One of the most critical parts of the initial public offering (IPO) process is the road show. It’s the intense period when leaders of private companies that plan to go public explain their vision for the business to the press and potential investors and answer their questions about it. It’s the primary vehicle for building excitement around the IPO.
Warning: Road shows can (and often do) go wrong. Rather than attracting reporters and investors, they instead turn them off.
Some of the most common roadshow pitfalls are:
- Presentations that don’t tell a coherent story, look unprofessional or contain errors
- Incomplete, inaccurate or overly optimistic financials
- Limited proof points supporting the financials
- An unfocused, unrehearsed leadership team that comes across as unpolished or lacking conviction
- A CEO or CFO who is unable to answer straightforward questions
On top of all that, if the firm’s online presence (website, news coverage or social media) is inconsistent, looks unprofessional or contains unexpected ‘surprises’ related to the company or its leadership, the roadshow presentation itself almost won’t matter.
So, what can you do to avoid roadshow-related mistakes that can get in the way of a successful IPO? It comes down to three things.
1. Prepare a professional roadshow.
Build credibility by developing a road show presentation that tells your company’s growth story clearly and concisely. Ensure your narrative and financials tie together and are accurate, including revenue, expense, outlook, income and cash flow projections. Being too optimistic is a sure way to raise questions in the press and with investors.
The live presentation and supporting documentation should paint a detailed picture of what the business does, how it does it and what makes it unique in comparison with its competitors. Using clear and compelling storytelling is critical because reporters are more likely to write about an exciting disruptive business, with a defined course to achieve industry leadership. In the same way, investors want to put their money into companies that fire their imaginations and are backed by solid financials.
2. Rehearse the presentation.
Your company’s CEO, CFO and other spokespersons should practice and be prepared to speak with the press and in front of investors. Most founders of startups and the people they surround themselves with are experts at what they do, but are not necessarily “mediagenic.” It’s worth the extra time and effort to rehearse presentation delivery (in front of a camera, if possible) to enhance audience engagement skills. Delivery should be polished, but not slick — being knowledgeable and authentic is a better goal.
Tip: One of the best investments a firm undertaking an IPO (or any type of capital raising activity) can make is in a comprehensive set of frequently asked questions (FAQs). Being aware of the things reporters and investors may ask ahead of time — and having ready answers to them — will go a long way toward avoiding missteps and building credibility in the investment community. Levage the FAQs on your website so reporters and potential investors can get ready answers to their questions about your firm.
3. Refine your brand.
As a final step, ensure that all visible aspects of your business — its website, brand, messaging, thought leadership, press coverage and social media presence — appear coordinated, polished and professional. Many early stage companies underinvest in a unified brand strategy in order to save precious cash. However, a clear, well-defined brand is one of the first things most reporters and investors look for.
Your IPO: Next Steps
Most companies don’t have the internal resources needed to develop professional financial presentations, train leaders on how to deliver them, and create an extensive suite of public-facing marketing and communication assets. Even working with Tier 1 investment banks will not ensure quality presentation materials.
In the same way that firms approaching an IPO hire outsourced legal, accounting, technology and financial advisors to guide them through the process, many partner with an agency focused on strategic branding that’s also experienced in creating investor communications. Doing so transforms privately held companies into polished and professional public companies able to effectively interact with investors, the media and the public at large.
Did you know: Carpenter Group has delivered industrial-strength capital-raising materials and brand enhancements for clients at many stages in their capital raising initiatives? Learn more by contacting RuthAnne Dreisbach at 646.876.7857 or firstname.lastname@example.org.