A company going public is nothing new, but we are here to help you stay in the know. Going public enables a company to gather increased capital and accelerate growth. An IPO (Initial Public Offering) is when a company goes from private to public, gathering investors and growing capital. Plenty goes into making this transition happen, most notably, the IPO roadshow.
Before we go deeper into an IPO Roadshow, let’s gather more details on an IPO.
What is an IPO?
Simply put, and to reiterate the above, an IPO is a common practice where a company goes from being private to public. It is the steps of having a stock launch in which investors can hopefully purchase shares of a company to acquire a return on their investment. Typically, when a company IPOs, one or more investment banks back it to arrange a listing on selected stock exchanges. The process can be lengthy and requires IPO roadshows to gather adequate attention from the public and potential investors.
What is an IPO Roadshow?
An IPO roadshow is about executives pitching sales presentations to potential investors across various locations and industries. Historically, you’d hit the road and get to network your offerings. As I’m sure you can imagine, there are several standard practices that are essential to make for a successful IPO Roadshow, but first, it is critical to know the types of IPO roadshows to better determine the route you would like to take.
Different types of IPO Roadshows
IPO roadshows have seen a significant shift since the digital age, a change that has now been accelerated due to Covid. Gone are the days of in-office PowerPoint presentations only.
In the past, IPO roadshows were often in-person, where a representative from the company would travel from city to city with their pitches. Nowadays, digital IPO roadshows are on the rise, with easy access to the internet, smartphones, and conferencing tools like Zoom, Google Meets, and Teams. These advanced tools have enabled prospective listing companies to perform digital IPO roadshows as they would in-person ones.
The ability to share visual aids while presenting, the accessibility of passing on recordings of a live pitch to potential investors, and/or even using chat options to facilitate Q/A discussions during a live remote presentation have all been developed All these things have made roadshows incredibly convenient and more approachable. If planned well, digital IPO roadshows can be as impactful or even more impactful as in-person roadshows.
Its obvious expectations are changing, and the industry standards are adjusting based on current circumstances and the environment of technology. This is a special note that companies must stay ahead of the trend and be prepared for in-person roadshows and roadshows in video form.
Benefits of Digital Roadshows – IPO Roadshow Video
- Appeal To Your Target Audience – With video, you have the opportunity to tailor your video content to a diverse array of investor prospects.
- Consistent Messaging – There will be no doubt about your content. Every pitch will be the same because the video content remains the same. This offers a straightforward, concise, and consistent approach to delivering your company message.
- Captivating Storytelling – Data shows viewers retain 95% of a message when they watch it in a video compared to 10% when reading it in text. Don’t you want your story to be remembered and memorable? Try video.
- Compelling Data Segments – Data is something else and can sometimes cause many to lose interest. You can utilize a professional video production team that understands how to make data stand out and be compelling via motion graphics. Doesn’t that seem much more interesting than an excel spreadsheet?
- Video Is Versatile – With video, you can shorten, lengthen, have b-roll footage, share on social, via email, have animation, and add text. The list goes on for the possibilities of intrigue. I think you get the gist of video versatility.
Drawbacks of Digital Roadshows – IPO Roadshow Video
- Live Remote IPO Roadshow Pitches with video could be subjected to internet disruptions. You could lose investors’ interest due to the virtual nature of these sessions and the infamous screen fatigue some are experiencing.
- You could miss out on the engaging relationship-building aspect that an in-person IPO Roadshow could offer as you get to know prospective investor individuals.
What does an IPO roadshow include?
Despite being online or offline, there are some commonalities in how an IPO presentation should look.
Since an IPO roadshow is used to garner interest in the company amongst potential investors, it is usually divided into two parts.
Part one: The pitch includes an overview of the company and is primarily present and past-oriented. Company history, mission statement, past financial performance, the introduction of the current executives, and their reasons for wanting to go public are all presented in this section.
Part two: The pitch is future-oriented and includes financial/sales projections, growth, and the company’s IPO goals.
Importance of a Roadshow
A roadshow can provide many benefits to a prospective listing company. The intangible benefits are gaining trust and rapport with potential investors resulting in long-term company success.
Then, the tangible benefit includes raised capital due to enough interest generated while on the roadshow. Roadshows can be insightful for the listing company as well.
Responses from the roadshow can gauge how the company listing will play and deem whether it will be a failure or a success. Additionally, the reactions can also help underwriters determine their next steps. If the roadshow is successful, the underwriters may set a higher price point knowing the investors will buy in even at the raised value. If there is an interest but unwillingness to buy, the underwriter and listing companies may investigate the reasons. One of the most frequent is a lack of buying interest due to higher stock prices than investors expected.
There is no guarantee that your company may IPO because you have an IPO Roadshow. The listing company may pull out if there is no interest in the roadshow. This makes timing all the more essential. Before suggesting an IPO, factors like the economy, competition, and current financials are often considered.
Either way, a roadshow is the first indication of whether the possible success or failure of an IPO listing will result. It is the task of underwriters of listing companies to review interactions and interests carefully to determine their next course of action in their IPO undertaking.
How to conduct a roadshow with a successful checklist
1. Do the due diligence: For an IPO roadshow, the listing company needs to go through certain procedures. Before choosing to go public, you must select a reputable bank for an underwriter, understand any risks, and submit a complex set of IPO regular fillings and documentation.
2. Choosing to be online or offline: The mode of the roadshow can decide the accessibility, the kind of relationship the listing company wants to build with potential investors, and at times the success of the entire listing. Hence, it is important to choose the best model for the company.
3. Create an effective pitch: The pitch mentioned above should include past information about the listing company to build credibility. There should be a focus on current prospects and a clear illustration of the benefits investors would receive. A successful pitch/presentation can lead to a successful roadshow so take the time to jot down notes of your goals and script them out to make them more attainable. Make the time to plan and determine whether working with a video team would assist your feat, especially if you are considering a digital Roadshow or IPO Roadshow Video.
4. Conduct a retrospective after the roadshow: Analyze what worked and did not. Try to quantify the buzz created to identify what stock price to set and when to make the company public.
Lots of information to digest, right? There are many factors to align on and ponder about, but this is an exciting time.
In conclusion, IPO roadshows have many benefits. It allows companies to generate enough interest to go from a private firm to a public one and enables listing companies to understand their standing in the market. If done successfully, IPO roadshows can determine a company’s long-term success and accelerate its growth.
The IPO roadshow journey is yours to take with a team of professionals experienced in IPO performance plans. As you consider whether an in-person or digital IPO Roadshow will suffice for you, consider having video professionals beside you to help you coordinate the digital elements.
When you are ready to start your IPO roadshow video project, connect with a video production team specializing in all things video. WE LOVE VIDEO… from IPO roadshow video to video production services, motion graphics services, or event video production. We can talk about it all day long. Start your project and stay inspired to continue your company vision.