On the Road Again: Key Takeaways from our First In-person Non-deal Roadshow in 2023
Our overseas client, a fast-growing micro-cap (defined as public companies under $300 million in market cap) just completed their first in-person non-deal roadshow on the East Coast this week. The tour introduced top management to existing and potential investors over the course of two days of meetings in the New York metro. The company combined its roadshow with a business partner meeting which is a cost-effective approach to investor outreach, a key investor relations program.
Key takeaways:
BIG PICTURE: Small and micro-cap portfolio managers are specialists with various fund objectives. They tend to have a broadly diverse universe of investable opportunities. For reference, there are approximately 4,300 exchange-listed micro-cap public companies in 2022, according to Nasdaq. This number expands to approximately 7,000 when OTC traded micro-cap public companies are included. This means investors are looking at potentially thousands of investment ideas across themes and sectors.
EAGER WELCOME: Investment banking teams are back to work, and hungry for opportunity. Many of the more established names are based in greater New York, but dozens of smaller niche asset management firms are based in Denver, Seattle, Austin, Boston and beyond. That’s why small and micro-cap portfolio managers, analysts, and investors outside of the big cities are eager to meet management in person to hear about new opportunities. However, don’t take it personally if they don’t make an investment due to position size limitations, liquidity restrictions, overall capacity constraints, or quality standards.
CULTURAL LANDSCAPE: As employees return to the office, collaborative corporate cultures will make Tuesday-Wednesday and Thursday mandatory office days. Investors value eye contact and a handshake so pick a day mid-week to introduce yourself. To maximize everyone’s time, embrace the reality of a hybrid roadshow where you can meet with some investors in-person and others, virtually. While there really is no substitute for face-to-face meetings, Zoom’s many advantages remain indispensable to business life.
PRO TIPS: Concentrate zoom meetings on one day from a central location (i.e., a conference room, office or hotel) and schedule in-person meetings for the afternoon or the second day. This allows you to meet a larger number of investors in a short amount of time. Plus, if the initial feedback is positive, you could personally extend an invitation to visit you in person as investors are itching to travel again and perform in-person due diligence.
PREP RIGHT: Your IR team will educate new investors on sector dynamics and company fundamentals, hooking them in with a comprehensive overview of the investment opportunity and what return may lay ahead. This goes well beyond simply forwarding the investor deck ahead of the meeting. Investors want to learn everything they can about management including an identifiable moat as well as sizing up all the likely threats to the business. Essentially, they are trying to determine whether the company can prosper over time. In turn, IR will prep management about the investor and areas they are likely to focus on.
END GAME: Gather your notes on themes and questions raised. If follow up is promised, be sure to do so in a timely manner. And don’t forget to send a thank you note to everyone involved in a meeting, including assistants. Use the feedback to mobilize key messages in your presentation. Presentations are always a continuous work in progress, and need ongoing refinement.
There are numerous benefits to non-deal roadshows. Above all, it’s a great way to keep investors informed and engaged about your company story, recent milestones, financial results and future short-term outlook. If you need help planning and executing a roadshow or getting your presentation and delivery ready for the tour, please let us know. At Harbor Access, we have introduced hundreds of clients to investors. In particular, we specialize in running roadshows for international issuers seeking access to the U.S. capital markets. For more information, contact us.
