TOP 8 MUSTS IN MICROCAP INVESTOR RELATIONS FOR 2019

3 years ago

As originally published on: medium.com

As a micro-cap investor relations firm, our goal is to grow a company’s visibility and increase overall credibility. This is achieved through authentic and effective communication, which has a direct impact on shareholder value. However, maneuvering through capital markets is easier said than done. It requires anticipating corporate and market conditions, understanding the microcap ecosystem, and identifying the most optimal way to communicate.

Our experience of over 20 years has taught us that each company has its own unique strengths, challenges, and goals. As financial communication continues to change, it is imperative to cater to the way investors receive and digest information. We advise our clients to keep up with the ever-evolving needs of investors as well as shifts in medium, but in a way that continues to communicate core principles. To make our process a bit more transparent, we have compiled a list of eight key points essential for any micro-cap company’s Investor Relations strategy.


1. Strategically Communicate Key Messages
Public awareness and exposure are essential elements to growing a microcap company. It is critical to frame and structure core messages in a way that resonates most with your target audience. As a microcap company, the ability to attract and retain new investors is heavily reliant on injecting awareness of your company’s key messages into the public. A well-executed communication strategy can turn passive awareness into active participation.


2. Develop and Maintain an Investor Targeting Strategy
The best message means nothing if it falls on the wrong ears. Creating an investor-targeting list is essential to attract the right type of investors for your company. In the ideal situation, the list serves as both a guideline and playbook for approaching potential investors. After all, reaching out to investors is a process, not a one-off event. It requires constant updates and status reports tied with a bit of marketing to keep investors interested.


3. Develop and Maintain a Consistent Investor Outreach Program
A consistent investor outreach program is not often a high priority for most microcap companies, which is a mistake. A well-crafted investor outreach program ensures that the company’s communication has a consistent tone and is persistently shared. As technology evolves, the ways to deliver information grow too, so it is important to consider new strategies to spread word of what makes your company unique.

One popular option is video production — while expensive compared to other mediums, videos represent an easier way to grasp an idea or message quickly. Other investor outreach avenues to consider include fun, interactive ways to present financial data, podcasts, event invitations, or email newsletters.


4. Create and Maintain an IR/PR Calendar
Plan ahead and create a 6–12 month Investor Relations calendar. Be sure to include key points such as press release topics, important conferences, and any business-related travel time or time out of the office. Once the plan is created, distribute the agenda to everyone on your team including your Investor Relations firm. This advance planning works wonders for avoiding administrative blockades and approval delays due to unexpected absences.


5. Distribute News Effectively
A successful media relations program promotes the proper type of visibility for your company and creates an online voice that will draw investors, customers, and potential business partners to you. For many micro-cap companies, the right PR can facilitate a broader brand awareness that reaches beyond simply issuing press releases. Some characteristics that make for a powerful media relations program include:

• Transparency is critical, as reputation management is built on trust by being honest and forthright with media.

• Position your company as an industry leader. This can be achieved by publishing thought pieces on industry trends or analyzing relevant news.

• When to post can affect engagement numbers — research by Marketwire suggests that the most popular times to post press releases are Mondays and Tuesdays between 8am and 9am. Alternatively, sending out press releases during a unique time slot can help you stand out.

• Consistency is key. Throughout good or bad news, keeping PR communications steady will keep your company from fading in the minds of your audience.


6. Attend Investor Conferences
Investor conferences unite industry leaders and potential investors together, creating an audience that is interested and invested in your space. This perfect mix of people creates an excellent opportunity to present a company’s story in a variety of settings, from speaking on a panel to networking events. This exposes the company to investors, analysts, and bankers in a much more intimate setting than an online banner ad could ever hope to compete with.

Of course, it would be ideal if a company could make an appearance at every relevant conference, but that is not practical. Instead, take a step back and work with your Investor Relations firm to identify the events that will have the most impact. Some quick steps to determine the most impactful events are as follows:

• Have a game plan on whom to meet while at the conference, and start scheduling meetings with these people in advance.

• Track interactions with key people and remember to follow up. Promising more information and not delivering can only hurt a company’s reputation.

• Take advantage of networking opportunities and leverage your Investor Relation firm for introductions to their contacts.

Quick Tip: Try and get feedback from investors afterward. This can give valuable insight on the effectiveness of communication efforts.


7. Leverage Social/Digital Media
Become a thought leader. Incorporating social media such as Facebook, LinkedIn, Twitter, and blogs are some of the most accessible ways to establish a company as a leader in the space. According to a survey conducted by the Brunswick Group in 2014, institutional investors and sell-side analysts look towards company publications as their primary source of information. Additionally, social media has become a more prominent means for investors and analysts to gather actionable information.

Digital media can be incredibly powerful if a company leverages different networks and platforms to reach a wide audience of stakeholders. One thing to keep in mind is that the casual tone of most social/digital media presences does not mean relaxed practices — proper protocols and due diligence is still critical.


8. Properly Prepare for Roadshows
Roadshows can be one of the most impactful investor relations activities for any company, as it provides a personal way to reach high impact investors and stakeholders. During roadshows, the company’s senior management and Investor Relations Officer (IRO) spend time meeting face-to-face with shareholders and potential investors. Providing a human touch to a business relationship is something that technology can never replace. Here are some high-level tips to make the most of a roadshow:

• When organizing a roadshow in a priority region, leverage relationships to present both in-house with brokers in addition to one-on-one meetings with portfolio managers.

• Before each meeting, ensure the road team is familiar with the institution and brainstorm potential questions the firm may ask. A portfolio manager of a REIT will field very different questions than an industrials analyst. More firm-specific knowledge also helps the roadshow identify what the firm values, leading to more targeted presentations rather than a one-size-fits-all approach.

• Identify investors who are likely to advocate for you within their company. Having a champion helping push for you can make deals much more likely to succeed.

Please feel free to visit us to learn more about best practices at pcgadvisory.com