Your investor presentation is one of the first things that investors and analysts look for (along with SEC filings) when trying to get up to speed on your company. It’s often the first chance to tell your story in a crafted manner.
In other words, it’s crucial.
An effective deck contains a clear communication of management’s vision, the company’s market opportunity, its competitive advantages, and its growth strategy.
Your company’s investor relations website is one of your most important tools for communicating with existing shareholders and attracting new ones. Yet too often the IR website is neglected, with outdated or irrelevant information, multiple versions of the same document, and obsolete design.
I’ve written before on collaboration between the information “silos” that exist within some organizations and why it is important to establish — and stick to — an internal control process for issuing public information. The other morning, I was reminded why this is so important … and the consequences of what can happen when it breaks down.
Shortly after market open, I received a call from a CFO saying he was surprised by a press release that his company had issued pre-market, about which he was already getting calls from analysts with questions. He had to go to his own company’s website to see what had been released. My second call was from the General Counsel of that same company asking how they could add a Forward Looking Statement paragraph on a material release that had already been issued, as well as make corrections to outdated language in the “About the Company” section.
In a previous blog post, I discussed why it is essential for companies heading into an IPO to carefully evaluate the sales teams of potential investment banking partners before selecting their banks. Their job is to sell your stock to institutional investors. Yet sometimes the distribution capabilities and differences of each bank is underappreciated.
In this installment, I want to explore the importance of maintaining a strong relationship with that sales force after the initial offering is complete, and to share some ideas about how to do it.
Private firms face few regulations governing public statements, so communication missteps aren’t likely to violate laws and spur law enforcement actions.
For public companies, quite the opposite is true. There are legally binding rules in place, and a failure to comply with them can have serious consequences. As a result, it is vitally important that companies provide their employees with substantive training.
If your company is publicly traded or a private company preparing for an IPO, then you likely have two separate communications tasks, one focused on reaching investors and financial analysts, the other on reaching customers and the general public — Investor Relations and Public Relations.
The two obviously perform different functions, serve different constituencies, operate under different mandates, and typically report to different executives internally. Investor communications are strictly regulated. IR professionals are responsible for communicating a company’s business model, financials and future expectations to analysts, institutional investors, investment bankers, and the like. They usually work closely with general counsel, the finance organization, and under the Chief Financial Officer. Missteps, such as divulging information that isn’t publicly available or engaging in marketing-style hype, can breach securities law and lead to a number of serious problems — shareholder lawsuits at the top of the list.
When shopping for a major purchase, say for a new home or car, many people wisely draft lists of must-have features and optional nice-to-have features.
Compiling a list of needs and wants is also valuable to companies searching for an investment bank, especially given how frequently they fail to evaluate a key feature: the banks’ institutional sales forces. During my 18 years on Wall Street, I can’t tell you how often I saw companies make the mistake of considering the right sales force a want-to-have feature, when they should have considered it a must-have.
When it comes to investor relations (IR), remember that your company’s Internet presence often makes the first impression. In today’s frenetic capital markets environment, potential investors will often use your corporate website to quickly understand the fundamentals of your business before they decide to allocate time to a meeting with management.
The primary purpose of having a corporate website, of course, is so that you can easily share your company’s “story” with the marketplace. In order to be effective, the story must be communicated thoroughly, accurately and consistently across your website and all of your digital media, in a way that is easy for visitors to consume, understand and navigate.
One of our clients, a recently public diagnostics company, settled an ongoing royalty dispute with a major pharmaceutical company. The settlement amount was significantly lower than what our client had accrued, resulting in nearly $750 thousand upside to their P&L in the upcoming quarter.
The company assumed they needed to issue a press release in addition to the Securities and Exchange Commission’s (SEC’s) disclosure Form 8-K, but was a press release really merited?
One of the first places investors look to learn about and form an opinion of your company is your investor relations (IR) website. Often a microsite accessible from your corporate website, your IR site puts at investors’ fingertips the data and information they need to evaluate your company and make decisions about investing.
Yet IR websites do more than provide investors and sell-side analysts with numbers and percentages. Done well and meticulously maintained, they communicate who you are as a company and enable you to cultivate relationships and build trust, not just with the investment community but also with the media, your board, the corporate community, and the general public.