What's in a Name?
A while back, Pangaea General Partner Keith Gillard wrote a blog about our proactive approach to generating dealflow and evaluating potential solutions to identified market needs (found here). A consequence of this proactive strategy is that we interact with a whole lot of startup companies from around the world. While the majority of these companies are attempting to commercialize exciting materials technologies to solve some of the world’s bigger problems, we tend to be quite selective in where we place our money. For a typical VC, the percentage of companies invested in compared to companies evaluated is 1% or less. There are many reasons for this, ranging from a lack of confidence in the management team’s ability to execute to technology differentiation to IP concerns to expected long time horizons to revenue generation and possible exit.
I’d like to tell you that merit alone is the sole reason why we – and I suspect most other VCs – turn down the myriad opportunities we’re presented with everyday. But this simply isn’t always the case. In the end, we are a small team of people with a good deal of knowledge and experience in the advanced materials sector. We are human and fallible however, prone to faulty assumptions and reliant to some degree on heuristic decision-making. I consider our due diligence process to be rigorous and we are constantly thinking about ways to improve it but little things can add up to make a big difference in our evaluation procedures. One of those often-overlooked items is the first thing we see – the name of the company.
Don’t judge a book by it cover, right? Well, ideally (See: naively), yes. In practice though, it can be tough to disassociate first impressions even when we actively try to do just that. Branding counts, people! So, with that being said, I will provide some of my advice to perhaps consider when naming a startup that’s planning to raise venture capital money. Note that these are my opinions alone and shouldn’t be taken as hard and fast rules. As I’ve already mentioned, I’m human and I mean no offense.
Quick side note: examining the names of companies within the Pangaea deal flow is a surprising way to quantify some of the hype and deflation of specific technologies and/or hot R&D areas over the years.
- KISS– Keep it simple, stupid. A name shouldn’t and can’t tell the entire company story, so don’t try. Three words or less is likely sufficient. Less is more.
- Recycle waste, not company names. This sounds simple enough but you’d be surprised how many companies don’t do an exhaustive search before naming their company. A variety of resources are publically available to check for previously incorporated company names and I suggest you utilize them. Even if a company is now defunct, the potential for confusion is there.
- Avoid generic words, especially at the beginning. Does your company’s name really need to be called “Advanced ___” or “Eco-“? There are certain letters in our dealflow database that I dread scrolling through since I know there will be almost countless “Advanced this”, “Bio that”, and “Nano the other”.
- Pick something that I can sound out and spell with reasonable accuracy. One of the first things we do these days is search for a company’s website or other recent news about the company online. Avoid homophones if possible. I’m not a big fan of replacing letters with numbers, companies with symbols in their name (e.g. hyphens, plus signs), and I don’t think “z” and “x” are totally interchangeable at the beginning of a word. If I heard about a company by word of mouth and want to follow up but can’t find it in a reasonable amount of time, there’s a good chance I will move on. Out of sight, out of mind.
- Domain Name Availability: Choosing a company solely around an open domain name is probably overkill, especially for an advanced materials startup, but domain availability should at least be a consideration. Your domain name is one of the first things potential investors and customers see, whether its on the website or in your email address.
- Have a website: Not a name suggestion per se, but, for me, a lack of a website for a company is a bit of a red flag. Even if that site is no more than a placeholder for future expansion with little more than a logo and a “coming soon” banner, it’s better than nothing. No website can signal that a company is very early stage and likely not a good venture capital fit or there’s a lack of foresight going on within the team. A third possibility is the company is trying to stay super-stealthy at present and this can be a sign that important IP has yet to be properly filed, another red flag.
- Search Engine Optimization (SEO). Make sure that when I search for your company, I find your company. In fact, when I search for something like your company, I should find your company. If you’re curious, see what comes up when you search for “advanced materials venture capital”, “pangea ventures” [sic], or “materials vc”. This goes hand-in-hand with avoiding generic terms in your name.
- Don’t limit yourself: Company names containing the city they’re located in or with the exact product they’re developing can run in to trouble if and when they want to expand beyond that specific geography or product category.
- Think long and hard about using fashionable tech buzzwords in your company’s name. Sure “graphene” is a hot topic now but in a few years, will the luster wear off? When many of the “Graphene __” companies stumble, will you want to be lumped in together with them, fair or not?
“Great idea, terrible company name” or something similar is a common comment in our regular internal dealflow review meetings. By no means is it a deal breaker to have a bad name but it certainly doesn’t help. Hey, some of our own portfolio companies don’t follow these “rules”. Conversely, a good name in no way guarantees successful fundraising, but something unique and memorable has a much better chance at making a favorable and lasting impression on the entire Pangaea Ventures team.