Will my publicist accept equity?
By Melissa A Vitale
I have been running my public relations agency for a little more than two years, and for a few years before that I worked at a public relations firm led by my mentor, Jim Dowd, a veteran of more than 20 years in media. Like Jim’s agency, mine specializes in helping startups garner top- tier media coverage. Also like Jim’s, my firm offers lower prices than most major public relations firms because I have lower overhead. I learned how to run my business from Jim and, in turn, I have built a successful agency that has received accolades from journalists, editors, clients, and colleagues.
Also, like Jim’s agency, I do not accept equity in place of monthly retainers, the answer to a question that entrepreneurs often ask me. I still write proposals for those people, wanting to treat everyone equitably, but I know they likely cannot afford my services. I see the request for what it is: startups seeking a free campaign in the hope that their company will succeed and eventually make more than enough money to repay me for my hard work.
A proper PR campaign can often launch in less than three weeks, but it could take years for a startup to match that momentum. I could only accept equity if I knew I could depend on near-immediate Return of Investment, but, as I’ve seen, most startups can take years to reach that point. I have a proven track record, which is why many startups want to work with me, but if I were to accept equity, rather than cash, basically I would be paying vendors and my employees with promises. I could work four to five months without pay, and a startup would have free access to a New York agency. If the startup were to fail, how would I recoup that lost revenue? If I could afford to work gratis, I would gladly volunteer at a charitable nonprofit.
Many of these same founders would never accept such a lopsided business proposal: professional services in exchange for an IOU. Since starting my business, I have had about 20 startups ask if I would take equity instead of cash. Of those, I thought of accepting the offer from only one, and only after receiving regular monthly retainers for nearly two years, after which I knew it was a viable startup, making an equity swap a safe option.
Many business owners and independent contractors have heard the story of the washed-up Shark Tank competitor who couldn't get an investment in his new company, because when he was back in law school, he was offered equity on a company to which he turned down. The company went on to become Under Armor. I've been given this example from startups to encourage me to accept equity. The first thing I point out: The project that Under Armor offered equity for was short term, not a full-scale involvement that would last 5-12 months and over 100 hours of sweat equity.
If there's a short term project of under 6 weeks--not committing my company to investing months of unpaid labor-- and if you can show me the documentation that your brand will be the next Under Armor, maybe we can talk. But most PR services that I provide are a minimum of 5 months time.
Unfortunately for those startups hoping that I take nothing but equity, I cannot work for free. If you can show me a good return within 18 months, then maybe we can discuss that alternative, but if not, my business, like most every other business, runs on capital.
If you are looking for a publicist who accepts equity, I suggest hiring a university student who does not yet have business vendors with monthly fees or contractors to pay. If you need a successful sniper publicist, please peruse our site and schedule a consultation.
To learn more about what we do, visit: https://www.melissaavitale.com/about.html
Melissa A Vitale Public Relations
A public relations agency specializing in brands and startups in crytocurrency, artificial intelligence, sexual wellness and legal cannabis.