Many aspects of the business world have been affected by the COVID-19 pandemic, and plans for investor interactions in 2020 is no exception. Planning for scheduled investor interactions, such as non-deal roadshows, generally takes place well in advance. This gives you time to reserve windows for travel during times when there are no quiet period restrictions that might limit discussions or events that might occupy a large portion of the investment community’s attention (investment bank conferences, industry events, etc.). Given the current scheduling challenges, we expect most companies to simply change these meetings to phone calls, but, before your company makes a decision, consider an alternative option in this new business landscape.
Old vs. New Ways of Meeting
Beginning in March, essentially all investment bank conferences and industry events scheduled in the near future were either canceled outright, postponed, or moved to a virtual setting to abide by federal and local mandates and company policies. Unfortunately, this takes in-person meetings out of the picture, at least for the foreseeable future, which means management teams and the investors lose out on valuable time to build relationships. In-person meetings have been for many years and will likely remain the preferred meeting type for many reasons, including the nature of the meeting and the opportunity to build a rapport. This is especially true when meeting with an investor who is looking to make an initial investment and has not yet met the management team in person. Luckily, video communication platforms offer creative ways to mitigate this issue.
COVID-19 and the travel restrictions that came with it have undoubtedly sped up the adoption curve for video communication platforms. With in-person meetings out of the picture, the question remains: should companies schedule phone calls in place of in-person meetings or should they join the trend of hosting investor meetings on WebEx, Zoom, Microsoft Teams, etc.?
A New Option in a New Environment
Video calls combine the face-to-face interaction of in-person meetings with the flexibility of a phone call. Both of these things have become increasingly imperative as investors navigate a highly volatile stock market and fluid economic outlook and essentially all employees are required to work from home.
Before COVID-19, it was standard practice to limit non-deal roadshows to one city per day or possibly two depending on the proximity, but video calls negate that limitation. Instead of being constrained to a select group of investors based on your location, you now have the liberty to expand your outreach. This allows for a much more targeted approach and increases the convenience of meetings with funds located outside of an investor “hotspot,” where dedicating a day of travel would have previously been difficult to justify. Similarly, without the requirement of travel, it now becomes very realistic to include a physician, KOL, or a member of senior management on the video call. Such attendees can add much needed clarity, and they most likely would have been unable to attend an in-person meeting due to the logistics and scheduling required for a full day of travel and meetings.
Lastly, reviewing a deck during an investor meeting is much more convenient on a video call, due to the ability to share your screen with the rest of the group.
Go Virtual or Wait for Clarity?
Given the widespread guidance suspensions and the fluidity of COVID-19 developments, it is fair to consider postponing the majority of your investor interactions until you have more clarity surrounding your business and market outlook. However, it is important to remain opportunistic now that there is no burden of dedicating an entire day to back-to-back meetings and red eye flights. In the vast majority of cases, business fundamentals remain intact for the long term, so despite an unclear outlook for the remainder of 2020, it is still worthwhile to share your story with new investors. With the first quarter 2020 earnings season underway, it is a great time to revisit your meeting history and peer ownership to determine ideal target funds for the remainder of your 2020 investor interactions.
Keep in mind that the vast majority of investors are likely in the same position as you— working from home—so take advantage of the flexible schedules and the unique opportunities presented during this unprecedented time.
If you need a partner in your investor outreach or investor targeting, contact our team today.
Hunter Cabi, Analyst