Should sponsors think more like VC's?
Having talked to a number of well-known VC's lately, I can't help but think about some of the similarities between the way VC's and sponsors think, as it stands right now.
When we were raising money, we would constantly hear things like "AWESOME.. LOVE THE CONCEPT, I can see how that could really take off... But come back and talk to me when you're bigger!" Lots of enthusiasm, no offer. If you're a small or emerging property by the numbers, you probably get the same response to many of your proposals when approaching big time brand marketers.
As one sponsorship sales vet, Scott Kosak, put it smaller properties can have "incredible potential but seemingly get de-valued or ignored by traditional media/sponsorship agencies simply because they're 'not big enough' to present to their clients."
It's not all VC. Smart sponsors can also put on their PE hat and look at opportunities like a turnaround specialist, understanding that a property with the core competencies of a brand partner, can reinvent itself to unleash potential. Unfortunately, a current lack of risk tolerance is also hindering these efforts.
Quant-focused marketers, especially in this economy, want a sure thing. Like scared investors, a single or double will do, as long as you've got a .400 batting average to back it up. They want to know exactly what they're going to get and who they're going to impact, based on history or a track record. Wasting sponsorship dollars costs jobs and the margin for error has never been higher.
Perhaps too high. Everyone is quick to pummel sponsors for risky deals, but shouldn't we also reward for a risk well taken? Are sponsors so retrenched by the current environment that we are going to see fewer and fewer homerun partnerships with once emerging properties like Mercedes-Benz/Fashion Week, FLW/Wal-Mart or TapOut/UFC?
There are lots of good examples and this industry needs those success stories to prosper.
Just like an entrepreneur walking into a VC without a previous exit to show, if you're selling sponsorships you better have a track record behind you or a kick-ass vision to sell.
Or maybe it's properties that need to consider the old adage: "they want to invest in you the most right about the time that you don't need them any longer."
