Technology venture capital firms are typically hermetic when compared with most Internet-related companies, many of which count marketing and spin doctoring as core to their survival. Yazam, a b-to-b and business-to-consumer venture capital and business accelerator, is breaking that mold.
In recent months, New York-based Yazam, which advises start-ups on strategy and matches them with venture capital funding, has made several moves to pump up its own brand as well those of the dot-coms it helps. Its moves include:
Forming a marketing alliance with MoneyHunt Properties Inc., which runs a TV show that awards dot-com entrepreneurs VC dollars.
Acquiring Gregory Communications Inc. and Financial Communications Associates Inc., both marketing and PR firms.
Buying First Tuesday, a dot-com networking company with chapters in 85 cities and 42 countries around the globe.
Announcing plans to start a new print advertising campaign in the fourth quarter of this year.
The idea, Yazam President Phil Garfinkle said, is simple: Yazam wants to attract as many good start-ups as possible by touting its own brand. Yazam, whose expansion is backed by some $75 million from companies such as Merrill Lynch & Co. Inc., Morgan Stanley Dean Witter & Co. and Texas Pacific Group, takes small equity stakes in dot-coms and lines them up with marketing, consulting, legal and technology assistance. It also helps them get additional financing, usually within 45 days.
Unlike most incubator-style firms, it does not provide office space. "We don't hold their hands and set them up. We do open our Rolodexes and set them up with joint ventures worldwide," Garfinkle said. "If you're a good entrepreneur, we want you to hold hands and kiss babies and set up offices."
Yazam takes its name from the Hebrew word for "entrepreneur." The company's CEO, Yaacov Ben-Yaacov, is an Atlanta native but started his career in Israel.
Since launching last year, the company has provided marketing counsel to the start-ups that it assists through the Yazam Alliance Network, a group of marketing, consulting and technology agencies. Alliance companies, such as Saturn Network, a digital marketing firm, and Spiral Solutions Ltd., a global branding consultancy, assist Yazam's start-ups at discounted rates.
Yazam's self-marketing is shrewd, given the hyper-competitiveness of the VC industry, said Charles Wendel, president of New York-based Financial Institutions Consulting Inc. "There's more money than quality deals right now. So it makes sense to advertise," he said. "Targeted marketing might bring interesting deals to them."
Up against heavy hittersThis is especially true when Yazam's competition is considered. It is up against powerful firms that, despite having done little or no advertising, need no introduction to the start-up community. These include Accel-KKR Internet Co. and Internet Capital Group Inc.
The MoneyHunt deal is one of the biggest marketing pacts Yazam has entered. The companies will co-sponsor a series of live events around the U.S. that give entrepreneurs a chance to appear on MoneyHunt, a Public Broadcasting Service TV venture capital program.
Howard Feldman, president-CEO of CoreMarkets Inc., a steel industry suppliers' exchange that Yazam is assisting, said, "They're very helpful with international connections." Yazam has offices in London, Jerusalem and Tokyo.
Garfinkle declined to supply the dollar amounts that Yazam is dedicating to marketing; presumably, they are significant. Reaching the upmarket dot-com crowd doesn't come cheap, and neither does sponsoring TV shows and the like.
What remains to be seen is whether Yazam's promotions attract start-ups with real long-term potential. Since launching, it has assisted some 25 dot-coms, and intends to sign on at least three more each month for the foreseeable future, Garfinkle said.