The one big lesson we’ve learned? When you prepare an IPO presentation you cannot put too much effort into polishing both what you say and how you say it.
After all, when investors judge the future of your business, they rely to a large extent on your IPO presentation – or what others say about your IPO presentation.
Looking across the dozens of deals we have supported, we’ve identified six important themes:
It is tough. During the IPO process you have advisors. Lots of them. And they are all giving you advice. But the advice is not always consistent. How do you keep your cool and stick to what you really stand for?
A few years ago we got a call from one of the big banks. The IPO they were working on – a large price-comparison site – was in trouble. Management had just pitched to the bank’s sales team and they were terrible, two days before the IPO roadshow.
The next morning we started work with the CEO and CFO. It was immediately evident that management were trying to tell their story via the bank’s IPO presentation pitch deck. While the pitch deck was good and comprehensive, it was not much use to the CEO when he was trying to tell an exciting story. So, we worked with the CEO and CFO and helped them re-think how they ran their investor meetings. Their story became more personal, more credible and more powerful. It reinforced the messages in the pitch book – but without following it slavishly. A few weeks later, the IPO was a success – the largest IPO after Google. This was a great example of helping management speak with real credibility.
Every business is complex. And the closer you are to the business, the more complex it looks. But for investors, if your story is difficult to understand, it is less attractive.
A few years ago we were supporting a Swedish tech business with their IPO. They had an amazing business, but it was highly technical. And the bank’s “Eight reasons to invest in this business” did not help. So we helped management describe their technology in terms of the benefits it brought to their customers. By developing a problem-solution approach in the presentation it was easier for investors to understand the market and the value the company delivered. After that it was simple for investors to grasp the real value of that business.
Every investor will have concerns. Both buy-side and sell-side analysts will have concerns. If they don’t, they are not doing their job. So you need to address those concerns, ideally by getting on the front foot.
The recent failed WeWork IPO is a good example of how not to reassure investors. When we work with firms we examine in detail what might worry investors and then incorporate these issues into the equity story. You will sound much more credible if you acknowledge the risks up front and explain what you are doing to address them.
Equity investors buy into the future, not the past. But it’s hard – the future is opaque and you are limited in what you can say. Your past successes will reassure investors. But the most important part of your job is to convince investors that that you know where you are going and that you can maintain that success.
A few years ago we helped a big cinema chain float. The CEO was very impressive, but the way he told his story during the IPO presentation was all about how they had got to where they were. We helped him transform his story and add in a clear description of the future and why his company was best positioned to capture even more value in this business.
Many investors may not meet anyone beyond the senior team during the float. While these individuals may be impressive, one of the key skills of a great CEO is to demonstrate they have a great team behind them. There are many ways to do this and it’s a critical part of making a successful pitch.
For example, you can use stories to show the strength and depth of the team, or you can refer specifically to individuals in the team. The whole idea is to give investors the sense that there is a broad and strong team behind the company’s success.
Your IPO story needs to resonate throughout the organisation – and beyond. The story investors hear must tie in with what staff hear, what customers hear and what they read in the press. We help management achieve this with coaching on media interviews and public speaking as well as investor meeting coaching. In the end, these different strands must all tie together so that investors, staff and customers hear a clear, consistent and convincing story. In this way, you build confidence with investors, analysts and the markets.
To discuss how we can support you with your IPO or major transaction, call us today. We are always happy to share ideas and discuss ways to make sure your IPO presentations and investor meetings are even more successful.
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