Investor Relations for Small Cap Companies is a stupid term because “Investor Relations” doesn’t really capture the work involved in completing a comprehensive package that will help a Company relate to public investors.
What is involved in SUCCESSFUL Small Cap Investor Relations?
• Branding – First the Company needs to identify its niche, its reason to exist. Why is this important? Because Small Companies need to find investors that are choosing from thousands of places to invest their money.
• Communications – The IR team together with the CEO needs to develop a set of tools that communicate this “brand” to the market. These tools include the website and investor materials – but also much more – like a video
• Strategy – Once the investor materials are ready for prime time a comprehensive plan should be planned and implemented. Good IR programs are multi dimensional – too often a CEO thinks he/she is doing a good job by putting out press releases. The problem with press releases is that they only reach the investors that already know about your company. Other methods need to be implemented to cast a wider net. Video, social media, conferences, road-shows.
• Marketing the Stock – CEOs and IR professionals need to embrace that they should be marketing their stock as well as managing their company. Financial performance is only part of the solution. Identifying and closing on new investors regularly will make sure that the stock trades well while the Company is in “building” mode to create the results.
“Investor Relations” as a term just doesn’t work for micro cap companies – Investor Relations should be an integral part of the business strategy, because they are the ones talking to the “owners” of the Company. They should be consulted on every aspect of operations and strategy, so that the performance of the Company matches what investors will respond to.
Please email me with suggestions for a better term for this crucial role. firstname.lastname@example.org