An Interview with Sonoma West Publishers, a Local Newspaper’s Experience with a Direct Public Offering
What is Sonoma West’s mission?
Sonoma West Publishers is a small newspaper group devoted to local community news coverage, a mission we have been following for 154 years. Each of our four newspapers is actually older than the incorporated cities they cover.
Why did you choose to do a direct public offering (DPO) to raise capital for the fund?
The DPO funding model allows for a broad base of local and smaller community investors. Readers and local businesses gain an extra connection and added sense of pride in the local newspaper. The DPO structure is superior to seeking a commercial bank loan or taking on larger minority partners. The structure also allows for continued independence for our editorial voice.
What were the long-term benefits of a doing a DPO?
New community investors will become better connected to our local journalism efforts via a series of live events, investor-only meetings and periodic reports from the publisher. Long term, we may seek another DPO campaign in the future, depending on the successful growth and sustainability the current investments produce or support.
Did any of the outcomes surprise you?
We weren’t too sure what to expect, since we were the first newspaper in the country to launch a DPO. We experienced some slow periods of acquiring investors, but lately as we reach our expire date, we are gaining investors almost daily.
How much are you raising and how long will it take to raise that amount?
Our goal was $400,000 with the 12-month stock offer that expires Jan. 30, 2019. We are currently at 70% of that goal with almost 100 investors.
What were some of the challenges you faced and how did you overcome them?
We are a small corporation, owned by a husband and wife. We did not hire or do any outreach for marketing or other support. We relied on our own website and newspaper announcements and some word-of-mouth from early investors. We never encountered any opposition or criticisms. Quite the opposite, we met with lots of enthusiasm and encouragement, but not everyone who said they would invest has ended up writing a check.
What were your favorite aspects of the DPO process?
We received very personal testimonials in support of our journalism and our journalists. Many investors said we are invaluable in defending democracy. Journalism is hard work, with low pay. The DPO campaign allowed us to explain our roles in the local community and a free society.
Could you share 3 pieces of advice for other groups considering a DPO?
1) Be ready with your marketing plan early. Don’t wait for state approval because the 12 months can go very fast. 2) Enlist marketing and campaign help form your best friends or local associates. Test your messages early and often. 3) Don’t be afraid to ask for money and don’t be afraid to ask multiple times of the same people.
How do you hope to see Sonoma West grow in the next few years?
The DPO community investment has shored up our basic business foundation and will provide for a stable staff. Newspapers must be very innovative right now in this disruptive Digital Age. We seek to grow stronger at our core of publishing local news, and we seek to expand into new journalism ventures like our “reader-powered” newsroom, series of live community events and more enterprise and investigative journalism.
How can people get involved and support you?
Our DPO campaign and new newspaper business model was featured in a New York Times article in August, 2018. We received lots of national and newspaper industry attention. We aim to be a successful trendsetter for our industry and hope we can help other small newspapers stay in business and better serve their own communities through the many new innovations we are putting together. It would be great to attract some foundation or grant support, added to a Lenfest Foundation grant we already have received.