As a part of preparing for an IPO, you will have developed the investor messaging, business, and financial model and completion of the business section of your S-1.

You will now need to create an IPO deck for your Roadshow, which will need to be reviewed by your lawyers, the underwriter, and their counsel.

The IPO Roadshow Deck

The guidelines for the deck include a maximum twenty-minute pitch, which includes telling a compelling story about how your company, product, or service line came about, your team, and your value proposition. In addition, you will need to present your business model and how it will benefit from the IPO, show a pathway for investor return on investment, and include the following.

The basic rule of thumb for effective slide presentation goes like this: Less is more. So use fewer, more impactful words.

You’ll want to consider other things when preparing your presentation, such as:

• Bigger is better. Minimum 18 font, 24 or larger preferred.
• Be visual. Use graphics to convey key data and/or concepts
• Go pro. Professional “polishing” is highly recommended

Introduce your management team, what role each member plays and how they will contribute to the execution and growth of the company. Then, do dry runs with your team and the bankers to drill down on the nuances of the wording, the key messages, the timing, the effectiveness of examples, and the order of topics.

Rehearse, get to the point, know your numbers, convey confidence, and then rehearse again.

The Roadshow is a time-sensitive window before the IPO, where many discussions will occur with the SEC, the Exchange, and your bankers on various topics. During this time-sensitive window, the SEC will be reviewing your filing and provide comments and questions regarding your disclosures, your business, the risk factors, and for complete disclosure of material information.

Simultaneously, the Exchange will review your application, provide comments, and ask questions regarding your application and meeting the quantitative and qualitative listing requirements. You will continue to work closely with your advisors during this time to help sort out the proper response in order to satisfy the SEC examiners.

The responses by the SEC examiners are critical to managing your timeline to IPO. The content you give to the SEC will be reviewed closely by third parties and live forever in the document you file publicly and ongoingly every quarter with the SEC.

Testing The Waters

Testing the Waters (TTW) in the IPO process allows companies to gauge how successful investors receive their prospective IPO before committing to further time, expense, and scrutiny of a public offering of securities. This is especially true for an initial public offering by a company that is not already subject to public company reporting requirements.

The TTW of the capital markets allows for greater transparency and communication between the company and the investors before the full-blown IPO process and enables companies to adjust their strategy for the IPO. In addition, it allows investors to assess whether they want to invest.

TTW periods are designed to help inform a management team and the underwriters about whether they should endeavor to raise capital from the public equity market before going through the actual process of going public.

The TTW roadshow allows management to meet with select investors to see how the opportunity is received and for underwriters to gain an indication of interest.

This process is valuable for management to see how investors react to you presenting and describing the business. In addition, you can gauge how the audience received the story.

This allows prospective investors to gain a significantly better understanding of the business and to refine your message after every presentation.

On The Road

The primary reason for the IPO Roadshow is to allow companies to generate enough interest from investors to raise the capital necessary to go from a private firm to a public one. In addition, it enables listing companies to understand their standing in the market.

If done successfully, IPO Roadshows can create an oversupply of capital to help drive a company’s long-term success and accelerate its growth.

Scheduling and planning the Roadshow has changed since the pandemic and is primarily done virtually. However, depending on logistics and transportation, traveling for the Roadshow is an option.

Based on experience, seven to ten days is adequate time to generate interest for orders to sell your issuance. However, if you are traveling to major financial centers in the U.S., you may consider extending this time frame.

Your job is to tell your story better and convey confidence; it is your stock to sell. While

it is not necessary to travel to meet investors; the Roadshow is an opportunity to meet your future major shareholders face-to-face and to make personal introductions.

Choose investors you can build a strong relationship with over time since, after the IPO, you will need to work hard to develop and grow relationships with your key IPO investors and new ones.

Be aware of the types of investors you are meeting with and do your research before the Roadshow. The pace is breakneck, and your bankers will cater to their best customers: hedge funds and short-sellers.

The micro and small cap system is rigged to a certain degree, and your bankers will want to make sure their best clients get an allocation. So make sure you get to designate the significant allocations to the investors you wish to and, whenever possible, avoid the folks you don’t want.

Managing The Calendar

While management is out Testing the Waters, the finance and legal teams are busy updating the registration, addressing regulatory comments, clarifying statements, and providing further commentary in response to the SEC’s and the Exchange’s requests.

The next milestone is to file your S-1 per your planned IPO date and fine-tune the calendar of events. After that, the company must make its first public filing with the SEC at least 15 days before it commences roadshows to market the offering.

The purpose of this 15-day “cooling off” period is to let the market absorb the information regarding the issuer and contemplated securities offering that has been under confidential review.

You will also be coordinating activities regularly with your chosen Exchange. One of the tasks here will be to schedule your IPO’s pricing and trading day.

You will also want to get on the Exchange’s schedule to ring the opening bell. Timing is everything, so close contact and continued relationship-building with the Exchange will help set this up.

IPO day is one of the most exciting events for an entrepreneur and also one of the biggest lead generation days you will ever have. Marketing this takes time and resources to plan and create visibility. Hence, you develop a plan and a timeline to take full advantage of the publicity it generates.

Featured Photo By katjen on Shutterstock

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