Navigating Capital As A Woman: Margery Kraus Of APCO On Top Strategies for Women Founders, CEOs and Leaders Seeking Institutional Investments
An Interview with Vanessa Ogle
Align Goals With Investors: Ensure the goals of your potential investor align with yours. Misalignment can lead to constant problems regarding investment decisions, dividends and control. Some investors have short-term focuses, while others think long-term, so clarity is crucial.
Despite making remarkable strides in the business world, women continue to face unique challenges when seeking institutional investment. In this series we would like to discuss the process of securing capital from institutional investors, and provide actionable strategies to help women founders, CEOs, and leaders navigate this critical aspect of business growth successfully. I had the pleasure of interviewing Margery Kraus.
Margery Kraus, a globally recognized master storyteller and communications innovator, is the founder and executive chairman of APCO, a global advisory and advocacy consultancy headquartered in Washington, D.C. She has deep expertise in providing strategic counsel on issue-based communication, crisis management, market entry and corporate reputation across diverse industry groups. Margery founded APCO in 1984 and transformed it from a company with one small Washington office to a multinational consulting firm in major cities throughout the Americas, Europe, the Middle East, Africa and Asia.
Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?
My career journey began as a high school civics teacher. That experience in the classroom led me to help start the Close Up Foundation, which since 1971 has brought more than one million high school students and teachers to Washington, D.C. to learn the ins and outs of the U.S. system of government. This experience deeply ingrained in me the significance of personal engagement, understanding of our world and how we find our voice.
I founded APCO in 1984 and its growth was a step-by-step process, growing by being affiliated with various groups to build capacity without lots of capital. We started as an affiliate of a law firm — Arnold & Porter — and as an affiliate, we sought to partner with the lawyers to provide services to their clients and ours. It was a novel concept at the time and was slow going. Seven years after founding APCO, we spun off from Arnold & Porter, becoming part of Grey Global Group, a large publicly traded advertising firm.
At that time, APCO was a modest $3 million business. A decade later, when we parted ways with Grey, we had grown to a $50 million enterprise. This remarkable growth was largely driven by our reinvestment and the momentum gained from building scale, affiliated with a global company. We managed to achieve this impressive expansion somewhat under the radar, by strategically reinvesting our profits back into the company.
The year 2004 marked another crucial turning point. I led the initiative to repurchase Grey’s shares, with the support of private equity. The following decade was arguably the most challenging period in our history. We were completely independent, trying to establish ourselves in new markets. We had some private capital invested in the firm but didn’t always see eye to eye with our strategy and plans for expansion.
The situation improved dramatically when we exited these investors with the help of several private finance firms and Citibank. Their support was instrumental in allowing me to buy out these investors, thus transforming APCO into one of the largest privately-owned, and majority women-owned, businesses in the industry. Today, APCO boasts over $225 million in revenue, more than 1,200 employees and a global presence across more than 30 locations with work in over 80 markets.
Can you share the most interesting story that happened to you since you began your career?
During our management buyout, dismissive investment bankers underestimated our ability to succeed and raise the necessary capital. Their arrogance caused them to miss a clause in my contract that required my approval for any buyer of the shares. After a blind auction where our bid was not accepted, I leveraged this provision in the contract, which caused reconsideration of the bids. In this renegotiation, we prevailed and ultimately acquired the shares, as we would only approve this transaction.
This experience illustrated the power of being underestimated. The banking world undervalued our team’s drive and cohesion, failing to recognize the true value of our company’s culture and determination. APCO’s team, united by a common vision and willingness to make sacrifices, demonstrated that the real worth of a company often lies beyond mere financial metrics. Our collective enthusiasm, excitement and belief were worth more than any monetary offer. This shared commitment was what enabled us to successfully navigate the transition, grow the company and achieve something truly positive.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
During my career, especially the early parts of it when often I was the only women “in the room”, I had a number of experiences that were quite surprising, but I learned to turn to my advantage.
For instance, during a visit to a foreign country, a high-ranking official mentioned through an interpreter that he had never dealt with a woman president before, except in his private quarters. There were a lot of people around so I had to think fast. I said, “There are two things to know: you have to say yes to everything I ask for, and we’ll never talk in your private quarters.” He found it hysterical, and it diffused the tension. This taught me the power of humor and the importance of understanding cultural differences. It’s essential to assess situations carefully and respond appropriately rather than being offended.
Another memorable moment involved a male client during a strategic dinner. After proposing an idea, he remarked, “That is really brilliant. You sure you’re not a man?” I think he meant it as a compliment so instead of getting offended, I used humor to navigate the situation. Humor has often been my best recourse in handling unexpected and potentially awkward moments.
For instance, while traveling with a senior colleague, we attended an event hosted by a high-ranking diplomat. The host, excited to see my colleague, kept mistaking me for the coat check girl. After several instances, my colleague pointed out, “You realize that’s my boss.” This moment of humor served to subtly address the sexism and provided a lighter way to handle an otherwise uncomfortable situation. These experiences taught me not to take myself too seriously and to use humor as a tool to navigate complex interactions.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
During our first buyout when APCO left Grey and we were buying back shares, we did utilize some outside funding. On the final day, I was short by a large sum of money. Grey was willing to hold some paper, but a potential competitor was in the process of buying Grey, and I didn’t want them holding that paper. At that crucial moment, one of our current board members wrote a check on a handshake. Today, he’s our second-largest shareholder, and has done very well with the growth of our shares but back then, it was pure belief in our potential. His support in that critical moment is something I’ll never forget.
Additionally, there were several individuals who provided invaluable advice. When I was trying to exit our investors from that first tranche, three or four mentors reassured me and affirmed that the demands being made were unrealistic. Despite my lack of experience in the field, their understanding of the situation provided me with immense comfort and confidence to move forward. Their guidance during that pivotal period was instrumental in helping me navigate the complexities of the buyout and beyond.
Is there a particular book that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
To be honest, I would say probably my own: “Roots and Wings: Ten Lessons of Motherhood that Helped Me Create and Run a Company.” Writing it forced me to reflect on various events and decisions throughout my career, allowing me to understand and appreciate the good decisions I made. Before documenting these experiences, I hadn’t fully considered many of them.
The process of writing helped me clarify my thoughts and made them more tangible. It also allowed me to take a moment of personal pride in what I had accomplished. Through this, I gained a deeper understanding of my journey and the lessons learned along the way.
How have you used your success to make the world a better place?
Using my success to make the world a better place has always been a driving force for me. It starts with why you’re in business: if it’s just to make money, that’s fine for some, but I’ve always believed in bringing together intelligent people to tackle contentious issues or create new opportunities. When clients are willing to engage and listen, and you can offer advice that helps them improve, it’s a small contribution that can have a lasting impact.
For me, contributing to a better world could be achieved in various ways — some might choose to run for office or work through NGOs. I chose to do it through a business with both purpose and values. This approach allows not only personal and staff contributions but also extends through the clients we work with, magnifying the positive impact.
What do you think needs to change in the investment landscape to support more women entrepreneurs?
People need to stop thinking about women and men separately in the investment landscape. It should be about the marketplace for good ideas, not the gender of the person asking for money. Statistics show that women are good credit risks, they work hard and create value just as men do. However, they might not be as aggressive in seeking funding because the resources haven’t been as accessible. This change requires men to actively support women by purposefully looking for opportunities to invest in women-led businesses and celebrating successful outcomes.
Furthermore, investing in women’s businesses shouldn’t be seen as a philanthropic effort or social responsibility, but as a sound business decision. Businesses need to adopt an open-minded approach and avoid categorizing women-led ventures as charity cases. Programs that support supplier diversity and ensure women have an equal chance can help these businesses scale by attracting customers. Organizations like Women Presidents’ Organization (WPO) showcase numerous success stories where women have effectively led, scaled businesses, raised funds and delivered services. Recognizing these successes is crucial to fostering a more inclusive investment environment.
Can you share a defining moment in your journey to secure institutional investment? What was a key lesson you learned from that experience that other women can apply in their funding efforts?
A defining moment in securing institutional investment came when we partnered with Citibank, building our relationship on trust, mutual respect and honesty. It wasn’t always smooth sailing for APCO, and at one point, post-recession of 2009, we hit a rough patch where our performance faltered for a year or two. A team from Citibank came in to discuss the situation. Despite being 25 years into the business and always responsible about our finances, I felt embarrassed. During the meeting, I asked them what they really thought of us after presenting our recovery plan. To my surprise, they commended us for addressing the problem head-on, finding a solution and being on a path to recovery. They expressed their desire to support us, turning a potentially bleak moment into a positive one. This reinforced the importance of transparency and integrity in our banking relationships.
The key lesson I learned is that these relationships are a two-way street. We were fortunate to have bankers who valued our vision beyond just the finances. By sharing our broader vision for the company and how we fit into the marketplace, we fostered a genuine partnership. This approach transformed our interactions from mere transactions into meaningful collaborations. For other women seeking funding, it’s crucial to maintain transparency, communicate your vision clearly and build trust with your financial partners. By doing so, you can cultivate supportive and proactive relationships that go beyond just financial backing.
In your experience, what key factors do institutional investors look for in women-led startups that may differ from their general investment criteria?
In my experience, the level of scrutiny for women-led businesses is often different. For instance, I’ve had banks request personal guarantees even after 25 years in business, a requirement I believe stems from gender bias. Women may not have the same extensive networks as men, and they tend to be more straightforward about their capabilities. Men, on the other hand, are often more aggressive in their pursuits, which can leave a stronger impression even if not entirely accurate. Some obstacles women face are self-imposed due to socialization, leading to a lack of self-confidence that can hinder investment opportunities.
Additionally, societal gender biases further complicate matters. While conditions have improved significantly over the past 40 years, and it’s no longer uncommon for women to run businesses successfully, there’s still a long way to go. Women must often work harder to prove their worth in a landscape that traditionally favored men. However, the increasing number of successful women-led businesses today demonstrates progress and provides hope for a more equal future in entrepreneurship.
It is also great to see the increased number of funding sources purposefully looking for success women owned business in which to invest. Let’s hope this effort continues!
How do you build and leverage networks to gain access to institutional investors interested in supporting women-led businesses?
For more than a decade, I chaired the Women Presidents Organization (WPO), which is an excellent network for women entrepreneurs. WPO is known for helping women scale their businesses and has strong banking relationships, making it a great starting point. It also provides a peer group where you can gather information and network with others. Other organizations like the Committee of 200 (C200) offer support and create a network of women trying to help other women.
Additionally, there is an increasing number of women-led firms that prefer to sponsor women-owned businesses. For startups, organizations like Golden Seeds are invaluable. As businesses grow, other entities focus on aiding women-owned enterprises. It requires some research to find the right fit, but it’s crucial to be proactive and let people know you’re looking for partners. You never know where the next lead might come from.
How have you navigated the negotiation process with institutional investors to ensure fair valuation and terms for your company?
Navigating the negotiation process with institutional investors to ensure fair valuation and terms requires a strategic approach. Engaging professional firms that specialize in valuing companies is crucial. In the service industry, experienced bankers can determine fair value based on factors like size, turnover and EBITDA. It’s advisable to use a professional banker who understands the industry and can assist with negotiations to avoid costly mistakes. Though hiring a banker is an expense, it’s generally covered by the deal proceed, making it a worthwhile investment.
Additionally, seeking advice from others who have undergone similar processes can provide valuable insights. Learning from their experiences can help set realistic expectations for your firm’s value and ensure you secure a fair price. Typically, going to market will attract multiple offers, giving a clearer picture of the company’s worth. Valuations often heavily rely on EBITDA and associated multiples, but other factors also play a role. For instance, personal investments in business growth can affect valuations differently than borrowed funds used for acquisitions. While the valuation process can seem complex, engaging knowledgeable professionals and leveraging the experiences of peers can lead to a favorable outcome.
Can you please share your “Top 5 Strategies for Women Founders, CEOs and Leaders Seeking Institutional Investments”? If you can, please share an example or story for each.
- Align Goals With Investors: Ensure the goals of your potential investor align with yours. Misalignment can lead to constant problems regarding investment decisions, dividends and control. Some investors have short-term focuses, while others think long-term, so clarity is crucial.
- Define Decision-Making Roles: Be clear about how decisions will be made and what role the investor will play. Understand the level of control they will have, especially if financial targets aren’t met. I once encountered investors who wanted provisions allowing them more control if we missed targets. I refused, believing no outside investor knew APCO better than I did. It’s common for investors to want this control, so be cautious.
- Assess Investment Needs: Determine if you truly need equity investment, as there are alternative financing options. Debt financing might be preferable if you’re only seeking funds without giving up equity. During our management buyout, we opted for debt financing to retain more equity for future staff, which proved to be a smart decision.
- Know Your Style and Needs: Understand your leadership style and what you need from an investor. Choose partners who complement your strengths and add value. For example, when seeking investment, I looked for individuals who understood financial markets, aligning their expertise with my operational knowledge.
- Embrace Risk: Understand that entrepreneurship inherently involves risk. Being overly risk-averse can hinder progress. While it’s essential to avoid reckless decisions, accepting and managing risk is part of the journey. Worrying about every potential risk can drive you crazy, so maintain a balanced tolerance for uncertainty.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good for the greatest number of people, what would that be? You never know what your idea can trigger.
Right now, it’s tolerance. I’ve always believed in moderating my thinking and finding compromises. Bringing together people on both sides of an issue and crafting a solution that nobody is entirely happy with, but everyone can live with, is essential. This approach fosters a better world where, even if we can’t agree on everything, we can strive for a common goal that benefits everyone.
My goal would be to eradicate hatred passed down through generations. Abolishing these deeply ingrained prejudices is crucial for creating a more harmonious society. If I could do anything, it would be to promote tolerance and understanding, ensuring that future generations learn to appreciate and respect one another’s differences. This, to me, is the foundation of creating a better situation for everyone.
We are very blessed that some very prominent names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch with, and why? He or she might just see this if we tag them.
If I could have a private breakfast or lunch with anyone, it would be Mackenzie Scott. Following her divorce, she came into a substantial amount of money, but what truly captivates me is how she’s utilizing those resources. Mackenzie has taken bold steps in philanthropy, supporting a diverse array of causes with significant impact.
Her approach is not only innovative but also shows a willingness to take risks to address systemic issues. She appears to be a genuinely thoughtful and inspiring person. Her commitment to making a difference and her fresh perspective on giving have piqued my curiosity, and I would love to hear more about her journey, motivations and the stories behind her philanthropic endeavors.
How can our readers further follow your work online?
https://apcoworldwide.com/people/margery-kraus/
https://www.linkedin.com/in/margerykraus
https://www.twitter.com/margerykraus
Thank you for these fantastic insights. We greatly appreciate the time you spent on this.
About The Interviewer: Vanessa Ogle is a mom, entrepreneur, inventor, writer, and singer/songwriter. Vanessa’s talent in building world-class leadership teams focused on diversity, a culture of service, and innovation through inclusion allowed her to be one of the most acclaimed Latina CEO’s in the last 30 years. She collaborated with the world’s leading technology and content companies such as Netflix, Amazon, HBO, and Broadcom to bring innovative solutions to travelers and hotels around the world. Vanessa is the lead inventor on 120+ U.S. Patents. Accolades include: FAST 100, Entrepreneur 360 Best Companies, Inc. 500 and then another six times on the Inc. 5000. Vanessa was personally honored with Inc. 100 Female Founder’s Award, Ernst and Young’s Entrepreneur of the Year Award, and Enterprising Women of the Year among others. Vanessa now spends her time sharing stories to inspire and give hope through articles, speaking engagements and music. In her spare time she writes and plays music in the Amazon best selling new band HigherHill, teaches surfing clinics, trains dogs, and cheers on her children.
Please connect with Vanessa here on linkedin and subscribe to her newsletter Unplugged as well as follow her on Substack, Instagram, Facebook, and X and of course on her website VanessaOgle.
Navigating Capital As A Woman: Margery Kraus Of APCO On Top Strategies for Women Founders, CEOs and… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.