It's hard to keep silent a group of people who communicate for a living. And yet, until the formation of the National Venture Capital Association's MarcomGroup last year, the marketing and communications professionals working at and for venture capital firms were all but incommunicado.
?This group was veryhappy to meetone another,? says Emily Mendell, director of public affairs at the Washington DC-based NVCAand pointperson for the Marcomgroup.?It's rare that you can find someone in this role who understands exactly what you do.?
In the private equity industry, only the role of deal professionals is well defined. The other professionals at the firm ? in charge of financial, legal, human resources and communications functions, for example ? don't have job descriptions that can be easily summarized and quickly understood at a cocktail party. This is because until recent years, the task of marketing and communicating a private equity firm's activities was usually undertaken by one or more deal professionals.
When she joined the NVCAa year ago, Mendell says she noticed thatmore and more communications professionals were being hired by the members of the association. Mendell herself had been covering the private equity industry since 2000 as an outside public relations consultantatThe Weiser Group, with the NVCA as her chief account. Mendell says she knew well the challenges that venture capital firms faced presenting their message to the general public, to policy makers and to the business community.?We spenta great deal of time talking to our membership and learning what they were hearing from the media and from entrepreneurs,?says Mendell.?We found more and more that we were getting very good information from this new breed of communications professionals, a position thatwas becoming more prevalent within venture capital firms.?
Mendell organized an initial meeting for this disparate group in Chicago, which was attended by 20 people ? ?critical mass? for such an event, says Mendell.
The gathered professionals played a variety or roles at their respective firms ? public relations, investor relations, marketing to potential portfolio companies, and often a mix of all three. Mostof the attendees were in-house professionals but some worked at PR firms and had private equity clients.
?These folks are living and breathing what our message is.?
In additional to the thrill of co-mingling with their peers for the first time, the NVCA Marcom group members were pleased to discover that most in attendance had very advanced knowledge both of the private equity industry in general and of their respective firms' portfolio companies in particular, says Mendell.?We decided there were a lot of ways that we could help one another,?she adds.
The NVCA does not have a monopoly on communications professionals ? smaller groups gather periodically and informally across the US to compare notes. But the association now clearly serves as an umbrella for the largest and most diverse group of communications professionals. The previous two events have been held in Silicon Valley. The next Marcom event, scheduled for September 15, will be held in Cambridge, Massachusetts.
Mendell currently counts about 60 people as Marcommembers, with more added every week. Roughly 15 percent of the members work at PR firms. All represent firms that are members of the NVCA, and therefore membership is mostly affiliated with firms that manage venture capital funds, although some professionals from larger firms are involved in buyout activity, as well.
Mendell sees more and more venture capital firms hiring communications pros as evidence of the institutionalization and professionalization of the assetclass, and as a strategic move for the firms. Whereas once the communications function was confined largely as writing investor reports and press releases, now venture firms are more concerned with the intangible issue of brand, which affect their ability to win deals and fundraise.
On a macro level, the NVCA is eager to enlist the help of its legion of Marcompros in spreading the venture gospel to the public and to Washington policy makers. ?These folks are living and breathing what our message is,?says Mendell.?We can stand here and explain that venture capital investment is good for the economy, but these folks bring life to that.?
The Marcom network is already yielding some practical benefits at the intersection of the press and venture capital.?If a reporter calls me and says, ?I'm doing a story on semiconductors in China, do you know anybody who does that,? I can send out an e-mail and have some sources in half an hour,?says Mendell.
The institutionalization of private equity doesn't stop at communications. Mendell says she is now planning to create a group for another growing job description, that of human resources professional within a venture firm. Already this NVCA group has a critical mass of 20 professionals who fit this bill.
Shansby Group changes name, opens NY office
The San Francisco buyout firm has changed its name to TSG Consumer Partners, the firm announced, to ?differentiate the firm from generic, less focused funds.?In related news, TSG founding partners J. Gary Shansby and Charles ?Chuck?Esserman have been named chairman and president, respectively, of the renamed firm. Both remain managing directors. Shansby will focus on working with portfolio companies and the firm's other investment professionals while Esserman will ?oversee dayto-day partnership activities.?The firm also hired Clarence Schwab as a principal in the new New York office. Schwab was previously a principal at GolubCapital, a mezzanine debt firm. TSG specializes in private equity investments in consumer companies. Well known portfolio companies include Famous Amos cookies and Terra Chips. Last year the firm sold two portfolio companies for total proceeds of $340 million, having invested $55 million in equity, the firm announced. Shansby Group was founded in 1987 and currently has roughly $700 million in equity capital under management.
Houston's Sterling Group names CFO
Hot on the heels of a $470 million fundraise, Houston private equity firm The SterlingGroup has named Kelly Boots as the firm's chief financial officer. Boots joined the firm in 2004. Previously she was the executive director of an unnamed Houston-based non-profit organization and a vice president with EnronCorp. SterlingGroup closed its fund in May. The firm focuses on North American middle-market manufacturing, industrial service and distribution companies. Itwas founded 23 years ago by six current principals. The new fund drew commitments from limited partners including AXA Private Equity, Standard Life Investments, Danske Private Equity, Montreal TransitWorkers and The Meadows Foundation. Lazard Frereswas the global placement agent on the fund.
Duke Street names Yell boss operating partner
London's Duke Street Capital has appointed Bob Scott as an operating partner. Scott is currently the chairman of Yell Group, a directories business once owned by private equity firms Apax Partners and Hicks Muse Tate & Furst. He is also a non-executive director of the Royal Bank of Scotland, Jardine Lloyd Thompson Group, Swiss Reinsurance and Focus DIYGroup, the last of which is a Duke Street portfolio company. Scott will aid Duke Street with deal origination, portfolio company oversight and strategy, according to a press release. Duke Street, a mid-market buyout firm founded in 1988, currently has €2 billion under management.
Sofinnova names life science partner
San Francisco venture capital firm SofinnovaVentures has named Jeffrey Stein as a venture partner to cover the San Diego-area life science market. Stein previously was founder, director and chief scientific officer of Quorex Pharmaceuticals, which was acquired by Phizer in 2004. He currently consults for the University of California, San Diego in venture development and technology spinouts. San Diego is home to many biopharmaceutical companies and life science-oriented startups. Sofinnova was founded in 1974 and currently has $600 million under management. Recently Nicola Campbell joined the firm as a life science partner. She was previously a principal with BAVenture Partners. The firm has a particular specialty in helping its portfolio companies enter the European market and vice versa. It has an affiliate in Paris called Sofinnova Partners.