Investor Relations

COMPETING FOR CAPITAL 19will benefit from implementing minimum corporate governance standardsand financial communications procedures. Most of them were describedearlier in section 1.2 and correspond to phase 1 of Investor Relations inan IPO.If they opt for private equity financing, formal board presentation will bea condition to obtain equity. You will have to know how topresent your business and financial track record so far;articulate your growth strategy and the business model that goeswith it;justify your need for capital with realistic result and achievementobjectives.You can learn from Investor Relations specialists and from best-practiceorientedpublicly traded companies, by studying the form and content oftheir financial communications and corporate governance principles.Furthermore, it is very likely that the CEO will have his or her visionand targets aggressively challenged by potential investors. Adequate trainingand rehearsing will be a prerequisite.Once the funds have been awarded, the composition of the board of directorsis, in most cases, going to incorporate representatives of the privateequity firms that have contributed to the equity-raising process. They willbe hardly different from other institutional investors in their informationrequests and expectations. For instance, this is going to entailkeeping them informed of industry and companies issues, in realtime;scheduling meetings at regular intervals.This process may seem tedious at first, but it has many advantages forprivate companies, the foremost among which aregetting used to high standards of communications;becoming familiar with valuation mechanisms;understanding how to build an efficient board of directors.In other words, the sooner you get organized and ready for this very specificcommunications exercise, the better.