Dos And Don’ts For Successful Road Show Presentations

In a survey we undertook of five-hundred money managers who invest in nanocap and smallcap companies, IRG learned that 95% of all the buy-side fund managers we queried rated one-on-one meetings as their preferred method of learning about a company. The vast majority, 87%, considered one-on-one conference calls the second best method. Interestingly, less than 65% favored general conference calls, and less than 50% liked to use a company website as a source of information.

Before we talk about the purpose of investor meetings, I want to remind you of a seemingly obvious point: As the company’s representative, the CEO sets the tone for every IR meeting. Like it or not, a company is judged by the first impression made by the CEO. He or she is the party responsible for interacting with the investment community. As such, every aspect of his or her appearance and demeanor are noticed, even if subconsciously. In fact, the CEO reflects the company’s image in all interactions, including planned meetings and conference calls, as well as through quoted statements in press releases, and in crisis management.

In the first impressions category, your verbal impression is as important as the physical/visual. Your first impression must feature articulate speech, enunciated beautifully and delivered with enthusiasm. This is not something most of us consciously think about, but it is important. I know that I am prone to show my Long Island “roots,” and that if I am not careful I might use such colloquialisms as “yeah” and “yup” instead of “yes” (along with far too many “ums,” if I’m really being honest). I’m working on being more conscientious, and you may also need to listen to yourself and think before you speak. Make sure you always speak clearly and articulately. The words you say are also judged by the way you say them. The last thing you want to do is damage your presentation because of poor enunciation and delivery.

ABCs: Always be Closing
The one thing to never forget at an investor meeting is that its purpose, first and foremost, is to inspire people to invest in your stock, hold it, and buy more! I highlight this because, believe it or not, this point is often overlooked. Every time you speak — whether in person or in a press release — YOU MUST ALWAYS BE CLOSING. It is all well and good to meet with an investor and walk out thinking: “That meeting went well.” It is a heck of a lot better, in my opinion, to walk out, check your trading, and discover that your stock is starting to move up!

You might be thinking, “Yeah, right. Nobody acts that fast!” I assure you, we’ve seen it happen many times, and if we meet I’d be happy to provide the examples and stock charts to prove it. Good presentations, and I mean only those delivered with previously disclosed information and totally above board, get people to invest — and yes, sometimes immediately.

The following story, as told to me by Peter Kash, Chairman of Two River Group Holdings, and former adjunct professor at the Wharton School of Business, is an example of how to increase your odds of this happening.

Peter had done a one-on-one conference call with a potential investor, and at the end he asked the individual, “What would it take for you to invest in my company?” The man replied, “I would never invest in your company.” After a beat, Peter said, sincerely: “Thank you!” Shocked, the man asked, “What are you thanking me for?” Peter replied: “Well, from what you just said, I learned two things. First, you are the decision-maker. Second, since you are the decision-maker, we just moved closer to your investing in my company, which I really want you to do.” Silence. Then, the man said, “What is the least amount I can invest in your company?” Peter told him. The man wrote a check that day, mailed it, and over the years since has taken positions — albeit modest ones — in almost every deal Peter has brought to him.

The lessons here, to me, are: Ask for what you want and, if they say “no,” ask what it would take. Also, let the potential investor know clearly and directly that you really want them to invest with you. Sometimes that alone will carry the day. Remember, a potential investor wants to get to know who is running the company, what kind of grit and determination you possess. Don’t be afraid to show how committed you are to your vision for the growth and success of your company!

Now, let’s continue to focus on the purpose of investor meetings.

1. Build Greater Awareness of Your Company

At the risk of repeating myself, even if you are an officer of a great company doing great things, and you have a great business model, you still have to tell people about it, repeatedly. If you do not make the time to go out in person to tell your story in the right way to the right people, rest assured that some other CEOs will be out there telling theirs. And they will gather up the trading dollars that could have been yours.

2. Give Your News a Greater Investor/Consumer Base

Each meeting provides you with the opportunity to cultivate a new investor. Of course, not everyone is going to invest on your first “date.” Most people don’t get married impulsively either. Keep in mind that with each meeting you start a courtship process. Ultimately, the result you want is a committed relationship, represented by a long hold of your stock.

 The basic underlying expectations for a marriage are similar to those of a good presentation:

• I want to feel excited.

• I want to feel secure.

• I want to trust what you are saying.

• I want you to always tell me the truth.

• I want to know that you deliver on your promises.

• I want you to be the best investment for my future security.
   

3. Make Your Company a Name “On The Street”
The more often you put your company’s story in front of people, the greater the odds that your stock price will rise. The more people hear about your company, the more it will be on their minds and the more likely they’ll think it’s time to own some of your stock. If you are a sincere, believable person who delivers on your promises, everyone will be happy. Getting your company’s name out is key. Plan for regular meetings with the investing community and for as much positive media coverage as possible. And remember: ALWAYS BE CLOSING.

 4. Keep Shareholders Happy By Keeping Them Informed

Shareholders like to be kept informed. Unpleasant news needs to be delivered as directly and honestly as possible. When delivering the bad news, you should also remind them of all the good things you’ve already done and accentuate your positive plans for the future.