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"Dan Primack"


Dan Primack

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Term Sheet -- Tuesday, October 19


19-10-2010 12:47:02

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The Term Sheet by Dan Primack

Tuesday -- October 19, 2010
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When and How To Give a Media "Exclusive"

Last week I participated in a panel discussion about how startups should handle social media, sponsored
by the New England Venture Network (NEVN). Lots of good back-and-forth, including a fairly contentious
discussion of whether or not companies should give "exclusives" to certain media outlets.
Leading the anti-exclusive charge was social media guru Paul Gillin, who summarized his argument in a
subsequent blog post: "Exclusives make one friend at the expense of making a lot of enemies. I can't
believe they are a good thing for your business in the long term."
As I did on the panel, let me emphatically disagree.
Giving exclusives still can serve an important function in today's viral media world, and even may be worth
making a few enemies. Were I running a startup (or running/advising any non-public company), here is the
process I would follow:
1. Is my news important enough? Not all press releases are created equal. Remember, offering an
exclusive does not necessarily mean you'll get coverage. Think of it as if you're asking someone out on a
date: If she doesn't find you attractive -- or if you suggest a Friday night at Taco Bell-- your prospects are
markedly diminished.



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Examples of "attractive" news could include a new product launch, a new round of venture capital funding
or a big client win. On the other hand, few reporters will care that your Ohio-bred CTO was invited to speak
to students at Cuyahoga Falls High School.
2. Who should get my exclusive? Assuming you have exclusive-worthy news, the next thing you must
decide is which media outlet -- or specific journalist -- to approach. Your immediate instinct might be The
New York Times or Wall Street Journal, since they have giant business audiences (or perhaps CNBC if
your product is best viewed via closed captioning). And this may price best, but you first should figure out
what your target audience is reading.
In most cases, the goal is to get your news in front of existing and potential customers. You know this
population, based on hours and hours of market research. In fact, you probably would be one of them had
you not founded the company.
So what are their/your first reads in the morning? It may be the WSJ, but it also might be a certain tech blog
or B2B trade rag. It might even be a local newspaper, if your primary goal is to attract new employees
("Primack Corp. has raised $10 million in VC funding, which it will use to hire 20 new employees in its
Framingham, Mass. headquarters").
In other words, the broadest audience may not always be the best audience.
3. How do I approach the publication? Once you know where you want the news to appear, you
basically need to "pitch" your news. At this point, you have two choices: Hire a PR firm to help you, or go it
If you have the resources to engage professional help, be sure that the PR firm has an existing relationship
with your preferred news source. Ask for examples of the PE firm's clients getting coverage in that
publication. Ask for some details on a particular reporter's tendencies (do they prefer to be contacted via email or phone, are they likely to ask softball questions or tough ones, etc.). If all a PR firm can do is help
you write a cleaner press release, then save your money.
If you choose DIY, then try to learn the reporter's tendencies on your own (I recommend approaching an
actual reporter, rather than a general publication inbox). This obviously can be difficult, so take a look at the
reporter's past articles. Did he write about someone you know? Then perhaps you can get some intel, or
even an introduction. If not, try engaging via social media. Follow the reporter on Twitter, and react to
something they wrote. Or put some intelligent comments up on the reporter's blog posts.
Also, beware of assuming that a publication's best-known reporter is the obvious go-to. Sometimes the
"stars" are overwhelmed with pitches, whereas a cub reporter could be searching for something to write
(and could spend more time really understanding your pitch).
Finally, check to see if the reporter cares about having an exclusive. Many do, but some do not (preferring
long, analytical pieces about news that other people break). Again, just do some research on past writings.
4. Negotiating the exclusive. First thing first: Be sure that you are talking "off the record" until the reporter
agrees to the exclusive. Don't lead with: "Hey, we just got Cisco to buy our product. Would you like an
exclusive on it?" At that point, the wolf has left the henhouse. Instead, lead with: "Can I talk to you off-therecord about some big news we might like to share with you on an exclusive basis?"



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Once that's done, be as specific as possible. What information is exclusive, and for how long? Will a press
release be issued after the original story is published, and when? Will you give subsequent interviews to
other news outlets? May there be another part of the story that you're sharing with another, non-competing
publication, because it's more specific to their readers?
That specificity also applies to what you ask of the reporter. Be sure that they are going to write about your
news. Ask them upfront. Also, ask for what type of placement you might expect to get. The reporter will be
unable to give a definitive answer -- it's probably up to an editor -- but their reply might give you an
indication of how the editor will act (reporters typically know editor interests and disinterests).
5. Handle the fallout. Paul Gillis argues that giving an exclusive can create enemies for your company, in
the form of reporters who didn't get the exclusive. In some cases, he may be right. So be sure to limit the
fallout, among other publications with which you'd like to maintain relationships (Note: If your news is big
enough, other outlets will feel compelled to write their own stories -- lest their readers think they missed it).
Once the original piece runs, reach out to other reporters by offering certain details that weren't in the
original story. Not violating your exclusive, per se, but perhaps there were some interesting data point that
didn't make the initial cut. Or perhaps access to someone (executive, customer) who wasn't interviewed for
the original story.
If you get a particularly belligerent rival, consider lying. For example: "That reporter already had the story,
so we had to give him the exclusive." Perhaps not my best advice -- or at least not my most moral -- but
you probably won't get called on it. Even if the rival speaks with the original reporter, it's unlikely the
conversation will include: "No, you've got it all wrong. I didn't scoop it, they spoon-fed it to me."
6. Did it work? Conduct a post-mortem on your "exclusive" decisions. Did your process achieve the
desired results? Do you wish you had chosen a different outlet, or approached it differently? What other
lessons can be learned for next time?
Remember, the point of giving an exclusive is to most effectively disseminate your information. Some
reporters might resent your decision, but only until you ring them up with your next exclusive.

5 things you should read @Fortune.com

Pre-Marketing, including fresh horros from the corporate finance lab, Steve Jobs rants about
Google, the great private equity shakeout and how to tell when CEOs are lying.

Today in Tech, including Ray Ozzie's departure from Microsoft, Facebook deals with its security
headaches and Biz Stone becomes a vodka pitchman

Q&A with Jamie Dimon: Why he doesn't expect a double-dip

Brian Dumaine: China charges into electric cars

Nin-Hai Tseng: What exactly is a currency war, anway?

VC/PE fund performance: New data from the Massachusetts state pension

The Big Deal

Harrahs Entertainment Inc., the casino operator taken private for $31 billion in 2008 by Apollo
Management and TPG Capital, plans to raise up to $575 million in common stock. This would be money
that Harrahs would use to fund several new projects, and is separate from the $710 million that hedge fund
manager Paulson & Co. plans to raise via its own sale of Harrahs stock.



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This is a big deal because Harrahs desperately needs cash to fund its crushing debt-load. According to a
recent Moodys report, the companys annual interest consumes 90% of property income, and its overall
leverage is around 10x EBITDA.
That same report suggested that an IPO would be the companys most likely path given its disinterest in
selling assets (it keeps adding them) and the difficulties inherent in restructuring large chunks of existing

VC Deals
Buddy Media, a New York-based developer of a Facebook management system for advertisers, has
raised $23 million in Series C funding. Institutional Venture Partners led the round, and was joined by
return backers Softbank Capital, Greycroft Partners and Bay Partners. The company previously raised over
$6.5 million. www.buddymedia.com
Evernote, a Sunnyvale, Calif.-based provider of information capturing technologies, has raised $20 million
in Series C funding. Sequoia Capital led the round, and was joined by return backers Morgenthaler
Ventures, DOCOMO Capital and Troika Dialog. The company previously raised $20.5 million.
Amorcyte Inc., an Allendale, N.J.-based developer of cell therapy products to treat cardiovascular disease,
is raising between $11 million and $12 million in Series B funding, according to VentureWire. Investors
include Novitas Captial. www.amorcyte.com
Causes.com, a Facebook charity application, has raised $9 million in second-round funding. Backers
include New Enterprise Associates, Founders Fund, Ron Conway, Marc Benioff, Keith Rabois and Dustin
Moskovitz. www.causes.com
BlueCava, an Irvine, Calif.-based credit bureau for devices, has raised $5 million in Series A funding.
Backers included billionaires Mark Cuban and Timothy Headington (founder of Headington Oil Co.).
Oversi, an Israel-based provider of OTT video and P2P caching solutions, has raised $4.9 million in new
VC funding. Carmel Ventures led the round, and was joined by Cisco Systems, Smac Partners and
StageOne Ventures. www.oversi.com
Wham Inc. of Allen, Texas has raised $3 million in Series A funding led by Palomar Ventures. TechCrunch
refers to the company as a high-definition video calling startup. www.whaminc.com
Gridsum Technology, a Beijing-based provider of provider of web, video and search analytics solutions,
has raised an undisclosed amount of Series A funding led by Steamboat Ventures. www.steamboatvc.com

Private Equity Deals

Blacks Leisure Group PLC (LSE: BLSA) confirmed that it is in talks with several parties about either a
sale of the entire company, or a sale of certain assets. The British outdoor goods retailer is being advised
by McQueen Ltd. www.blacksleisure.co.uk
Candover may scrap its plans to sell or float Spanish theme park operator Parques Reunidos, according
to the FT. The report says that offers for Parques Reunidos fell short of Candovers 2 billion asking price.



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Bidders included Apollo Management and a consortium of Advent International and The Carlyle Group.
Cerberus Capital Management could walk away from its $122 million takeover bid for building products
distributor BlueLinx Holdings Inc. (NYSE: BXC), if shareholders dont tender enough shares to give
Cerberus a majority of the shares it doesnt already own, according to Dow Jones. BlueLinx has
recommended that shareholders tender at the $4 per share offer, which Cerberus says it will not raise.
China Vogue Casualware Ltd., a Chinese maker of casual sportswear, has raised more than $45 million
from TPG Captial, Partners Group and ARC China Holdings. www.tpgcapital.com
Massey Energy Co. (NYSE: MEE) is exploring strategic alternatives that could include a sale of the
company, according to The Wall Street Journal. The company was in the news earlier this year, when 29
miners died in an explosion at Masseys Upper Big Branch coal mine in West Virginia.
Platinum Equity has agreed to acquire American Commercial Lines Inc. (Nasdaq: ACLI), a
Jeffersonville, Ind.-based inland marine transportation and service company. The $33 per share offer would
value ACL at approximately $777 million, with Wells Fargo Capital Finance committing debt financing. ACL
is being advised by BoA Merrill Lynch, and has a 40-day go-shop period. www.platinumequity.com
Silverfleet Capital has acquired The Schneider Group, a German catalog and online fashion retailer,
from Barclays Private Equity. No financial terms were disclosed. Schneider reports 2009 sales of 241
million and an EBITDA of 26 million. Company management and its founding family will continue to hold
minority ownership positions. www.silverfleetcapital.com
Terra Firma has agreed to acquire Rete Rinnovabile, Italys largest operator of photovoltaic plants, from
Italian national grid operator Terna SpA. The deal could be valued at upwards of 670 million.

PE-backed IPOs
ShangPharma Corp., a Chinese provider of R&D outsourcing services for the pharma and biotech
markets, raised around $87 million via an IPO. The company priced 5.8 million American depository shares
at $15 per share (range of $14.50-$16.50), with Citi and J.P. Morgan serving as co-lead underwriters.
Affiliates of TPG Capital held a 25.2% pre-IPO stake. www.shangpharma.com

Fidelity National Information Services (NYSE: FIS) has agreed to acquire Capco, a provider of provider
of consulting and technology services to the global financial services industry, for approximately $300
million. The seller is Symphony Technology Group, which acquired Capco in 2006 for around $100
million. www.capco.com
St. Jude Medical (NYSE: STJ) has agreed to acquire AGA Medical Holdings Inc. (Nasdaq: AGAM), a
Plymouth, Minn.-based maker of medical devices the treatment of structural heart defects and vascular
diseases. The deal is valued at $1.08 billion in cash and stock. Welsh Carson Anderson & Stowe holds
around a 44% stake in AGA Medical, based on a 2005 equity recap. AGA Medical went public last year,
raising nearly $200 million. www.amplatzer.com



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Other Deals
Berkshire Hathaway has increased its stake in German reinsurer Munich Re to more than 10 percent.

Firms & Funds

China Investment Corp. is opening an office in Hong Kong, according to Reuters. Lawrence Lau, former
vice chancellor of The Chinese University of Hong Kong, has been tapped to run the office, which would be
CICs first satellite outside of mainland China.

Moving In, Up and On

Jean-Louis Brenninkmeijer has is stepping down as a New York-based managing director with Good
Energies, in order to join Bregal Private Equity Partners in the UK. News of the move was first reported
by VentureWire. www.bregal.com
Deryk Smith has joined Bridgescale as a managing director in the growth equity firms Toronto office. He
previously spent seven years as a partner with Edgestone Capital. www.bridgescale.com
Andrew Trader has joined venture capital firm Maveron LLC as an entrepreneur-in-residence in the firms
San Francisco office. Trader is a co-founder of social gaming company Zynga, and before that was CEO of
Utah Street Networks (a.k.a. Tribe.net). www.maveron.com
Wen Wensong, son of Chinese Premier Wen Jiabao, has left New Horizon Capital. He had helped found
the Chinese private equity firm in 2005. It is unclear if the move is related to New Horizons recent $46
million profit on the unwinding of its investment in Sihuan Pharmaceutical Holdings Group Ltd., which came
after Hong Kong regulators voiced concerns about Sihuans proposed IPO.
Atul Kapadia has stepped down as a managing general partner of VC firm Bay Partners, as first reported
by VentureWire. The move comes six months after three of the firms six partners resigned, which triggered
a key man provision in Bays most recent fund. VentureWire reports that Bays limited partners approved
the recycling of distributions from a recent exit, but also are insisting on several management changes. In
addition to Kapadias departure, managing general partner Neal Dempsey is expected to assume a lesser
role. www.baypartners.com

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