The Name Game
What’s in a name? That which we call a rose by any other name would smell as sweet, except when branding a venture capital firm.
Perhaps these were not the exact words William Shakespeare used when he was describing that it was only a name that preventing Romeo and Juliet from forming a successful merger. If the playwright had been charged with naming a venture capital firm today, he probably would have made that statement.
With the explosion of private equity, venture capital and hedge funds in the market right now, finding the right name for a new firm can be a lot more difficult than many would think. The challenge is to come up with a name that is evocative, emotional and easy to remember. The name has to be something everyone associated with the firm can get behind.
“Limited partners are [usually] large conservative firms that expect you to be taking some risk, but still [be] very careful about what you are doing with their money, [whereas] the entrepreneurs love hot shots who are very out there, connected and [are] risk takers,” says June Bower, vice president of marketing for software company Mobiltec. “That is a real challenge – [coming up with] something that works for your two main audiences and one that works for the partners as well.”
Bower used to work for Lightspeed Venture Partners when the firm spun out from financial services firm Weiss, Peck & Greer. Before Lightspeed was known by that name, it went under the parent company’s moniker. The firm’s general partners were surprised to find they had difficulty in attracting new investors. Bower and others at the firm realized Weiss, Peck & Greer was thought of as being stodgy, old school money. Not surprisingly, that kind of personality did not catch on in the high-tech new money atmosphere of California. That was when Bower contacted Burt Alper, co-founder of Catchword Branding.
In addition to working with Lightspeed, Alper, who has 15 years of marketing experience, has worked with a fund-of-funds. He says branding a venture capital fund in many ways is similar to naming anyone else’s firm. The key for Alper to learn is who the firm is, who it wants to be and how it wants to be perceived. Catchword will then generate a list of names for the firm to consider. Once the client settles on a basket of names it likes, Alper will find which of the names are available. The process generally takes four to six weeks and usually costs $20,000 to $40,000.
Finding available names from that whittled-down list can be a pretty difficult task. Firms have to be careful to avoid a name already being used by a business or one that resembles a name in use. Firms also need to see if the URL has been purchased.
There is one major pitfall, according to branding experts, which firms can fall into and that is to put the founders’ own names into the firm name. That tactic is rife with potential hazards. “Venture capital firms tend to have names that are the partners’ names or the street address,” explains Micaela Wilson, senior brand strategist for Russell Branding. “That works very well if you are [Tom] Perkins.” However, even industry bigwigs today are learning to stay away from inserting their own names into their fund names. Take Alan Patricof, co-founder of venture giant Apax, who started his new fund known as Greycroft Partners. Patricof recently lamented on the dearth of good names available and wound up settling on the name of his East Hampton, N.Y. summer home.
Alper takes the name game even further, pointing out the negatives of having a person’s name associated with a deal gone bad.
“I think the predominant approach has been to use your name or you and your partner’s names, [but] the big downside with that is if your fund goes belly-up or if there is some kind of problem with the fund, you have sort of sullied your name,” says Alper. “I think that is one of the big justifications for putting a concocted brand name on the door.”
Lest you think naming a firm is akin to the difficulty in performing brain surgery, not everyone in the asset class finds branding to be as daunting a task.
For Ridgelift Ventures, which opened its doors for business earlier this week, coming up with a name took about a month of discussions between founding partners Robert Goldberg and Stuart Phillips.
Phillips was reading a gliding book and saw the term ridge lift, which comes from a phenomenon created when wind strikes a mountain that is large and steep enough to deflect the wind upward. Gliders can take advantage of this phenomenon by riding the wind in order to stay airborne for a longer duration of time. The idea behind the name in relation to Ridgelift Ventures is that the firm intends to propel start-up technology companies to success in the same way ridge lift propels gliders. The firm will look to raise $200 million in capital.
“We have gone through the naming process multiple times with people and have done everything from sitting in the bar drinking beer and brainstorming to hiring a $100,000 naming firm,” explains Goldberg. “Luckily we have got enough experience that we skewed closer to the bar [scenario].”
While finding a name for a firm is an important step, it is an area within marketing that can take on a life of its own and become more important than it really is. Goldberg explains he and Phillips concentrated on the business plan for Ridgelift much more than coming up with the firm’s name.
This is not surprising to hear coming from a general partner with more than 20 years of venture capital and operational experience, but it is a bit surprising to hear the same kind of reasoning from Dick McGlinchey, a managing director of BluePoint Venture Marketing. He thinks the naming process should only take a couple of days at the most.
“People sort of obsess over it and it is really stupid because you can waste huge amounts of money on this,” explains McGlinchey. “Intrinsic names [and] what they mean internally are totally meaningless [because] people outside [of the firm] do not care.”
For McGlinchey, whose firm’s client list includes HarbourVest and JK&B Capital, the formula is simple. He says many firms make the mistake of thinking their name should have something to do with the firm, but that is not always the smartest direction in which to go. Instead, general partners should pick a name that is relatively neutral and does not have a commonly accepted definition. They can then build their own definition around it.
A perfect example is BluePoint itself. In coming up with his firm’s name, McGlinchey says he did not care what the meaning of BluePoint was because he liked that it was nonpartisan. As a for-hire marketing swat team, the firm is defining the meaning of BluePoint through its work.
There is no one correct method to determining a name for one’s firm. Sometimes it just comes to the general partners and other times an outside expert is needed. The important thing, one way or another, is to come up with something that resonates with people, for it was Oscar Wilde who said: “It is a sad truth, but we have lost the faculty of giving lovely names to things. Names are everything.” This is especially true when forming a venture capital fund.
Firms often go to great lengths to be creative when identifying themselves. What’s in a name? That which we call a rose by any other name would smell as sweet, except when branding a venture capital firm…