In This Issue
Communicating with Investors in a Turbulent Market
Reinforce and Remind
Quick Links
Moira Conlon Investor Relations

Moira is the founder of Financial Profiles, our partner for investor relations and financial communications.  Moira and her team bring specialized expertise to Lages.  They are ideally suited to assist public and pre-IPO companies in understanding how investors value their businesses, address issues that affect valuation, communicate growth strategies to investors, and build Wall Street support.

Investors are a critical constituent for any company whether publicly traded or privately funded through venture capital, private equity or angel investors.   In times like these, where the state of our economy, combined with the credit crunch are at the forefront, your investors are looking to you for feedback on the impact to your business.
And for those seeking capital, this is a particularly challenging time.   To understand the role of communications in this environment, I have invited Moira Conlon, our investor relations partner, to give us her thoughts.

Communicating with Investors in a Turbulent Market
Moira Conlon, founder of Financial Profiles, commented to me that she has been very busy over the last several weeks counseling a number of companies on how best to communicate with investors in this turbulent market. The following are some ideas she shared with me that are very worthwhile: 
  • First of all, impulsive reactions by companies are not likely to affect long-term remedies. Broad-scale investor confidence in the integrity of the markets will need to be restored over time. Therefore, proceed with business as usual and resist the temptation to be distracted by the cascade of events. Our team has been through major market corrections and we know from experience that steady hands and cool heads prevail.  
  • Continue to provide consistent and credible information and make management accessible. Credibility is built by consistent communication in good times and bad.
  • Be forthright about your risks and outlook. Investors are currently more focused on mitigating risk than finding immediate upside. Show the stake holders that you have thought through the worst case scenario. Describe the systems you have in place to monitor risk. If you lived through a downturn in the past, explain to investors how you managed through the disruption and what you learned from your experience.  
  • Talk about intangibles that drive valuation - brand, customer relationships, training, leadership, human capital, etc. Connect the dots for investors by explaining how these key attributes drive revenue and margin growth.  
  • Investor communications are important, but don't forget the importance of internal communications during disruptive times. Keep the lines of communications with employees open and  frank.                               
Reinforce and Remind
Reinforce your core business and strategy. Focus investors on why your business is viable for the long term, and tell them what they should look for in the next three years - not just the next quarter.
Put your story in context by addressing the industry issues that could impact your company. Remind them of the factors that are in your control and those that are out of your control. For example, if your company has exposure to credit sensitive customers, consumer spending, government spending, the price of oil or currency fluctuations, explain how you evaluate the risk and provide investors the best and worst case scenarios.
Communications takes on a new level of importance in times like these.  And remember as Moira says, "steady hands and cool heads prevail." 
Until the next newsletter, wishing you the best!

Beverly Lages
Lages & Associates, Inc.