Potential Investors Stuck on 4th & Goal? 5 Ways to get them into the Endzone

Written By Liz Klinke, Director & George Tripkos, Consultant

September 14, 2021

If your management team has met with a potential investor several times, and has come up short of scoring, you can start to feel a little bit like the 2017 Cleveland Browns. And you’re not alone. According to recently updated 13F data, many management teams met with investors multiple times in the latest period, but the investors failed to take action and buy in.

The good news is, game-changing plays are always possible. We’ve built a game plan with some of the best tips and strategies for reaching investors who are holding back, so you can get them off the sidelines and into your stock.

  1. Update Your Scouting Report
    • In many ways, a perception study is to investing what a scouting report is to football. It provides the details you need to know who is a good fit for your stock, and where you might need to do a little messaging work to make a better connection and ultimately put some points on the scoreboard.
    • When perception work is done well, it can give you a deeper understanding into what matters most to your investor pool and what they want to hear from you. You may think you know how investors view your story, but having a third-party gauge investor sentiment often uncovers critical gaps in IR messaging, such as specific areas your investors want addressed in more detail before they buy in.
    • Start by coming up with a solid list of questions you want answered, and then be sure to specifically ask investors what they want to know more about and if there is anything specific that is holding them back from becoming shareholders. Even with a small sample size, you can get some great feedback when you ask the right questions.
  2. Give Yourself the Home-Field Advantage
    • A lot of companies are playing on the road when it comes to investor targeting. They wait to be invited to roadshows and conferences and then meet with whomever happens to be in attendance.
    • Change the dynamic by hosting a company-sponsored NDR where you control the invite list. Not every conference or investor is the best fit. But when you hold the tickets, you can be sure to put yourself in front of pre-qualified investors who are already interested in your story and thus more likely to convert.  
  3. Build a Better Playbook
    • Sometimes the issue isn’t the type of investor with whom you’re engaging, but rather what you are putting in front of them for consumption. If your current IR materials are not facilitating an investment decision, then it’s time to reevaluate the content, especially if it’s been a while since it has been updated. Even if you use the latest metrics in your materials, the messaging should be reviewed and adjusted from time to time as well. What was important to your investors last year might not be as important today.
    • It’s also imperative to carefully consider your audience when preparing IR materials. The amount of detail and complexity in your materials can and should differ, for example, from a panel of sell-side analysts to a roster of trade group conference attendees. Make sure the materials are easy to understand in any context, even if you’re not there to explain. Think about it like this: if for any reason you can’t speak at an event, what would you want your audience to take away from your slide deck? Do your materials clearly send that intended message?
  4. Plan a Powerful “Press Conference”
    • Drawing attention to your story and using facetime with potential investors to clearly share your strategy and path to success is key to motivating investor action.  As a representative of your company, you are a coach to a variety of stakeholder groups. They’re all looking at you to lay out the game plan. But to believe in your vision, stakeholders need to understand it first. And this starts with a clear investment thesis that explains, in detail, why someone should invest in you.
    • For example, it’s not enough to say, “Invest in our company because we have a unique growth opportunity and an 11% revenue CAGR since 2017.” You’ll gain a lot more yards with something like this:
      • “Using our patented software, we are on the forefront of electric grid technology. An investment with our Company is an investment in the electrification of North America, projected to be a $XX TAM by 2030.”
      • Any time you are preparing remarks for an engagement with investors, once you’re sure your value proposition is clear, take the time to consider what investors will ask. And more importantly, what they won’t. What other questions might they have? It’s imperative that your messaging addresses all potential concerns whenever you have the opportunity to be face to face with your investors.
  5. Be Willing to Call an Audible and Change the Play As Needed
    • Like any good game plan, a good IR program is flexible. IR messaging and strategy need to adapt as the investing landscape evolves. The growing importance of ESG provides a great example. According to a recent report from FactSet, in 2019, there were 1,871 mentions of ESG data, ratings, and scores in the media all year. In 2020, that number nearly quadrupled to 7,860. And in 2021, it skyrocketed again with 11,628 mentions by mid-August.
    • Clearly, ESG matters to investors now more than ever and has made its way into investment selection and screening processes. Incorporating your company’s ESG data, initiatives, and goals into your IR messaging and strategy could be the change you need to make in order to score more investor buy in.

Always respect the game clock. Remember that management’s and investors’ time is precious. Maximize the value of each investor engagement by taking the steps you can to ensure your message is on point and addresses the specific needs of investors. Doing so can help increase conversion rates, bring new investors off the sidelines, and turn them into the long-term shareholders your business wants. Contact us if you are looking to clarify your message or need help finding the mix of investors.

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