How you tell your company’s story before, during and after an IPO can have a big impact on your valuation and market success
Preparing for an IPO signs you and your company up for months of hard strategizing, messaging and decision-making to effectively tap the public markets. With the complexities of changing market dynamics, mandated disclosures and Federal securities regulations, navigating the process is a challenge. And since the 2012 JOBS Act, allowing for confidential S-1 filing, many companies simply do not bother with the hard work of building their presence in the marketplace before the registration statement is publicly filed.
That can be a big mistake. Your IPO is a once-in-a-corporate lifetime chance to position your company, not only in the minds of investors, but with your customers, prospects and other key stakeholders.
Not taking full advantage of the visibility gained during the IPO process can do a disservice to your company and your future shareholders.
Pre-IPO: putting the communications infrastructure in place
Before the IPO process even gets underway — to maximize your chances of success in the public markets — you’ll need to put in place a solid communications infrastructure that includes a detailed messaging strategy, a timeline of your news flow, a priority list of your key audiences.
Targeting the right stakeholders at the right time is vitally important, especially for companies in the life science sector. Ensuring that your customers, key opinion leaders (KOLs)/physician groups, and patient/advocacy groups understand the company story will pay dividends. Wall Street will conduct its own detailed research to find out exactly what these third parties think about your products, your company, and how they all fit into the competitive “space.” Getting your story understood and validated by KOLs and customers can have a major impact on how “the Street” eventually views and values your company.
This is also the time to review and evaluate your press release strategy. Think about and create an inventory of “news pegs” or story ideas that could go out before your “quiet period” starts immediately before your filing. You’ll need to further craft your story through your investor materials such as fact sheets, corporate presentations, management videos, websites and external Q&A documents.
You should also consider conducting an investor positioning session or perception audit to help refine your corporate story. This process can help you develop a peer group from which to benchmark or refine your company’s working investment thesis and set appropriate corporate milestones.
And you’ll want to cultivate third-party spokespeople who can speak about your company to the media, begin developing your corporate investor presentation and, importantly, train your internal corporate spokespeople. Message training is like finishing a package off with a bow. Taking your presentations to 100 percent effectiveness by message training the team will prove to be worth the investment.
The IPO Process – staying visible, keeping compliant
The communications roadmap and regular PR activities that you put into place during the pre-IPO preparatory phase will serve you well as you enter into the regulated world of communications immediately before and after “filing” your IPO.
Federal securities law limit the kind of information a company may use to offer stock in its IPO and the way they provide that information. These “quiet period” limitations can seem to conflict with the need for companies to continue business as usual. After all, companies need to engage in marketing, public relations and advertising to promote themselves, reach customers and generate sales.
But if you’ve established a “track record” of “regularly released factual business information in the ordinary course of business” during your pre-IPO phase, you can maintain communications with your clients and prospects, satisfying the “safe harbor” on communications and not be accused of “gun jumping.”
You’ll still need to closely coordinate with your securities attorney on communications immediately before or after the registration period, as it is potentially easy to run afoul of securities regulations. But with the proper preparation in the pre-IPO stages, there should be no reason for you to go silent in your communications with customers or prospects.
Post-IPO: keep the momentum moving
Once you complete your IPO and begin public trading, there’s a natural tendency to take a breath and just do the mandated minimum in terms of communications. But remember, going public probably generated the most visibility and media interest your company has ever had. Now is not the time to take your foot off the accelerator.
Your post-IPO communication strategies are crucial for managing relations with Wall Street and keeping yourself compliant with Federal regulations. As a newly public company reporting to the Securities and Exchange Commission, you’ll need to develop internal processes to execute your earnings releases and 8-K filings, your 10-Q and 10-K submissions, develop relevant “non-GAAP” financial information and script your quarterly conference calls with investors and analysts.
It’s definitely a lot of work, but to maximize the effort that you put into becoming a public company, it can’t end there. This is where the timeline and message strategy you created before you went public comes into play.
Look at the initiatives you may have put on the back burner prior to the IPO. Now may be the time – with heightened attention on your company – to put them in place. Take advantage of the contacts and relationships you’ve made with the media during the IPO process to keep them informed. And not just with disclosure communications, but with stories that show the breadth of our company. After all, your company is more than just a stock symbol and a ticker price.
Keeping your company’s communication strategy front and center throughout the three phases of the IPO process will greatly increase your visibility and ultimately help ensure that your company achieves a full and fair valuation, once it becomes public – and beyond.
Donna L. LaVoie is President and Chief Executive Officer of LaVoieHealthScience.