Five Strategies for Small Cap Companies to Attract Major Investors

If you work for a publicly traded company, you and your investor relations director can take simple yet effective steps right now to significantly increase your company’s exposure and attractiveness to investors, thereby boosting share value and shareholder support.

These are straightforward, yet effective strategies for building and maintaining a loyal and growing investor base. Read them and reap the benefits.

[1] Maintain a One-Step Advantage Over Your Investors –

Provide current and accurate information about your business.

How do the majority of investors distinguish a good stock from a bad one? They do not… It informs them. It informs them through its trading activity, volume, and chart history, among other indicators. But most importantly, it informs them with a single click: “View Latest Headlines.”

Indeed, do so immediately. Conduct due diligence and make trading decisions on your company’s last five press releases online (where the majority of investors conduct due diligence and make trading decisions). Is your company’s stock a buy based on what you see?
If you have recently repainted the structure, that is fantastic! Make a point of mentioning it at the next office party. However, if your company has recently signed a multimillion-dollar global distribution agreement, invest the few hundred dollars in the press release. Even better…split that one large PR into three or four smaller ones. When it comes to significant positive news, quantity trumps quality, a phenomenon dubbed the Shotgun Effect. When the news is unflattering or involves general housekeeping, the converse is true; keep those announcements brief and infrequent if possible.

Additionally, keep your company’s website up to date. Ascertain that your company’s website includes all recent press releases and that the information is updated quarterly. If your business is not growing or changing at a sufficient rate on a quarterly basis, someone is not doing their job.

[2] The Happy Shareholders’ Whispers Can Be Deafening

Word of mouth is still the most effective form of advertising. If you have the opportunity to speak directly with any of your shareholders, inquire as to how they first learned about your business. The most likely response will be “from a fellow investor.” There are individuals out there right now who are knowledgeable about your business and are willing to recommend it to everyone they know….or not. They are referred to as shareholders. The trick is to keep that army of voices well-supplied with positive news to spread.

Bear in mind that your shareholders have the ability to promote and discuss your company and its investment potential in ways and places that you are legally prohibited from doing. You, as an executive of a publicly traded company, are one of the few who lack complete freedom of speech in this Internet / information age. These shareholders are your not-so-silent majority that is constantly advocating for (or opposing) you on the World Wide Web, in places you probably are not even aware exist.

If you truly want shareholders to become passionate about your company and spread the word, try calling one of them or sending a personal email; even if it is just to say hello and thank them for their support. To some investors, speaking directly with the CEO of a company in which they own stock is akin to speaking with the Governor. I have witnessed it. What is more, I have heard about it.

[3] The Hungry Cat Is the Most Effective Hunter

Is it still audible if a tree falls in the woods and no one is around to hear it? Who gives a damn! However, if your company announces good news and no one is present to hear it, someone will notice; your shareholders.

Nothing demotivates current shareholders (as well as potential new ones) more than seeing a stock close with little or no increase in share price or volume on a day when positive news is released. While wire services are global in scope, it is more than likely that your company’s press releases will be monitored and (hopefully) read by only your existing shareholders.

As previously stated, the most effective method of attracting new shareholders is to enlist the assistance of current shareholders in the “hunting.” Consider this; if each of your shareholders fully understood and believed that there would be twice as many of them, the share price would likely be double what it is now. You must constantly grow your army of shareholders if for no other reason than that all of your current shareholders will eventually sell and move on…it is only a matter of when.

[4] Organize Yourself. Prepare. Get Started!

The entire room is focused on you. “All right, Boss, what is the game plan?” And then you respond….
Your corporate strategy for gaining shareholder support and awareness is analogous to a road map that details the quickest and most direct route to your destination. The easy part is planning the trip. Getting everyone else on board may require some effort. That “work” begins with everyone understanding their specific responsibilities and the most efficient way to carry them out.

This brings us to the phrase, “Get Moving!” Activity generates productivity, and productivity generates new shareholders while also assisting in the retention of existing ones. Create a 30- to 60-day calendar outlining your shareholder awareness program. You should be able to pinpoint specific developments that should occur throughout the week.

To begin, avoid falling into the getting ready to get ready trap. Once you have assembled the majority of your operation and team, get them started. Avoid becoming discouraged if your initial results fall short of expectations. This is more akin to running a marathon than a sprint. To get your operation up and running for the long haul, it may take a few small steps at first.

[5] You Cannot Expect to Receive What You Are Not Willing to Examine

Delegation is not synonymous with leadership. You must maintain contact with those responsible for implementing your shareholder awareness and support programs. What they do correctly and what they do incorrectly will determine the program’s success. Your management (and inspection) of the program and those responsible for its implementation are critical components of achieving your objectives.

Regrettably, the majority of investor relations responsibilities are frequently viewed as a necessary evil. However, if you want your stock to reflect a healthy market capitalization, you must be prepared to go above and beyond. Take control of your investor relations program on behalf of your shareholders and ensure that everyone involved understands exactly what is expected of them.
These straightforward yet effective steps will have a significant impact on how current and prospective shareholders view your efforts to earn their support by first supporting them. Leadership is simple….if you are willing to take it on.

36 thoughts on “Five Strategies for Small Cap Companies to Attract Major Investors”

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