6. Prevent a Media Crisis: DON'T do this Post Series A with Sarah Rall from Cherry Ventures

So at pre-seed and seed stage, many scientific and technical startups don't actually have a calm specialist on board. So bitch decks are puzzled together in endless situations. Website Copy is written off the cuff and the founders often just riff in interviews. That may work out okay until the company starts truly scaling. But from serious A onwards, you may face a growing amount of media interest and scrutiny. It's the worst feeling when someone goes on something and you don't know about it. And they maybe say something and they weren't supposed to or give information that's still confidential. You know, there are some reputational risks and we just want to avoid them. This is Sarah Rale, Vice President of Communications and Brand at Cherry Ventures. She's based in London and Sarah has faced media crises and journalists digging for dirt, been through the communications journey of a startup all the way to IPO and she regularly supports startups across the Cherry portfolio. Cherry's 2022 fund is 320 million large with half of their fund reserved for supporting their founders on their growth journey. In this episode, you will find out what comes pitfalls to avoid on your startup growth journey, including an essential tool for aligning your growing team. I really enjoyed this conversation and I hope you'll do too. Scaling nerds help science and tech founders master the essential communication skills of startup growth so you can fundraise easier attract customers and scale faster. I'm your host Marie Nashmit, a communications advisor for founders specialized in agri food, biotech, and materials. Or put differently, I scale nerds, let's jump right in. We can start out looking at generally, right, like why would founders worry about communications from serious A onwards, but I think for a lot of founders, looking at comms kind of of course is important, but from your experience, what actually changes once they raise a serious A onward? I think for a lot of founders, series A is a real turning point because when you're pre-seed, you're usually a lot of times building in stealth almost. No one's really paying attention to what's going on. You definitely don't have beat reporters. Oftentimes, someone's not trying to scoop your next round or get in behind the scenes or talk to your employees and get the dirt or just understand what new products are coming. In some ways, you get to operate a little bit under the radar. Once you hit series A, you've been probably validated with a pretty large kind of check size from a good investor. I think you definitely, it becomes your time in the public. You need to be a little bit more aware of the brand that you're presenting externally. I think for many of our founders, that's kind of a wake up call for them. You need to be thinking about the next phase already as you're always trying to think a couple steps ahead. I think everyone's having a bit of a realization now of the real power of brand and storytelling. There's been a ton of conversation recently of companies hiring a chief storyteller or things like that. There's a real moment for owning your own narrative. When you hit that certain point of series A, you want to be thinking really down the road. How do I make this be a lasting brand and company? How do I position myself as a subject matter expert or a thought leader in this space? You are thinking about the next round of investment almost already, even though you've maybe have fresh capital in the bank. It's reaching those big growth stage investors, sometimes who, especially if you're a European founder, they say it in the US. They might not be tracking everything that's going on over here. I think the power of communications and telling a good story and people understanding what it is that you're building is super important, which is why I think that's often a time where people will hire that first marketer or communications person. Just realizing that those things all actually connect to the end of the funnel, like ultimately if your goal is to sell a product, it doesn't matter what type of product it is or who your audience is. I think the communications and the marketing element and being more out there externally is actually a huge lever to pull in that sales process and selling to investors, selling to customers. Those are all super important and candidates like reaching everyone is in a fight for talent. It's rough out there for some of these early stage companies to find the best people and to get them away from the big tech and the big dollars. You want to kind of tempt them with this amazing opportunity to build, to be at the forefront, to be in early somewhere, to grow your own, to build your own skill set alongside a smart team of people and work hard and have fun. You need that story to back it up. You need people to believe in a vision that you're selling. Yeah. I love the chief storyteller idea. That's what a great position. Maybe I'll have to add that one. That's the newest rebranding of the kind of communications and marketing function, but I think I'm sure a lot of it has to do with the age of AI and people kind of wary of who is telling these stories and is everyone sounding the same. Yeah. It's fascinating because it seems that there are two areas, the proactive area, to pretty much multiply once effort and just get results across the board. So attract more sales, attract investors, attract talent, but then there's also this reactive topic, which you also pointed out, right, suddenly you may be on the radar of journalists who are digging for stuff because don't we all love a good, somebody who pretended to be a hero, but is actually a fraud story, you know. Yeah, the clickbait headlines unfortunately does drive a lot of the journalists attention, but yeah, you're absolutely right, the reactive, proactive flip is a lot of times what drives this sudden need for being more at the forefront of your own communications because rarely are a lot of the early stage founders that I'm working with, getting inquiries and when they do they'll, you know, they usually will kind of check it by me, but then you hit a point where suddenly if you're getting asked, you know, frequently for things, you also don't want it to be a kind of distraction from the business and that's where sometimes having that actual communications person on board is it, that's a good time to start thinking about it. Yeah, absolutely. You also mentioned to me that part of what you see from Sierra's A onwards is that communications is important, like leading up to an IPO and for a founder who wants to actually, I guess, be successful in terms of getting a merger, an M&A or an IPO. How does communication matter that you have like an example for, or yeah? I worked for a scale up in San Francisco. I joined when they were just raising their series D and already we were under the kind of direction from the founder and CEO to operate as if we were a public company and I think that actually served us really well and, you know, we did eventually do the IPO about two years after I joined, but from a comms perspective, there's a lot of learning and education both internally and externally that you need to do about your company. We need to kind of bring employees along for the journey, but you also have quite a lot of regulations and restrictions around the activity that you can do. You know, you enter a quiet period and you're not allowed to kind of say too much about your revenue or any metrics, you have to be super tight on. So I think if you kind of get it in practice early on and everyone's aligned and on board with kind of the, these are the metrics that we're going to share. We're going to stick to it and we're not going to kind of have a surprise where we accidentally reveal information that could come back and haunt us when we file the S1. And I remember, you know, trying to make sure that we track down every number that we had ever put out there going through old interviews and transcripts and looking through speaking opportunities and just making sure that everything lined up and then matched the story that we were presenting in the investor road show and leading up to the IPO. I think when you kind of ingrain those practices in people quite early and do the education of why it's important, especially for employees, but at the same time when you're on the communications and executive team understanding that anything internal is also external. I mean, that's just the way that communication works nowadays. If you stand up in front of a crowd of people, like you don't know who could be recording it. And, you know, I mean, there's all these note taker apps and things like that now that are also usually tuned into your, your meetings or conversations. And I think being just hyper aware of the kind of off the cuff conversations that you probably can get used to when you're super early stage, you're 10 people in an office, you're crowded around. You're talking about the same thing, but when you grow to 100, 200, 300, you can kind of lose control a lot more quickly of the narrative. And when you think about being a public company, the scrutiny is magnified tenfold if not more. And, you know, already we see some of these big kind of fast growth companies across Europe. And even though they're still early stage and private, they're in the news every day. And then you do have people probably that are reaching out to employees trying to understand the real story. I mean, I worked at Amazon for a few years, and I know we had kind of a couple of reporters who were well known for just going through LinkedIn and messaging employees and saying, "Hey, I heard this rumor. Like do you want to talk? Here's my signal." And kind of fishing for gossip, so, you know, you do need people to understand that this might happen. And I think for a lot of founders, it's quite challenging because they really want to be super transparent, but there's kind of a difference in being transparent, but also respecting, you know, confidential information and keeping sometimes the circle a little bit tighter than you may be used to. And I think that's just part of growing up as a company. And there's ways to do it without losing that kind of authentic connection to your employees without feeling, you know, you have to have everything that you say, like, checked by the comms person or legal or, you know, you're never allowed to talk to employees. Like that. I don't think any comms person really wants that. That's definitely sometimes the reputation that we get, but that's not what's happening. It's just kind of looking out for the reputation of the company at all times. Yeah. Fascinating. Fascinating. I've also observed this in a maturation process in a company that I've advised. And they were growing pretty fast, you know, towards 150 plus employees. And initially during like pre-seed, seed stage, even during the very beginnings of the series, a mostly only the founders of the sea level were present. And at some point it became like an octopus, you know, just people across the organization went and gave talks, went on panels. I remember at some point I was working with somebody from the company directly and he sent me an article and he was like, well, I just found out somebody gave an interview in a newspaper and she just used the completely wrong terminology to describe what we're doing. And I was like, look, like you, like this is a systemic issue and you need a process for this. Like this will keep happening. Like you can't tell people don't just randomly go and speak about the company, but there needs to be a process to actually check in with them. So I advise them on like setting up a structure right where if people want to go somewhere, like it's encouraged. The only thing is that they actually fill out a form, it's already so much corporate Jesus. I know. I like fill out a form. Yeah. You know, get it, get a briefing, you know? This is the struggle. And I think especially at early stage and startups, it feel no, like the worst thing is to feel like you're coming in and putting this corporate process onto something that's been working well for a long time. I mean, I came from like I was working in agency side for about 10 years, mainly like corporate and crisis and financial comms and with, you know, the Fortune 50 companies in the US. So I was super kind of process oriented and then thrown into the startup and everyone at first was so averse to the like documentation that I would put ahead of them. And it's trying to make it as basic as possible, but also it's setting up just a little bit of kind of guidance for people and, you know, what I always told people was I'll probably say yes, anything that you ask me to do, but at the same time, if you get a request to go on a podcast, I want to kind of do a little research first and make sure this is not some crazy person and their basement, ranting and raving or espousing views that would not represent that of our company or our founder, but a lot of it is education. I think when I was at the start up, the kind of earliest thing that I did and I even do this, the cherry now is like when we have new joiners, just kind of give them a few slides of, hey, if you get asked something by a reporter, send it to me. Here's why if you want to speak somewhere, that's awesome. We love having people representing cherry. We can't be everywhere all at once. So it's nice to kind of take advantage of the full bench of spokespeople that we have at our company, but also kind of understanding, you know, there are some reputational risks with some of these things and we just want to avoid them. You never want an own goal in that scenario. And they maybe say something out of turn or something they weren't supposed to or give information that's still confidential and they might not think twice about it or they might be kind of caught off guard because they're not used to doing these types of interviews. And of course, I think for executives and partners, you know, there's media training and they're usually pretty well versed and practiced in how to pivot and avoid and get away from the kind of like crazy questioning. But if you've never done it before, you might just think you're having a conversation with your friend and kind of forget that you're, you've got a live mic underneath you. And then anything you say, Canon will be used against you. I love that phrase. Yeah, Canon will be used against you. It reminds me, must be like four years ago, I had a, I did an interview with a very, very successful founder. I know she is like nailing it. They've now raised a serious a and I'm not going to mention the name, but the interview is still on the podcast in the archives, but we talked about her product and how they're doing it. I'm a curious interviewer. I'm going to, I'm going to keep asking, you know, like, okay, so what specific strain, you know, and like, what is, how's the process and okay, okay, can you like deeper diet into this one? But because we were pre-producing, actually, the actual interview only came out like four months later, right, because we had a whole production schedule. I remember like three weeks before the launch, she wrote me and she had a very distressed tone. She's like, hey, Marina, so it's super important. I'm super sorry. I know this is going to be really inconvenient, but like, I talk to our patent lawyers and if this information is released, this is going to be a huge issue for us. And I'm so glad you didn't release this yet. Oh, please, please, please, please, please, like, take that out. I know it's like a lot of the episode. And I was like, of course, you know, like, I'm going to do it. Because I'm on your side. But yeah, I'll know a lot of people would not see you and they would be like, oh, yeah. Yeah. And it's not because they're out to get you or they're trying to bring you down. I think that's kind of the nature of a reporter's role. Like if they find out news that they are in some ways obligated to share it. I know this happened to me with an executive that I was working with sat down for an interview with the telegraph in the UK and it was meant to be kind of a profile piece, like really in depth. And there was one kind of quick comment that came out of it about a product and, you know, would you ever release this in the UK? And the answer was like, maybe, you know, like, we're not really thinking about it now. But instead of the profile piece, then that was that was totally squashed. And at 4 p.m. that day, there was a piece that was then in print the next day that was like launching in the UK this controversial program and it was headline and it was a whole cycle. Then I missed kind of, you know, I had corrected the reporter kind of right away, like, oh, that actually isn't happening. So I don't know that you want to write this piece because that was off the cuff comment, but actually not something in development. But it created a whole new cycle and you can't backtrack like when it's, when it's already, when it's been said, I mean, it was set on the record. And it's unfortunate that it felt like the words were used against, you know, this exec, but that's not really what was happening. It's just that was the unfortunate way your words can be misinterpreted. So I think that's again, the importance of education and how reporters think is different. And it's not always reporter is either. I mean, like, there's, you know, sometimes I was thinking about it like the way people kind of just have their casual conversations on planes, trains and automobiles and, you know, people who don't have screen protectors on there. Like, when I'm on a plane and someone sat next to me working it, I'm always kind of like, oh, what are they doing and looking at and it's amazing to me sometimes the confidential information that I can see people just kind of typing away. And you know, I have a screen protector on my screen and don't try and never to kind of have these confidential conversations in person. But I think this is also because I worked in crisis comms for a really long time and I'm quite risk averse, but not everyone has that. Yeah. Yeah, at the same time, I mean, we're talking a lot about like preventing like big mishaps and stuff like that. How often do you actually see that now in the startup space? Oh, frequent is it the thing is the scale is quite different, right? So a big mishap maybe for a large global company that gets you on the front page feels incredibly dramatic, but at the same time when you're a startup, sometimes just that one sentence mentioned in sifted or someone posting about you one linked in or saying something off the cuff on stage or on a podcast can seem just as big and seismic of a kind of a ding against you. So it's a little bit about the scale of what is a crisis looks and you know, the term crisis like that looks different across the across the stage is I I would say for most kind of, you know, startups, those things don't happen that often. I mean, given I have a lot of crisis experience, you know, I kind of joke, I luckily don't have to use it that often in my current role. It's I haven't really had anything that I would consider to be super major in and advising the portfolio companies that I work with, but it's more about kind of being careful and avoiding those types of mishaps that, you know, and just understanding how you can kind of get yourselves in those scenarios and then also extract yourself from them before you do any kind of damage. I mean, I think a lot of times in in VC and early stage is quite interesting because everyone is kind of sharing everything. I mean, you sit in a coffee shop around where I work where it's a bunch of VCs together. You can find out probably everyone who's raising at what valuation, who's who's raising from who who has a new term sheet, the conversations, and it just seems to be that it's a kind of a world of gossip, which is really different from some places I've worked in kind of corporate America where things had code names and you weren't allowed to print anything in the office and so it was a totally different environment. So again, I think it's just kind of being aware of the conversations that are going on around you. Okay. Well, let's look at internal comms versus external comms starting with the internal side where it all broods, so how would you define what internal comms is to begin with? Yeah. I mean, internal comms, you know, some people call it employee engagement, which I kind of like as well as a way of thinking about really, you know, connecting to employees. And I think I think a lot of it is about bringing your employees along for the journey and kind of being open with them, sharing what's going on, making sure that they really understand and connect to the vision and the kind of values and purpose of your company, which I is why I think really having those things clearly articulated is super important, surprising how a lot of companies don't think about that until quite a bit later. But you know, if I'm going to join an early stage company, I want to know like, how are you going to change the world? Like, what are we building? What is the purpose of this AI agent? Like how does it make people's lives better or easier or change this entire system or change the way people do business? So I think having those things articulated is super important and so much of that comes through internal comms. I always think of it like internal comms where, you know, your employees are your biggest kind of brand ambassadors, they need to understand the business, they need to be able to speak about it. They need to, you know, that can sometimes be a sales tool for you. It can be a recruiting tool, it can be a retention tool. All of those things are super important for employees to feel like they are part of something bigger. You know, and these early stage like the work is hard, the things are shifting quite a lot. You're, you know, there's the kind of jokes of like 996 or, you know, you're, you're being asked to give kind of a significant portion of your time to building. I think if you don't connect to the mission or vision, you're not going to be that incentivized or excited about giving away a weekend. So that's where the beauty of internal comms can go quite far. And of course, you know, what does internal comms mean, you know, in tactics like there's all kinds of different channels and things at your disposal and all hands or just, you know, conversations, ask me anything, emails, slack, text, however you choose to deliver the messages, but also making sure people are really receiving them and responding to them and you're, you're engaging with your employees in a way that feels authentic as well. Do you remember an example of a founder moving from a state of maybe a bit of chaos or confusion into more clarity within the team by applying any specific tactics successfully? Yeah, I think the biggest one is just, it's really easy to get caught in the swirl of, you know, the, okay, we're working on this product and then actually like, let's deprecate that. Let's change and let's focus instead on this product or actually this, you know, big enterprise customer came to us and wants us to do this instead. So let's pivot our whole strategy for this entire business line. And I think what I have realized is the power of comms that I is a bit old school almost is, but is having almost like a narrative doc, a source of truth, a call it what you want, a Bible, a messaging house, there's many different ways to think about it, but actually equipping people, equipping, you know, the spokespeople for your company with a clear set of messages that align to that mission vision values that I was talking about is so important and kind of the way that people will kind of respond to what you're building. And so I've definitely seen before where, you know, you're saying one thing and then someone else on your team is saying something else and then they're reading something in the news and then everyone internally is kind of confused like, wait, I thought we weren't doing this and now we are and that is not a good feeling when you're, when you're in house and trying to figure out what's going on and is my team being scrapped like this is an awful feeling. So I think it's really important to kind of control the narrative and make sure that everyone is aligned and speaking from that same kind of source of truth and that doesn't mean that everyone sounds really scripted and they're saying the exact same thing in the same cadence like it's not robotics, it's just, it's just being able to kind of clearly articulate what you're doing. Yeah, absolutely. And yeah, I've also seen that where there would be discussions and also like a lot of time wasted on people not being clear. So are we launching in two weeks? No, no, no, that was changed already to next week. Oh, no, I heard that that was like the last version and now we're launching in three weeks, you know? Yeah. What is the up to date information can somebody please? And those messages can really go wrong when you're telling them to different external audiences. If you're in the sales or GGM team and you're talking to one customer and telling them one thing and someone else is talking to another customer and telling them, Oh, that product actually isn't coming anymore or it's going to be delayed by a few weeks and the customers find out from each other, it can be like a major red flag of like this company is not organized. They don't know what's going on. And so you really need to make sure that everyone in the business is kind of sharing the same information and has the latest updates. Yeah, and like the beauty about it is that it's not necessarily extra work, right? Because otherwise the founders or right, the sea level would have to be updating people individually and correcting misinformation and by just having one, just one central document that has an info, you know, who updated it last, what date and time, and everyone can just access this one document. It just clears things up so much and things don't have to be re-explained and re-stated and re-corrected over and over again, like so simple, so simple in the case that I shared before with the company that had the communications octopus, that was also the strategy. So have everyone, you know, submit the form to do speech or give a podcast and so on and so forth. And then beforehand they would get automatically the link to the source of truth. So if they get any Q&A questions, they're going to actually be able to share what's going on with the right kind of phrasing and so on and so forth. And that helped it, yeah. Yeah, I would always kind of do like five Q&As that I would go through with all the employees when I was doing speaker training with them and two that would be really softballs and three that would be really hard and kind of intentionally try to trick them into saying, like, oh, I've heard this about your AI program, is that true? And it's amazing how some people, you know, they've just kind of gone through this whole session of what, you know, how to say a message and they're like, oh, yeah, this is actually we are doing this really cool thing. And I want to tell you about it, like, no, don't say this. Like we haven't said this anywhere yet. It's not public information, especially if you do work for a public company. Sometimes you get into instances where that's like material information that you're sharing. I think even more recently, I think it was, make sure I get it right. I think it was a CFS snowflake maybe was on one of those Instagram influencer on the street interviews and disclose information that was actually material information that then the company had to file with regulators and, you know, meant, thought it was probably like a funny thing like talking to this Instagram influencer, but sharing detail about, you know, which is forward guidance or something is not a good, not a good look. Yeah. That's why I'm like a fan of helping people prepare with kind of Lego blocks of information, this story based Lego blocks. And when they got a question, instead of just pulling something out of their head, they have like this little story or these anecdotes or something they can share, which is in itself cohesive and answers the question in one way or the other. But it best works kind of for the founders who have more of a direct relationship to the company and can speak more in like I or we or, but if that works out well, then there's a little bit more flexibility, but also more security because, you know, if I share this story, it will actually get across what I want to be sharing and then not to in your face wave. Yeah. That's a good structure, the internal, the Lego blocks is a good way to think about it as well. Yeah. Because so many really good speakers, people think like, wow, this person just comes up, especially if you see actors on stage or in talk shows, you would think like, wow, how does he just whip out this really funny story and then you see them doing the same story on other talk shows. And you're like, huh, this is not coincidental. No, yeah, they're paired. There is just so much to cover and I would love to keep producing new free episodes for you. I'm really thankful for over 133 reviews and a perfect 5.0 star rating. If you enjoy scaling nerds, please leave a rating on iTunes, Spotify or your podcast app of choice. Just go to the overview page of the podcast, click on the three dot menu and click rating. It means so, so much to me. Thank you.