Make a Statement: Take Investor Relations Seriously

Posted by on October 31st, 2011

In a recent Inside Investor Relations article on “How to pick an IR agency for the IPO,” I discussed some of the challenges that newly public companies face. Companies understand that they need investor relations help prior to going public, but there is an interesting trend for companies to seek IR help further and further in advance.

Forming a relationship with a communications agency early on helps streamline the listing process. This relationship also demonstrates that you, the CEO or CFO, are willing to devote your time to communicating with investors. This makes a strong statement to analysts and future shareholders that you plan to take investor relations seriously.

I have been helping micro-cap, small-cap and mid-cap companies with the IPO process for 15 years. During that time, I have seen five factors that are critical to picking an IR agency for the IPO.

1. Choose an IR agency that has worked with companies through the IPO process.
2. Make sure the IR agency has relationships with all necessary vendors – this ensures that you are ready to respond immediately as a publicly traded company.
3. Ask the IR agency for samples of earnings press releases and conference call scripts created for other recent IPOs.
4. Find out if the IR agency has a formal process for working with companies about to go public – a timeline working backwards from the day of pricing is a must.
5. Select an IR agency that knows how to work with the financial print and broadcast media.

Remember that you are making the choice to take investor relations seriously, so choose an IR agency that you would be willing to build a long term relationship with.