Non-deal roadshows (NDRs) are a critical part of a company’s investor relations program. At the bare minimum, they allow companies to be visible to investors outside of any interactions at investor conferences and during quarterly earnings calls. Beyond that however these 1:1 meetings during NDRs provide an opportunity to educate investors on the companies programs and build long-term relationships. Building long-term relationships is essential for companies, not just with their current investors, but also with prospective investors. While prospective investors are unlikely to invest in a company after a single NDR meeting, ensuring that the company is on the investor’s radar when there’s an opportunity of any potential financing is important for the long-term growth of the company.
In today’s climate of continued market volatility, while companies may question whether NDRs should be prioritized due to investors being selective about their capital deployment and companies facing higher scrutiny, it is even more critical for companies to factor NDRs into their broader IR/communications strategy. While companies often have a tendency to keep our heads down and execute during these challenging times, NDRs are more often than not a proactive form of IR communication and should be prioritized regardless of the broader market conditions.
In short, the success of an NDR will come down to preparation – not just the materials you prepare going into a NDR but the mindset you go with.
What to Bring: The Essentials
When conducting a non-deal roadshow, whether virtually over Zoom or in person, companies should focus on the following three buckets – materials, knowledge and presence.
Materials:
The investor deck for your meetings needs to be tailored for the buy-side. The term “one size fits all” doesn’t work for NDRs as you’ll likely meet investors that have different stages of relationships with the Company.
Some questions to consider as you formulate the slide deck for your meetings include:
- Is this the first meeting for the Company with this investor? Consider bringing a general corporate overview.
- Are you meeting investors immediately after a data readout or presence at a major medical meeting? Include the relevant slides and if applicable, provide copies of the poster or relevant material as supplemental information.
Ensure that your IR website is updated and remember to bring copies of relevant press releases in case specific questions arise.
- If you’re bringing copies of a poster or material presented at conference, ensure those are easily accessible online from a RegFD perspective (above all else) and that investors can access if necessary.
- If your NDR follows the issuance of a recent press release with transformative news for the Company, remember to bring extra copies of the release should questions arise.
As with preparation for any investor interaction, develop and review a Q&A focused on topics including guidance, catalysts and risk factors. This is extremely important as all management team members on the NDR need to be up to speed on relevant information that they may be asked by investors and aware of what to expect.
Knowledge:
Once the materials are covered, management should be aware of the investors they are meeting. Beyond knowing their holdings – do they hold in your company? do they hold in peers or competitors? – management should be aware of their investing style and any past meeting history (if applicable) with the fund. Going into an investor meeting with this knowledge (at a minimum) will provide the foundation on how the meeting should be conducted from the company’s perspective.
Management should also be aware of their own valuation drivers and bear cases that could lead to a decline in your valuation. Finally, if the company is publicly traded, management should be aware of the Wall Street view on the company. This includes what the sell-side analysts are saying about the Company and the competitors.
Presence:
From an investor relations perspective, the Company’s management team should be coached on how to show up at these meetings. This can be done through mock Q&A sessions with your IR team and is essential to be fully prepared for these meetings. Ultimately, these preparation sessions will allow management to focus on showing up with clarity, humility and conviction.
In addition to preparing on how to show up, the IR team should work with management on ensuring an alignment on messages, tone and flow. Messaging can be refined based on the deck that is prepared for the meetings and recent news for the Company but the tone and flow should be practiced between the expected attendees for the NDR. For example, if the CEO and CFO are attending a NDR and the CEO will be primarily answering the questions, it is important to ensure that the flow of the meeting is comfortable between the CEO and CFO and management doesn’t have two different types of tone during their meeting. Furthermore, this ensures that management is not giving inconsistent answers across meetings and risking any sort of disclosure concerns.
Ultimately, it is helpful to prepare, refine as needed and practice ahead of the NDR so that you’re not going into these meetings “cold” and more importantly, not in sync with each other.
What To Say: Messaging that Resonates
When companies have back-to-back meetings at an investor conference, the dialogue sometimes tends to be on autopilot due to the format of “speed dating” with short meetings of 25-30 minutes in duration. When having the opportunity to interact with investors during a NDR where the meetings are longer, management should go into these meetings with a clear investment thesis. At a minimum, this means being able to answer three questions – why now, why this company and why this team.
Once you have your investment thesis, the company should align their talking points with what matters most the audience that you’re meeting. Ultimately you want to make sure that the narrative around the slides are equally prepared with the materials you’re providing for the meeting and this can only be done if you take the time to develop the messaging and ensure that you’re prepared for the discussions. For example, if you have recent clinical data and the investor you’re meeting is a M.D. / Ph.D., chances are the investor will want to dive into the data. Or, if you’re a late-stage biotechnology company that is preparing for launch and meeting with a generalist investor, ensure that the investors you’re meeting with have a clear understanding of your commercial plans in your slide deck and part of your messaging. Ultimately, regardless of your talking points, avoid any jargon or over-detailing technical milestones if they aren’t tied back to value of the company. it is important to maximize on these meetings with investors and ensure that they are engaged throughout the duration of the company.
When To Go Off-Script (If Necessary)
There will always be a moment during these NDRs where it is OK to go off script. One of these reasons where management may find it OK to go off script could be because questions arise that aren’t covered in your prepared materials or comments and this allows management with the opportunity to provide additional and targeted information on those questions. Another reason to deviate may be that additional clarification or deeper insight is needed on a topic beyond what may be discussed. Management should be prepared to effectively go off script if necessary and have your messaging tight. It is also important however to not risk overexposure when going off script – don’t spend too much time on one topic and risk neglecting other topics.
One obvious note, if you’re risking any potential RegFD disclosure, remember to stay on script!
What To Leave Behind
From a strategic perspective, ensure that each investor you interact with on a NDR leaves a meeting with a strong and consistent impression of management’s clarity and focus to deliver on the company’s milestones and catalysts. This is not just on the science, however, as you want to ensure the investor has a clear understanding of your value proposition.
Following each NDR, ensure that there is a clean follow-up plan in place with your IR team. No investor should be left uncontacted to ensure continuity in dialogue and each should have a summary of bullets or key slides focused on upcoming catalysts and dates so that the investors can stay apprised of the company’s progress. It is important to always follow-up after each meeting as ghosting investors who didn’t express immediate interest will mean losing the opportunity to build long-term relationships.
Final Thoughts
In summary, an NDR is less about selling the company and more about building these relationships. Perception is everything – from making the time for these meetings to being prepared for the slew of potential questions you may face – and it is important to show the investors that you’re intention is to build a long-term relationship regardless of whether or not capital is changing hands.
Gilmartin Group has deep experience with supporting management teams on non-deal roadshows. For more insights on how Gilmartin partners with healthcare companies, please visit our resources section or reach out to our team to discuss how we can help support your next non-deal roadshow.
Authored by: Ami Bavishi, Managing Director, Gilmartin Group