Here are Five Strategies for Small Cap Firms to Attract Large Investors

Here are Five Strategies for Small Cap Firms to Attract Large Investors

If you work for a publicly traded company, you and your investor relations director can take immediate action to significantly increase your company's visibility and attractiveness to investors, thereby increasing the value of your shares and the enthusiasm of your shareholders. These are tried and true methods for attracting and keeping a growing base of dedicated investors. Take advantage of what you can learn by reading them.

Anticipate Investor Needs by Informing them Accurately and Promptly

To what extent do most investors rely on fundamental analysis to determine if a stock is worthwhile? They don't... it informs them. They can know this by looking at its trade volume, price history, etc. It also has a handy "View Latest Headlines" button that takes people straight to the most recent news stories.

In fact, do it right now. Examine the latest five news releases as if you were a typical investor doing research and deciding on a trade online (where most investors do their homework). What you've seen leads you to believe that your company's stock is a buy, but is that really the case? 

If the building has been newly painted, that's fantastic! Embarrass your coworkers with the news at the next company celebration. In contrast, it's worth spending a few hundred dollars on a news release if your firm has recently struck a worldwide distribution contract worth several million dollars. Split up that massive PR into three or four manageable chunks. Due to the Shotgun Effect, it is more important to have a large amount of good news than to have a small number of stories of very high quality. Instead, the opposite is true: make as few announcements as possible when the news is not especially favorable or is routine administrative business.

The firm's website should also be kept up-to-date. Make sure your business website reflects all the latest press releases and is updated at least quarterly. Nobody is doing their weight if quarterly growth and improvement aren't satisfactory. (Try reaching out to the folks at www.EvergreenMarketingInc.com for assistance with your website's investor relations (IR) section or shareholder awareness programs.

Satisfied Investors' Silence May be Deafening

The best form of advertising is word of mouth. If you have the opportunity to speak with any of your shareholders, ask them how they first heard about your company. The answer will likely be "from a fellow investor." There are people out there right now who know enough about your company to recommend it to everyone they know... or not. They are called shareholders.

You should keep in mind that the shareholders of your publicly traded company are the not-so-silent majority, advocating for (or against) you on the Internet at all hours and in places where you have no control.

Try calling or emailing one of your shareholders sometimes, even if it's only to say hello and thank them for their support; this will go a long way toward getting them enthused about your firm and encouraging them to tell their friends and family about it. Some shareholders treat meetings with the CEO of a firm in which they have a stake as if they were meeting with the governor. It's there, and I saw it. Moreover, I have heard rumors about it.

The Best Hunters are the Hungriest Cats

It's like asking whether a tree in the forest makes a sound if no one is there to hear it. So what! If your firm announces good news but no one is there to hear it, its shareholders will still be interested.

Nothing is more discouraging to present owners (and prospective future ones) than watching a company close the session with little or no improvement in share price or volume on a day when great news is provided. The wire services reach a worldwide audience, but you may expect your news releases to mostly be seen by your current shareholders.

As we've already shown, existing shareholders may be an invaluable resource for "hunting" out new investors. Imagine for a moment if all of your shareholders knew and accepted the fact that if there were twice as many of them, the share price might be twice as high as it is right now. Because all of your current investors will sell their shares and move on at some point in the future, it is important to keep a steady flow of new investors buying into your company.

Put Together a Plan as Suggested in

There is a rapt audience focusing on you. After being asked, "Okay, Boss, what's the plan?" you respond with a corporate strategy to boost interest from shareholders is like a road map that lays out the most direct path to success. The hardest aspect of an upcoming vacation will likely be the planning. It may take some effort to get on board with the rest of the group. That "work" begins with everyone having a clear understanding of their own roles and how best to fulfill them.

As a result, we must "Get Going!" as activity breeds productivity, and productivity attracts and retains both new and current owners. Create a schedule outlining your shareholder education efforts that spans 30 to 60 days. Every week should bring about expected changes that you can anticipate.

Starting off, don't fall into the trap of preparing to prepare. Get things rolling after you've assembled most of your core personnel and operations. Stay positive even if your first outcomes fall short of your expectations. Doing this is more like training for a marathon than a short race. Getting your business up and going for the long term may require a few baby steps at the beginning.

You Cannot Expect What You are not Willing to Inspect

Leadership is not the same as delegation. To keep up with the progress of your shareholder education and advocacy initiatives, you should check in with the people on the front lines. The success of your program will depend on their actions, both positive and negative. You will go much farther, much faster, if you manage (and check) the software and the people responsible for implementing it.

I must argue that most IR tasks are looked down upon as necessary evils. However, you need to be ready to go the additional mile if you want your stock to represent a healthy market capitalisation. Take control of the investor relations program and communicate clearly with all parties involved on behalf of the shareholders. These easy but powerful actions will have a significant influence on how present shareholders and potential investors perceive your attempts to secure their support. Assuming the mantle of leadership is simple.