Every investor’s decision-making process is unique. However, understanding their primary concerns and anticipating common questions can help you better align your message with what the investor needs to hear in order to come to an investment decision.
There are six questions in particular that investors will ask about you and your market opportunity before making an investment decision. Use the checklist below to prepare your answers to these common investor questions prior to your next meeting.
Reaching the right investors is crucial to expanding your shareholder base and raising your corporate profile. By developing an effective investor-targeting strategy, you can hone in on the institutional investors who are more likely to commit to companies like yours.
Finding those investors begins with a focused and thoughtful approach. Here are a few steps to help you identify a strong circle of promising, high-priority investor targets.
You have successfully completed your public offering, laid out a solid investor relations strategy, and successfully managed through your first year as a public company. As you enter your second year and once again map out your investor relations and communication strategy, it is important to make sure that plan evolves with you.
While many of the same components of the strategy should remain – a comprehensive buy-side targeting approach, conference and NDRS plans, etc. – there are a number of changes that you must begin to implement to ensure the strategy adapts to your company’s current circumstances.
Whether it’s your first J.P. Morgan Healthcare Conference or your 36th, if you are involved in the healthcare sector in any way, you know J.P. Morgan is the super bowl of healthcare conferences and for four days, it becomes the epicenter of healthcare. The attendance is staggering with approximately 20,000 healthcare professionals ranging from institutional investors, private equity and venture capital investors, bankers, analysts, and company executives all gathering to see the next new thing in healthcare. It is the place to be for healthcare executives to start the year.
In the 30-40 minutes that a typical investor meeting lasts, you need to accomplish several critically important goals. You must:
• Provide your audience with the investment merits of your company
• Answer their questions
• Inspire them to do more research into your market opportunity
If you fail to achieve these objectives, if the investor leaves the meeting without sufficient information and inspiration, then you’ve effectively wasted everyone’s time, including your own.
Some people are a little surprised to hear that a decent percentage of our clients at Westwicke are private, venture-backed healthcare companies. “Why,” they ask, “do private companies need investor relations?”
Having spent the majority of my professional career on the buy side at one of the first U.S.-based healthcare crossover firms, I typically respond by saying: “I often wonder why it takes private companies so long before they do reach out to the buy side!”
One of the more common things we hear from current and prospective clients is their desire to get more coverage from the sell side. This is particularly the case when the company is smaller in size, is a “restart,” or is an international company looking to list on one of the U.S. stock exchanges. Here are a few things to consider as you look to expand your sell-side coverage.
So you thought you were on the fast track to go public. You selected underwriters, increased investor outreach, prepared the organization, and probably attended a few conferences. But suddenly the markets turned, volatility came back, and the IPO window closed!
This is exactly the scenario that many companies have been facing this year. The NASDAQ Index is down 1.6% and the NASDAQ Biotechnology Index is down 20.8% year to date — not exactly ideal conditions to take your company public. However, sentiment has been improving recently, and the Volatility Index is at lower levels. The IPO window may indeed reopen soon, and if your goal is to go public when it does, we encourage you to use this time proactively.
Over the last five years the healthcare market has performed well, and we’ve seen a large number of IPOs. Recently, however, times have been a little tougher and many of these newly minted IPOs are beginning to experience what life as a public company is like in a more volatile market environment.
In times like these it is more important than ever to keep your head down, run your business, hit your targets, and deliver on the promises you have made to your investors. All of this should be complemented with a comprehensive investor relations strategy that enables you to understand how to take full advantage of the resources you have at your disposal now that you are a public company. One such resource is the sell-side analyst.
Nobody likes being the bearer of bad news. I remember as a kid breaking a basement window playing hockey and “forgetting” to tell my parents what happened.
Well, after a few feet of new snow, a lot of which accumulated in our basement, my secret was out. I remember my parents being furious, not so much for the broken glass itself, but more because I didn’t take responsibility for what happened. They made me feel terrible by saying what I didn’t tell them violates a trust that is difficult to earn back.