The Corvus Effect

Ep. 82: The Real Reason Investors Say Yes: Brand Capital with Lysle Wickersham

• Scott Raven • Episode 82

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Episode Links:

Brand Think Website - https://brandthink.biz

Email: Lysle at Brand Think - lysle@brandthink.biz

LinkedIn: Lysle Wickersham - https://www.linkedin.com/in/wickersham/

Summary:

In this episode of The Corvus Effect, Lysle Wickersham, founder and principal strategist at Brand Think, reveals his game-changing discovery from 30 years spanning award-winning ad agencies, boutique investment banking, and M&A transactions: investors don't fund spreadsheets, they fund stories they believe in. His revolutionary "brand capital" framework positions brand not as marketing window dressing but as strategic philosophy woven into operational execution from day one, teaching founders that building intangible equity is a frequency-over-time equation where every touchpoint with markets, employees, and constituents either compounds value or degrades it.  He challenges the myth that founders can build product first and brand later, making the case that your first constituent is always your employees delivering on brand promise, and introducing the three pillars of brand strength (attribute strength, constituent alignment, market alignment) as the third leg of value creation alongside financial engineering and operational improvements.

Show Notes:

00:32 Meet Lysle Wickersham

04:01 Investors Make Emotional Decisions

05:26 Relationship First, Business Follows

07:42 Why Intangibles Get Ignored

09:19 Introducing Brand Capital

11:01 The Fragility of Brand Equity

13:19 The Third Leg of Value Creation

15:01 Emotional Storytelling in Fundraising

17:45 What Investors Really Look For

21:12 You Can't Separate Brand from Business

26:19 Why Brand Think and Advice for Founders

31:21 How to Connect with Lysle

Intro

Scott Raven: Welcome to The Corvus Effect, where we explore what it takes to succeed professionally and truly enhance all parts of your life. I'm Scott Raven, Fractional COO and your host. Each episode we go behind the scenes with leaders who've mastered the delicate harmony of growing their professional endeavors while protecting what matters most. Ready to transform from Chief Everything Officer to achieving integration in all facets of your life? Let's soar!

Meet Lysle Wickersham

Scott Raven: Hello everyone. Welcome back to The Corvus Effect. I'm Scott today I am excited to welcome Lysle Wickersham, founder and principal strategist at Brand Think. He's a self-described creative capitalist who fuses right brain creativity with left brain business strategy.

Over 30 years of experience having served as a chairman and chief creative officer at WHS, an award-winning integrated agency and part of Arnold Worldwide. He's worked with brands, finding a passion for startups and early stage firms. Founded a boutique investment bank doing M&A investment placement, and working with private equity and venture capital.

What makes his perspective unique? This is understanding that investors don't just fund spreadsheets. They fund stories they believe in. And today through Brand Think he helps startups and growth focused SMBs build the brand capital that increases intangible equity and drives market performance. So Lysle, welcome to the podcast man.

Lysle Wickersham: Thank you so much, Scott. Happy to be here.

Scott Raven: We're happy to have you. Let's just delve right in because as you say, you describe yourself as a creative capitalist, someone who fuses right brain creativity with left brain business strategy. And that's a rare combination these days. So let's go back to the beginning. You are there as the chairman and Chief Creative Officer at Wickersham Hunt Schwantner, and you're beginning to learn what exactly true brand capital looks like and feels like. I know there are a number of steps to come along the way, but as you were the chief creative officer, what were you learning that influences you today?

Lysle Wickersham: I think the foundation of that journey starts with understanding that every brand has a rational component and it has an emotional component. So a lot of building brands is about human nature and how we think and how we make decisions and how we build relationships. And it's not so dissimilar from how we build relationships with people.

We want to like them, know them, trust them. We want to have that positive emotional thing going. And then there's the rational component too. So at the end of the day, neuroscience has really shown us that most people end up making most decisions emotionally.

Scott Raven: Right.

Lysle Wickersham: So strong brands that are emotionally potent connect with audiences, build long-term value, and build equity. So really that part of my career was a significant driver for gaining that kind of understanding.

Scott Raven: Right. And as we talked offline and we talked about your eventual transition into M&A advisor, one of the things that you pointed out was how much of a shock, for lack of better term, it was to find that investors also have this mix between emotional and rational. That it's not all about the numbers on the spreadsheet and when can I make three X, five X, seven X my money. There is an emotional element to how they think as well.

Investors Make Emotional Decisions

Lysle Wickersham: There is. There's a delta between doing a valuation based on a multiple against revenue or EBITDA. That's called goodwill. And that goodwill encompasses the intangibles around a brand and those drive the emotional decisions that impact willingness to open their wallet. So a lot of that revolves around a brand that's well positioned, emotionally charged, well structured. That creates an emotional engagement with a potential investor where their perceived likelihood of future success goes up.

Scott Raven: Right.

Lysle Wickersham: The risk profile of the investment goes down. That is what they call a multiple modifier. And so those intangibles can often be the difference between a 10X and a 50X when you're at the negotiating table. That affects how you raise capital and your cost of capital. It also affects a multiple on transaction and investment outcomes.

Scott Raven: And I know you're a fan of the phrase relationship first, business follows. And I would assume that this is really the crux of it in terms of the relationships that the people have as they are evaluating these and deciding on the brands and the firms and the leadership. That's going to drive a lot of the business that comes as a result.

Relationship First, Business Follows

Lysle Wickersham: That's a really great point, Scott. Investors aren't just buying a great idea, right? They're buying a great idea. They're buying how good is the timing of that idea. What's the ability to execute and who are the people that are going to do that execution? Do I connect with you? Do I believe in you? Do you resonate with me? Is there an emotional connection? Each of those weighs just as importantly as the others. A lot of people think, oh, it's just all about the idea. I'm going to build it and everybody's going to give me a boatload of money. That's not necessarily the case.

Scott Raven: Absolutely. Now, before you started Brand Think in 2017, you created Briggs Capital prior to that, and there were definitely lessons learned in terms of what is value creation really that's influenced your philosophy at Brand Think. Can you go into a little bit of that?

Lysle Wickersham: Yeah. That was an interesting learning curve for me because that's really where I saw the pragmatic side of doing transactions and how that stuff worked. And it's really where I could see the difference between laying a strategic foundation and building that equity that could impact that stuff. You could see it was a tough sell. And a lot of times, companies that were interested in being acquired thought about this stuff way too late. And they don't really realize as founders or leaders of businesses that building the kind of equity that translates to value is a long game.

And you have to be doing it from the beginning. You have to be thinking that way as an operational philosophy of how you run your business. And if you do that well, you're going to really improve your investment outcomes. If you wait till the last minute, it's not going to work. So that stuff became readily apparent in that environment.

Scott Raven: Why, you know, because obviously as people are positioning themselves for future growth or for enablers of growth, they don't mean to miss steps along the way, but you are suggesting that it happens all the time. Why is that?

Why Intangibles Get Ignored

Lysle Wickersham: Well, I think there's a lot of reasons for that. One of the overriding reasons I think is the intangible nature of these things that have financial impact. They're not easy to measure. You can't really put brand love or preference or salience or things on a P&L. Accountants have struggled to articulate financial value on balance sheets. There's no easy way to do it. Yet the historical data validating the financial value of those intangibles is irrefutable.

Scott Raven: Right.

Lysle Wickersham: However, on a day to day basis it's hard for leadership to understand that. Now, one of the things that you do to try to get around that is you present building brand equity as a philosophy, a way of running your business as opposed to some tangible line item that I invest in. And it's not. It's how you run your business that builds equity over time.

Scott Raven: And I think that's a beautiful segue into the concept that you have coined that you practice, which is brand capital. And the listeners who I have, they may think that the word brand is just marketing fluff or something that only the Fortune 500 companies need, but you are an advocate that when it does what it's supposed to do, which is drive intangible equity, that lowers perceived risk, that it becomes a catalyst and enabler for your business.

Introducing Brand Capital

Lysle Wickersham: It does. The foundation for that Scott really lies in understanding the way brand capital grows and becomes equity. And yes, the idea that brand is a logo or a color or something executional, that's really brand extension. That's not brand strategy. Brand strategy and how I build equity is a frequency over time equation, and it happens at every point of engagement that a company has with its market, its employees, all core constituents. All of those engagements, all of those experiences all contribute to positioning a company and adding value and equity to the brand. So that's why it circles kind of back to the idea of, oh, it's philosophical.

It's how you run your business. It's making sure that what happens in the call center works and what happens at point of sale works. And my user experience on the website is satisfying my brand position and providing the experience that I expect. All of these things are additive and working together.

Each one is a piece of capital that compounds over time. So that's really where brand capital is. Enterprise wide infused in everything a business does. Every decision leadership makes. All that thinking has to be pushed down through management and into employees. The frontline of people delivering on your brand promise. It's synergistic and all inclusive. It's really about the whole business.

Scott Raven: Right. And you know what? As much as we'd love to believe that it's always compounding in the positive direction, additive or multiplicative, it can also work in reverse as well, depending on the operating nature and the decisions that leadership makes over time as well.

The Fragility of Brand Equity

Lysle Wickersham: Yeah, that's kind of the scary part because building equity is a long game. It takes time. And when you do it right and you do it consistently and everybody's aligned, it can have tremendous financial returns but it's fragile. And if you mess that up and you do something wrong and you create bad will with your market or one of your core constituents, the fragility of that. And again, you go back to how do people relate with one another. You know one of your best friends goes bad on you or something, it breaks. It just breaks.

Scott Raven: Yeah, absolutely.

Lysle Wickersham: Yeah. So it matters. It does matter. Trust, Know, Like. That is really the foundation of everything. Yes you have to have good product, good service, everything's got to work. You have to deliver what you promise you're going to deliver. But at the end of the day, the thing that keeps people loyal and builds advocacy is the emotional side.

Scott Raven: Right. Now, I would love for you to go into what you classify as the three pillars of alignment and strength that have to be there in order for your brand equity to compound over time and why these three pillars are so important.

Lysle Wickersham: You've got to concentrate on the strength of your brand attributes. And when you think about how strong those are, that's a part of an evaluation process that every leadership should look at. You are looking at constituent alignment to make sure that there is alignment across the enterprise. And I forget what the third was. You got it right there.

Scott Raven: Market opportunity alignment.

Lysle Wickersham: Yeah, yeah. Obviously those have to align with the market. But if you take a brand and you say, I'm properly aligned, my brand attributes are strong, those are pushing into the marketplace, I've got a clearly defined market opportunity where I can scale. Those three KPIs are pretty strong indicators of success.

Scott Raven: And then collectively these form what you consider to be the third leg of aggregate value creation in association with financial engineering and operations. And when they truly work synergistically together, what does that feel like for the firm, for the leadership, for the founder? What does that feel like on a day-to-day basis?

The Third Leg of Value Creation

Lysle Wickersham: Well, that really comes from understanding how historically private equity has built value.

Scott Raven: Right.

Lysle Wickersham: And they've done so primarily through financial engineering and operational improvements, and that has worked very well for decades. These people have made a ton of money and they've made those kinds of changes and had a five year lifecycle of a business and you flip it and you make money. However, that discounts the notion of how do I make sure I'm concentrating on building that intangible equity that drives goodwill and negotiating leverage and improves investment outcomes. But that model is shifting and building brand equity, attention to building brand equity has become the third leg in the value creation stool.

A great example of that is a firm in Brooklyn called Bullish that is a sort of combination venture capital and brand marketing group and they built Casper mattresses and Peloton and Warby Parker. And they knew that they weren't just building businesses, they were building brands. And those kind of businesses grew up fast. They made a lot of money, they went public and people did very very well. So some private equity people get this and not all of them do but it is really the way to maximize your return.

Scott Raven: Yeah, but I think it's important in order to circle this back to, it's the story beyond the numbers. I remember the story from Adam Grant, that he was presented the opportunity to invest in Warby Parker at early stage. He passed, and obviously Warby Parker turned into something very successful. How much of it is, it's got to be a story that you believe in at the jump?

Emotional Storytelling in Fundraising

Lysle Wickersham: Yeah. When I work with early stage businesses to figure out how they're going to go through that process of raising money, it really does start with the pragmatic side of business strategy. What's my core positioning and my point of differentiation and my market and all those kinds of things.

And then it quickly evolves to, well, based on that strategic stuff, how am I going to tell this story in an emotionally compelling and binding way? How do I do this in a way that reaches people on an emotional level, and that makes a huge difference because people connect with stories in a different way than they connect with data or spreadsheets.

And if you could tell that story and you can get that under their skin and they can believe in what you believe in. And you have the pragmatic side looking good. You have the numbers look good, the ability to scale is all there. The market's well defined and sized, and you put those two things together. That's where the magic happens. And that's kind of Brand Think's philosophy is making sure that you can marry the pragmatics of business strategy with the emotional side of storytelling and building equity and that stuff. And together, that's the formula.

Scott Raven: You know, it's interesting with your joint work that you've done in both brand development and investment banking, that you have a very unique perspective to the following question, which is, what is the biggest misconception founder led businesses have about positioning themselves to raise capital or to eventually exit?

Lysle Wickersham: I'm not sure there's a misconception. I think there is a certain lack of understanding of what it takes to not just build a product or service that you think is solving a problem in the market. That's definitely part of it, but then there's this other thing of how do I build the business? How do I build something that's sustainable and positioned that can grow over the long term and has the foundational elements that attract investors. Because investors want more than just the great product. They want to make sure that you know how to execute, how to scale, that there can be long term financial return for them.

Scott Raven: Yeah, go deeper into that because a lot of people are unfamiliar in terms of just what is the level of diligence that occurs in M&A beyond the numbers, and what do investors have to see as buyers to say, I'm going to put my capital down on this?

What Investors Really Look For

Lysle Wickersham: Well, we touched on a little bit of that earlier. It's a combination of things. It's clearly, do you have a compelling product, service, whatever that is solving a defined problem. That has a clearly defined and obtainable marketplace that you have sized, you have determined that you can obtain. Of course that's the foundational piece.

And if that's there and the timing is exquisite, the market needs this, that solution hasn't been there for whatever circumstance, and you have a team to execute and you understand what the needs are to build a scalable business, which sort of gets into the whole, how much capital do we need? Have we modeled this financially? How are we going to use that capital? And you translate it into financially responsible projections so you can build performance and you can say, that's what this looks like in five years. These are the nuts and bolts of a multiple on invested capital so people know what the potential return of that is. So that's more than just presenting a great product. That's also presenting that you have thought thoroughly about what this business looks like and how it scales. So you have to do both.

Scott Raven: Right. I can imagine that there's a flip side to this that firms who are trying to secure investment capital will say, well, I'm going to reduce investor risk by showing growth numbers and revenue numbers and path to profitability through historicals such that the numbers are going to speak for themselves. But you would say it's a mistake to think that way and then build the brand later in this approach.

Lysle Wickersham: Yeah, I think they go together, Scott. You don't do one in lieu of the other. If the foundational numbers are looking good, at the end of the day you have to make sure that that story is there, because that story, same story that gets investors to open their wallet, it's the same story that's going to get consumers to open their wallet.

So it all has to play together. And again, it's integration. It's the synergy of all these components. It's never one thing on its own that makes it happen. And sometimes the best ideas are simple. Uber was a simple idea and a very simple and compelling story, and its timing was exquisite and it wasn't complicated.

That's another thing that I think people tend to do is overcomplicate things. Simple is always better, is always more effective. And if you can keep it that way and that story is simple and compelling and resonates, then you're in a good spot.

Scott Raven: Now you have a passion for startups and early stage firms that we talked about before. And I'm sure you got a founder or two who's listening on this podcast saying, look, I'm too small to worry about how my brand is going to be perceived in the external marketplace. I've got sales numbers to hit. I've got operations that I want to make sure are tied up so that I'm presenting my baby in the best possible manner. What would you say to that founder that maybe is not thinking about the value of the brand that they are presenting?

You Can't Separate Brand from Business

Lysle Wickersham: I think you have to go back to understanding that brand is a strategic construct before it's anything else. And to define a brand, you've got to define your market context, your core points of differentiation, the proof that you can deliver on that promise. So all those foundational elements that create a brand are what you're going to put into the market. So the idea that you can separate them is illogical and you really can't do it.

As well, you're making sure that you're creating something that is resonant to your first constituent. Your first constituent is always your employees. The people responsible for delivering on the brand promise, providing that consistency and that alignment for delivering that positioning. It's really not a question of can I separate these things. Done properly, you can't. At the end of the day, if you don't do that, you're going to get down the road and realize that you haven't, and you have to backpedal and then maybe you don't have it right.

Scott Raven: And ultimately it helps them in the end with one of their big things, which is if you're raising capital, you're trying to do so as cheaply as possible, and these are all enablers and catalysts to trying to reduce that cost of capital for them.

Lysle Wickersham: It does reduce the cost of capital. And it's the kind of thing that creates long-term value by being consistent now, and I think it's hard sometimes for them to understand that value and why it plays. But if they consider being brand focused from the beginning, and I'm not talking about logos and art and color.

Scott Raven: Right.

Lysle Wickersham: I'm talking about the strategic foundation of a brand. You do that right and consistently from the beginning, it will pay dividends.

Scott Raven: Right. Now, you know that strategic and creative thought in today's day and age is being modified as we speak through AI and you have certifications in generative AI and prompt engineering. As you look towards the intersection of what these new technologies are bringing in with the wisdom and the experience that you bring in terms of overall brand strategy and brand capital creation, how do you see these two coming together in the future?

Lysle Wickersham: I will say that part of differentiation in building a brand is not just the rational, the product service, the features that I offer, it's also in the representation emotionally of that brand and tone and manner and style and personality and those things that are harder to describe. And in many marketplaces it's often parity environments, especially in tech and even companies in the AI space. And sometimes your brand and its personality is one of the primary differentiators in places where people are claiming a lot of the same values in feature sets.

So that stuff really does make a difference. And with AI, you can use AI as a tool to generate foundational content, but it simply is not able to create what humans can create. A human is actually able to connect the dots, innovate, create new thinking. Remember AI is always a regurgitation of everything that's already been out there. So there are certain places that this tool is phenomenal, but creating a unique voice, finding that thing that is a unique expression of a brand, that needs humans. That just needs humans.

Scott Raven: I often say that as smart as AI is, it tries to act like a 7-year-old. It tries to please you as if you're being its father. And sometimes it doesn't always get it right. You have to have the brains to say, where did you get it wrong, son?

Lysle Wickersham: Yeah, it's funny. You can keep asking the AI to do it over and over and over again, and it will just do it over and over and over again, and it is never a situation where there's a right or a wrong. It'll just keep doing that at you. So you need to have talented people doing that kind of work.

And when you figure out some of the brand attributes are things like tone and manner and voice and personality and those kinds of things. And the first decisions for those things are strategic. They connect with who's your audience? Am I creating a personality that can have affinity with this audience? And then what is the actual execution of that? What's that voice? What does it sound like? What does it look like? So all of that stuff has to come together and that's not the kind of thing that AI excels at.

Scott Raven: No. But let's get to you and what you and Brand Think really excel at which is working with these startups and early stage businesses. And after the litany of places and successes that you've had along the way, why is this home for you? Why is this the place for Brand Think?

Why Brand Think and Advice for Founders

Lysle Wickersham: That's a great question. For me, it marries the two things that matter most to me. And it is a little bit of an unusual skillset. It's a cross-disciplinary approach that not a lot of people are doing. Coming from a creative direction background and then going into investment banking and doing that kind of work, for me there's a natural progression of figuring out a strategic foundation for how a business can scale and grow and how to do that, and then figuring out how to tell that story and bring that emotional component. So for me, it marries my two career paths into an offering where I get to do both. And you need to do both to be most effective.

Scott Raven: And I know in talking offline with you that one of the key principles in terms of the operations behind the scenes with Brand Think is these are not transactional business relationships you're trying to create. These are legacy business relationships that you're trying to create, such that it's not just what was produced, the work, but the impact that that had, the ripple effect that it created.

Lysle Wickersham: Yeah. Again it circles back to the long-term nature of building equity if you're really trying to build wealth and value. And so yeah, you lay that foundation and you get it right from the beginning and you put a company in a position to scale around that and get invested around that. That's a super satisfying thing to be able to do because you're getting involved at the level of helping somebody figure out how to structure something and bring a dream and a vision to life. It's a super satisfying thing to be involved in.

Scott Raven: What is your favorite dream of somebody else that you helped bring to life?

Lysle Wickersham: Well, I'm in the middle of one right now. I'm working with a SaaS client. This guy spent a long career in Fortune 500 companies and saw a significant deficiency in young adults today being future ready and spent years developing a core curriculum to help young adults fill that gap that the education system doesn't provide. And when he came to Brand Think, it was at the very beginning, hey, I have this thing that I believe in to give back to these kids and figure out how to help them set visions and goals and know how to do that. And it took about seven months to figure out how to go to market, how to scale that, to do the modeling, to build all the assets, to be able to raise capital.

And he's out there right now about to close a $4 million round to bring this vision to life. It's pretty powerful when you can help somebody satisfy a dream and really help them build something that means something to them.

Scott Raven: Yeah. You know, I'll use this as the segue into our traditional close on the podcast. I always do a tip of the cap to Randy Pausch's book, the last lecture where his final statement was, this was for my kids, right? I'm not going to say this is for your kids, but let's say that this is the next generation of entrepreneurs who have now listened to this podcast episode. What's the one big thing you want them to take away from what they've just heard?

Lysle Wickersham: Great question. I think about that all the time. I am a mentor in a startup organization trying to work with young founders. And I guess the biggest piece of advice is helping kids understand that there's a lot that you don't know, and it's not just about the product idea you have and what you're building.

And so listen to people. Take advantage of mentors. Learn, be open-minded. Know that building a business is different than building a product. And embrace some of this stuff. These are things I wish somebody had told me a long time ago. I don't know if I would have listened or not, but I think that's the value. Be open-minded, listen, learn, let people help you.

Scott Raven: Yeah, and that's often one of the most difficult things for people who are entry level or young, is to be able to realize that they need help from others, and that you get there faster and further if you go together than trying to go it yourself.

Lysle Wickersham: Yeah, that's really well said. Ironically though Scott, I run into the same problem with seasoned leadership. CEOs who don't know what they don't know.

Scott Raven: Yep. It's everybody.

How to Connect with Lysle

Scott Raven: But let's give the folks who have heard this wonderful podcast an opportunity to be able to connect with you, to connect with Brand Think if they are interested and potentially working with you all. How do they find out more about you?

Lysle Wickersham: Yeah. You can go to brandthink.biz. There's a lot of great content about brand strategy and investing and things like that there. If you want to get educated and you can contact me right through the contact form on that, or you can reach me at Lysle at Brand Think dot Biz. Lysle with an S, L-Y-S-L-E. And I'm happy to chat anytime with anybody. I'm all about relationships first.

Scott Raven: Absolutely. And we'll make sure that we have those links in the episode notes. Wow, this has been an absolute pleasure. Any final thoughts before we close this episode down?

Lysle Wickersham: Kudos to you, Scott. You do a great interview. Thank you very much.

Scott Raven: I try. Some days I succeed more than others. I'll put it that way.

Lysle Wickersham: Ah, you did a fine job. Fine job.

Scott Raven: Well, thank you. Thank you, Lysle, for being on the podcast. It was our pleasure. To my listening audience, thank you for spending the time to listen. As always, we implore you take the wisdom that you've learned from these and go forth because the podcast is all about how much impact can we create.

We would love for you guys to subscribe and comment, help us make this better. And if you know people in your life who could use this wisdom, please feel free to share. Until next time, I'm Scott. We'll see you on The Corvus Effect. Take care.

Outro

Scott Raven: Thank you for joining me on The Corvus Effect. If today's conversation sparked ideas about how to free yourself from overwhelm, visit TheCorvusEffect.com for show notes, resources, and our free Sixth Dimensions Assessment, showing you exactly where you're trapped and how to architect your freedom. While you're there, check out the Corvus Learning Platform, where we turn insights into implementation. If this episode helped you see a new path forward, please subscribe and share it with others who are ready to pursue their definition of professional freedom. Join me next time as we continue exploring how to enhance your life through what you do professionally. It's time to make that your reality!