Client Secures Funding; Birnbach Secures Coverage

The Challenge

Any one of these following announcements would have been an important event in the life of the company:

• Securing a $14.4 million round led by Polaris Venture Partners and Menlo Ventures.
• Appointing a new CEO with a significant track record.
• Moving the corporate headquarters to Boston.

For Q1 Labs, a New Brunswick, Canada-based network security company, needed to make all three announcements. The challenge was to combine them all into one release while ensuring clear messages about each.

Timing was another concern, and not just because there were only two weeks to prepare for the announcement. The term sheets were finalized in November, 2003, placing the announcement around Comdex, Thanksgiving, and Christmas. Avoiding meant Comdex meant Thanksgiving week; meanwhile, the impact of the announcement would diminish the closer it got to the holidays.

While there was a lot of good news – since Shaun McConnon, the incoming CEO had successfully sold his two previous security start-ups for more than $400 million – but positioning the move of its headquarters to Boston would be tricky. Q1 Labs was considered to be a leading light in eastern Canada's business community. The good news: development would stay in New Brunswick, and plans included expansion.

Strategic Execution At Work

Based on a typical checklist that venture capital firms use before investing, our VC Announcement Scorecard™ enabled us to quickly develop a strategic plan and timeline that maximized the impact of Q1's announcements, validated the company and positioned it for the future with key media. With the VC Announcement Scorecard, we quickly developed press release and supporting materials that included an updated corporate backgrounder and an extensive internal Q&A document – due to the new CEO and corporate headquarters. Uncovering interesting story angles is important because business media generally no longer covers individual announcements, especially for sums less than $50 million, a cut-off point for The Wall Street Journal.

We developed a process to quickly circulate drafts of press materials to all concerned parties – which was more important than usual because key decision makers were traveling out of the country. Our process also helped us efficiently incorporate all changes into one version so that we didn't have multiple versions of drafts.

In terms of timing, we decided to issue the release that Monday, the same day as Comdex – but that we would pre-brief reporters at key weeklies so that the news would hit the same day, not the following week when many people take off for Thanksgiving. We also made sure to update industry analysts prior to the announcement.

The Results

Pre-briefing reporters was a successful strategy. We secured day-off coverage from eWeek, New Brunswick Telegraph-Journal (which was important for the hometown contingent) and others. In the first two weeks, we secured nearly 30 articles in top-tier media; and expect another 10 articles to hit the following weeks. We also generated interest among reporters at key outlets such as Business Week, The New York Times and Dow Jones who said they would be interested in including Q1 Labs in future security-related news.

Coverage included:

• Venture Reporter: "Startup Profile: Q1 Labs' Shaun McConnon, CEO" (Dec. 15, 2003)
• Wall Street Reporter: "Interview With: Shaun McConnon Chief Executive Officer" (Dec. 12, 2003)
• Boston Globe: "When the Boss Stays Put: More Companies Moving to Where CEO Calls Home" (Nov. 28, 2003)
• Network World Fusion: "Enterprise Networks: Security News Briefs: Q1 Labs announced $14.4 million in second-round venture funding" (Nov. 24, 2003)
  
• CRN: "Q1 Labs Mines New CEO's History With Channel" (Nov. 24, 2003)
• Mass High Tech: "Q1 takes in $14M, moves to Boston with new CEO" (Nov. 24, 2003)
• Private Equity Week: "Q1 Labs raised $14.4 million in Series B funding" (Nov. 21, 2003
  
• VentureWire: "Q1 Labs Lands $14.4 Million Series B, Names CEO" (Nov. 18, 2003)
• The New York Times' Deal Book: "Q1 Labs, a developer of network security intelligence software, closed $14.4 million in its Series B funding." (Nov. 18, 2003)
• The Daily Deal: "Q1 Labs Lands $14.4 Million" (Nov. 18, 2003)
• The Wall Street Journal: "Q1 Labs Lands $14.4 Million" (Nov. 17, 2003)
• VentureReporter: "Q1 Labs Raises $14,400,000 in Series B Round" (Nov. 17, 2003)
• eWeek: "Intrusion Prevention Pioneer to Head Q1 Labs" (Nov. 17, 2003)
• Mass High Tech: "Canada's Q1 Labs Makes the Move to Waltham with $14M in Second Round Funding" (Nov. 17, 2003)
• Boston Business Journal: "Q1 Labs gets $14.4M in VC, new HQ" (Nov. 17, 2003)
• CBS MarketWatch: "Q1 Labs Gets $14.4 Mln in Venture Funding" (Nov. 17, 2003)

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