The Power of Saying "Sorry, I don't know"

It’s impossible to anticipate all the questions that may be asked during an investor presentation, nondeal roadshow or on an earnings call despite your best efforts at preparation and due diligence. When investors ask about specific lines on the balance sheet and you can’t make a direct and factual response, it’s absolutely ok to say “Sorry, I don’t know”. Sometimes the question may be speculative, such as commenting on geopolitical risks in other countries. At other times, it may be related to positive or negative news articles, chatter on LinkedIn or comments posted on Twitter by a disgruntled investor that you or your team may have missed. Refuse to speculate. Respond honestly and always answer factually. 

Management often does more harm than good by winging an off the cuff answer. Instead, of scratching your head, and improvising—be open and transparent with investors. Either ask for clarification or, simply say, you “don’t know and will find out”. Sometimes a question might be too vague. Do not reply with what you think was intended and what you believe they will want to hear (this is not the place for a marketing pitch) rather, keep to specifics around the business and financial results. Asking for specifics starts by thanking them, stating the importance of the question and saying you will get an answer and follow-up.

The goal of Q&As is to build authentic relationships with investors. Avoid the potential pitfalls of improvising and use these moments to your advantage. Investors want to talk to management, not sit through a PowerPoint presentation. They’re much more interested in an informal free-range discussion where they can get the information, they need to make a decision. These moments are a great way to build a solid foundation for a strong personal relationship.

So, next time you’re stumped by an investor’s question, be honest and follow-up in a timely manner. Being disciplined around your follow up is critical to building better rapport with the investment community. This is the part that most management teams forget to do as they are regularly busy. Follow-up also helps develop an ongoing dialogue. In fact, investors are often surprised when you do follow up since so few CEOs actually remember to do so. Be the one who makes their day. Chances are, you’ll raise brand awareness and positively impact perception, and—in doing so, your status as an issuer.