Investor Relations

COMPETING FOR CAPITAL 13image long after the IPO is over. Management will be held accountable forthe objectives they will have committed. While more practical recommendationswill be provided in section 3.5.3. (chapter 3) of this book on howto provide guidance to the market, it is important that management realizeas early as possible in the IPO process that they need to be prepared to talkabout and quantify their plans for the next one, five, or ten years. They willhave to strike a fine balance between being too generic (a usual tendency)and giving long-term divisional targets (a traditional investment bank’s recommendation).Factors impacting this choice will including the company’sfinancial visibility, sector dynamics, and peer company behavior. Developing and managing the Investor Relations toolkit. Companieshave a wide range of options, depending on the key audiences, the size of thetransaction in question, and the attention they wish to attract. Selection ofappropriate tools at the outset enables companies to maintain consistency,visibility, and quality over time. Some of these tools are mandatory. Here isan overview of the most usual ones (see section 3.6 in chapter 3): Slideshows. These are chiefly used for information meetingswith the press, financial analysts, and institutional investors. A convincingpresentation will address all potential issues, including the negativeones, with the view to anticipate and optimize investors’ questions. Financial advertising in all types of media, including onlinemedia. In certain countries, this is specially geared to attracting retailinvestors and can be the subject of proper advertising campaigns formajor transactions, such as privatizations. Press releases. Every major event during the entire IPO processwill be the subject of a dedicated press release: launch, terms andconditions, structure of the offering, filing with and clearance by themarket authorities, results, and so on. Press kits. These are designed for journalists. In additionto the above mentioned materials, the press kit should at least includebiographies and photos of company management, a reproduction of thecompany’s logo in a digital format and, where appropriate, videos thatexplain more about the company’s history and business. The corporate Web site, with a section specially devoted to InvestorRelations. This primary communications tool is just as important as theothers and should be designed as early as possible before, and not after,the IPO. You should bear in mind that the Investor Relations section can besubject to specific regulatory requirements. Make sure yours do comply. Organizing roadshows with potential investors and managingevent logistics. The schedule, which is often intensive and can involveinternational travel, should be planned in close cooperation with the investmentbanks who are going to arrange the meetings with their institutionalclients. One or several teams representing the company will be sent to meet