If you are part of a microcap’s management team, you are probably contacted daily (if not hourly!) by IR/PR “professionals”. While there are a lot of great professionals looking to help microcap public companies, there are also plenty of questionable characters looking to provide “IR/PR services” to microcaps (or, “IR/PR Pirates”). 

Colin Jordan (the senior communications manager for Egnyte) recently shared a post on TechCrunch titled “Bad PR agencies can kill a startup before it has a chance to succeed“. While the post focuses on Silicon Valley startups, many of the concepts are very easily applied to microcaps.  

Jordan says, “In a dying media world where quality coverage has become invaluable to a rising startup, public relations agencies charge startups anywhere from $10,000 to $100,000+ per month for their services. Unfortunately, these “services” involve a lot of smoke and mirrors that are designed to bilk startups“

Similarly to many microcap IR providers, these startup PR firms lock companies into multi-month contracts.

According to Jordan, the contracts usually start with a;

“‘ramp-up’ period. In their agency language, this means they need time to get to know your executives, understand your business, get a good feel for what your company currently does and where you want to go for the future. In reality, they want a solid, 1-2 weeks of leniency before they are expected to really produce anything… After the “ramp-up,” the startup needs to provide something newsworthy that they can share with the public or at least be able to provide some unreleased content that can be pitched“.

Sound familiar? Maybe it does or maybe it doesn’t. Either way, don’t let this discourage you from working with outside IR/PR professionals (they are essential for microcap public companies!) but make sure you are careful! 

Read the full post on TechCrunch HERE.