however, from an overly general approach that prevents it from focusing on the needs of any one group. Just as the new entrepreneur will feel unsatisfied by the generalist approach, likewise, it hardly seems likely that the CFO of a major corporation will be scouring through this thin volume for last-minute financing ideas.
- Philip Lisio is director of investor relations at Ogilvy Public Relations Worldwide, Beijing.
