The single most frequently asked question I hear when working with new clients is: “How do we tell our investment narrative in a crisp, concise way that is powerful and compelling?”
The problem
In today’s increasingly fast-moving and noisy markets, it’s getting harder and harder to make your company’s investment narrative stand out.
Have you noticed that so many investor presentations seem formulaic? They’re all sounding pretty much alike these days.
Here’s what I see:
- Too many investor presentations take too long to get to the point.
- They tell the narrative but don’t write it down on one single slide to make it easy to find.
- They try to address many audiences but end up diluting their message.
The question is: Why would an investor take the time and effort to go through your investor presentation when they can simply pick up a sell-side research report highlighting your competitors and you all in one place?
Even the most industry-savvy investor will find themselves at a loss if they can’t pin down the details that make your company worth their time and money.
The solution
Whether you’re getting ready for a roadshow or preparing content for your next Investor Day, Job #1 is to make your investment narrative dynamic and fresh.
Your investor presentation is your upfront and leave behind opportunity to lay out your investment thesis in a clear and compelling way so they want to learn more about why they should choose you.
So, what can you do to make sure that your IR presentations are memorable and compelling?
First, never make the reader work for it. Right up front on Page One needs to be the tear sheet with your investment thesis.
Next, focus on the recent successes of your company, mission, and vision – which should only take a few minutes to define.
And finally, make sure you cover “The 3 T’s of Investor Presentations” – three must-have elements to a compelling investment narrative:
The first T: Total addressable market (a.k.a TAM)
Outline the size of the prize.
Demonstrate your knowledge of market dynamics, and competitors, and show how you’re positioned to capitalize on current and future secular growth.
This is your TAM. As obvious as it sounds, the TAM remains a must-have element in every investor presentation.
Get specific. For example, if you’re talking about an ad-based business, point out that US digital advertising spending is $260 billion today, growing at 6% this year, and that you’re playing within the emerging sub-category – retail media networks – which is growing at three times the overall rate at over 18%.
Investors care more about what you think is achievable vs. how big or fast-growing your TAM is.
Total Addressable Market applies to geography, industry, market segment, and customer segment.
Select a credible, recognized third-party source for the market size and expected growth.
Don’t use your own definition – but do deep dive into how you think about customer needs and how your company is best positioned to win in your chosen playing field.
You could cut the customer segmentation of the market in a variety of different ways to provide a fresh take on the data.
State your commitment to growing market share or expanding the overall market. Don’t just grab the top market size number – explore different ways of calculating it.
The second T: Targets
Targets provide quantitative measures of your company’s performance, including revenue, gross margins, and earnings or EPS. Set three to five-year targets.
The debate of issuing earnings guidance is a whole rabbit hole we could get into over coffee or in a different article.
While investors prefer concrete target ranges, you should at minimum speak to the dynamics that will shape the different business outcomes from successfully executing your long-term strategy.
The third T: Tangible proof points
Many presentations declare the company’s strategy, but you need to go further. Tangible proof points should demonstrate how management is executing against your stated strategy.
Show that your strategy is already in place, you’re seeing early results from it, and you’re ready to scale it.
It’s important to have company leaders in operations, technology, sales, marketing, and other functions provide concrete examples.
Filling out the how is the most important way to demonstrate the strategy that you laid out is already underway and showing promising signs.
Solid evidence builds trust and confidence in you and your company.
In summary
Keeping things clear, simple, and accessible is essential for keeping your investors engaged with your company.
There is no replacement for one or two charismatic and knowledgeable presenters, of course, but by taking the time to ensure you include “The 3 T’s of Investor Presentations,” you too can exude a type of charisma – competence charisma.
By covering the 3 T’s, you ensure that your audience takes an interest in your investment narrative, comes to understand your company’s growth ambitions, and believes in your ability to execute well.
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Learn more about how I help clients build their investor relations playbook here.