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IR Best Practices: Investor-Analyst Roadshows
Investor and analyst roadshows are often
expensive in time, money and executive bandwidth. Done well, however,
they can also be highly effective in influencing market perception
of your company. Here are 12 top tips for ensuring roadshow success
with Wall Street analysts, the financial community and media.
- Start your planning 8 weeks beforehand
and use a roadshow prep checklist to guide your efforts. You cannot
pull a roadshow together at the last minute — it takes time
to plan, prepare for and conduct. Eight weeks advance prep generally
allows enough time to review and fine-tune your messaging, delivery
and Q&A.
- Put together the smoothest, most concise
(maximum 15 minute) presentation possible — in plain, simple
English. Test it on non-technical, non-financial people: if they
understand it, so will analysts, investors and reporters. If you
don't have in-house staff who can put together a first-rate presentation
or handle all the logistics of a roadshow, hire outside help.
- Rehearse, rehearse, rehearse! Most executives
are so tied up in the business that they don't spend the time
to perfect and polish their presentation — and when show
time comes, they look and feel unprepared. Confidence is 98 percent
of success in making the roadshow work, so spend the time to make
sure company executives feel and sound prepared to deliver not
just their formal remarks, but in answering the toughest questions
likely to be asked.
- If your company hasn't been public very
long, work closely with legal counsel to brief executives on what
they can and can't say. Failure to maintain proper disclosure
controls to prevent violation of Regulation Fair Disclosure and
the Sarbanes-Oxley Act carry stiff penalties. Educate and train
company executives who interact with the investment community
to prevent the release of material information in the first place.
Ideally, brief executives on current messages and disclosures
before each discussion with the financial community and media.
- Schedule the first 2-3 presentations with
the least important audiences — save the most important for
the middle and end of the road show.
- Visual aids work! Bring along product samples
or demos, if possible.
- Do not perform a data dump on the listener
instead of engaging in dialog and relationship building.
- Study investor presentations from peer
companies to see what kinds of information investors want to hear.
Managements (especially those new to being public) tend to want
to go into more detail than the average investor really wants
to know in a one-on-one presentation. Analyzing what peers do
will help you to shape a presentation that delivers what investors
need to make an informed valuation decision about your company
and its future prospects.
- Call or write analysts in advance to inquire
about their specific information needs. Expect to provide proof
points and customer testimonials — not just financial information
— to validate your company's market position and competitive
advantages.
- Choose the right analysts and media to
brief. Too often companies waste precious time briefing analysts
or reporters who don't cover their industry.
- Don't assume that just because an institution
holds one of your industry peers that they will want to own your
company's shares. Consider whether your investment attributes
really mirror the companies you consider your peers.
- After the roadshow, send a handwritten
thank-you note to every analyst with whom you met. It's a courtesy
analysts appreciate, especially when the note comes from top management.
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