‘Raising money from savvy, scrutinizing investors requires that you produce a road show which includes a great story, engaging storytellers, and plenty of practice. It may sound simple, but it’s anything but easy.’ – Harvard Business Review (HBR)
Launching an IPO is a critical event for a company. It marks a high point and can lead to even greater success, but there is only one chance to get it right.
IPO road shows are brutal: you’ll have two, three, maybe even four weeks of six to seven meetings a day, going over the same stuff again and again and being bombarded with questions. All while you try to keep on top of your day job, which is pretty demanding to start with.
All of that is bad enough – but it’s a lot worse if you’re not prepared. IPO presentations merit serious attention, work and preparation.
First comes acceptance
One of the biggest pitfalls when it comes to IPO presentations is that management simply isn’t used to talking to investors.
A CEO might be great at running their company, a CFO might be a fountain of financial knowledge and the product manager may know every minutiae of their domain – but all of that is expertise.
Presenting successfully to investors isn’t about expertise – it’s a skill of its own.
There is a world of difference between knowing your business inside out and being able to phrase and structure an argument about it.
It’s a skill to be able to talk about your business and your expertise in a way that resonates with, and positively influences, the highly sophisticated set of ears belonging to your potential investors.
And it’s a skill everyone has to learn. Accepting help is the first step towards a successful IPO presentation.
Acknowledge there actually is an ‘I’ in team
There’s no doubt you need to build a strong team for your IPO road show. And that team will be made up of several highly powerful, capable individuals; this, however, can lead to some potential sensitivities.
We’ve already accepted that management needs help. It’s not a huge leap to also accept that the product manager doesn’t handle pressure well; or the CFO, who’s great with detail, doesn’t engage a room very well; or, indeed, that the CEO has a few polarising idiosyncrasies that aren’t well-suited to public speaking.
There’s always something when it comes to IPO presentations. So while it’s important you all gather in the same room and run through full rehearsals together, pin-pointing who takes the lead and who adds credibility, each individual also needs to work one-on-one with someone, identifying their individual weaknesses and polishing their presentation skills.
Know your story
‘Before you fire up Keynote or PowerPoint to design any slides, it’s important to know the main elements you could include in your story,’ says Mikael Cho, founder and CEO of Crew.
Any audience – investor or otherwise – will only retain and act upon two or three messages, maximum. There might be a million and one great things to say about your business but you need to find the big themes that are going to have the biggest impact. As the HBR says,
‘Craft a compelling story — one that is interesting and entertaining — and then deliver it with passion and delight to get the audience excited about the investment opportunity.’
You then need to get everyone singing from the same hymn sheet. The key messages have to be consistent in every presentation, from every person and in every answer to every question. You have to know them inside out and, as the HBR goes on to advise,
‘Be prepared to present your material in a variety of formats — five, 15, or 30 minutes with or without a deck. You should be able to improvise and hone in on your audience’s questions and goals regardless of how much time you’re given.’
Prepare for every question
Be as prepared for the Q&A portion of the meeting as you are for the presentation. You certainly don’t want people surprised by each other’s answers.
- Everyone has their own area of expertise. Don’t tread on a colleague’s toes and don’t footnote someone else’s answer with a ‘can I just add…’. As Stengel advises, agree beforehand on who will cover which topics and who is responsible for answering what types of questions.
- You have to know everything inside out. Everyone needs to know the answers to everyone else’s questions for when someone has to miss a meeting.
- Know when to stop with an answer. Investors like information, but most of them aren’t fans of death by detail.
- Be flexible. You’ll be talking to strategic buyers who want the high-level business cases and financial buyers who want metrics and financial indicators. And sometimes you’ll be talking to both, so be prepared to flex the conversation.
- Avoid ego. Sometimes a question can feel like a criticism, but it’s an investor’s job to push back – they’re putting other people’s capital at risk. Don’t try to ‘win’ or give the ‘right’ answer. Focus on building trust instead: acknowledge the validity of the question and try to solve the issue.
Rehearse, rehearse, rehearse
Finally, you have to put the time in when preparing for IPO presentations. Any job where the execution really matters – surgery, the military, piloting aircraft – professionals practice.
An IPO presentation might not be life and death, but it is a one-time deal. Just like on the operating table, you don’t get a do-over. So make sure you know what you’re doing before you walk into theatre.