AGORACOM Small-cap Investor Relations Blog

You heard it here first.  Bookmark it, bet on it.  The most successful small-cap stocks of the next decade will overwhelmingly be led by “webified” CEO’s that fully understand:

1. Shareholders want to interact and be part of your company’s conversation.  Don’t fear them.  Contrary to popular belief, 95% of investors want to gain knowledge and provide constructive feedback.  Listen to what they have to say, incorporate their best ideas and you will have happy, loyal shareholders.
2. Prospective shareholders are looking for you.  They are using search engines, electronic shareholder forums, blogs, social networks, videos and good ol’ word of mouth to find a company to park their money with.  They are not using their brokers.
3. 1-1 communications are over. E-mail, phone calls and visits to your websites are slow, inefficient and over.  Today, you have the tools to communicate with hundreds/thousands of people simultaneously.
4. Shareholders are global.  Tear down barriers related to geography, time zones and language.  The best way to both connect with current investors and reach new investors in the four corners of this planet is by incorporating each of the following into your investor relations program (in no particular order):

Fair warning to all small-cap CEO and investor relations officers:  If you don’t know what these are, never used them and – most importantly – don’t know how to integrate them into your IR program, your chances of success will be significantly diminished.

Believe me when I tell you.  We have already entered the next era of investor relations.  Thanks to the SEC (they did something right in 2008) the digital investor relations dam has burst and IR departments of the world’s biggest companies are now scrambling to understand and incorporate “IR 2.0”.

The good news?  It isn’t as difficult as you think.  We know because we’re already using these tools in our daily communications…just click on any of the logos above to see us in action.

Damn, now I have an itch to take AGORACOM public.

Regards,
George

If you are a small-cap or micro-cap CEO and looking for investor relations guidance during these challenging markets, then you have come to the right place.

First, it is important to understand that during this kind of market environment, investor relations is not just about increasing your share price.  Every company is getting hit, so to think you can buck that trend isn’t realistic.

Rather, your goals in this environment are:

• Short Term – To mitigate any further losses to your market capitalization.
• Longer Term – To take advantage of competitors with weak or non-existent strategies and capitalize on current opportunities.

Both goals are heavily dependent on your IR communications and strategy.  A properly executed strategy will yield great long-term results, while running for cover and failing to communicate is a guaranteed recipe for disaster.

With all this in mind, here is the AGORACOM recipe for success during periods of market turmoil.

1]  Silence Is Death – Have you ever had a friend or family member owe you money but suddenly become hard to get a hold of? How did you feel? Do not make your shareholders feel this way or they’ll write you off as a bad debt and was their hands clean of you. This is no time to duck for cover if you believe in your business, your plan, your management team and your board.

2]  Provide Long-Term Vision – Investors are worried by these short-term market gyrations.  It is your job to get shareholders to look beyond this gyration and remind them that you are building a long-term business that will survive and thrive beyond 2008.

3]  Accentuate Your Strengths – Provide shareholders with a press released corporate update that discusses the strength of your product / services / project / technology (depending on the business you are in).  Be sure to also address the long-term viability and strength of your industry.  Remind investors that there will always be a widget industry and you are one of the companies that will be benefiting from it.

4]  State Of The Union – Support your corporate update with a multi-media “state of the union”.  Specifically, tape an audio or video address for your shareholders that conveys confidence.  If your text based corporate update in step 2 provides the facts that assure investors, your multi-media address will provide your shareholders with confidence they are in the right hands.  No matter what the context, people need to hear from their leaders.

5]  You’re Not Bullet Proof – Be honest about any negative impacts to your operations.  Shareholders don’t expect you to be bullet-proof, so openly telling them about the 2 or 3 items in your business that have been impacted demonstrates an honest and realistic management team.

6]  Competitor Weakness – Though you should never specifically name a competitor, do to tell investors about any significant problems with your competitors, some of whom will not make it through this period due to poor planning or business models.

7]  Business As Usual – Do not hold back press releases as part of a market timing strategy.  Yes, be careful not to issue press releases on a specific morning where futures are showing significant weakness but it is business as usual, so get on with your business and continue issuing press releases.

8]  New Blood – Never, ever stop looking for new investors.  You are in a position to benefit from the following two ways:

First, we all know that a significant portion of small-cap and micro-cap stocks are unfortunately built upon unviable business models.  That is the nature of the business.  Shareholders in those companies will see the writing on the wall, take their tax losses and start looking for high-quality alternatives that can help them get back above water over the next 12-24 months. Be that alternative!

Second, investors that were smart enough to raise cash earlier in the year will be looking to come back into the markets over the next 2-3 months.  They will be looking for good companies with good management teams executing a plan that will succeed over the next 2-3 years. Be there when they come knocking!

CONCLUSION

If you need any more proof about the validity of this plan, I ask you to once again follow the AGORACOM experience.  Despite the fact markets are going through tough times, we have managed to maintain a status quo and actually grow while other investor relations firms suffer.

Why? We practice what we preach.  We communicate with and help our customers as much as ever, while continuing to market ourselves via search engines, our blog, e-mail newsletters and business television ads to attract new customers.

If you follow our plan, never lose site of the fact that you currently have great shareholders and remember there are millions of other shareholders looking for companies like yours, you will succeed in mitigating short-term losses while maximizing long-term success.

Regards,
George

UPDATE: IR Web Report picked up our story when they posted their own piece on this important subject. Take 5 minutes to read it because IRWR is a neutral, well-respected publisher of online investor relations strategies and its principal, Dominic Jones, has consulted to some pretty major companies around the world.  You will note he stresses using Web 2.0 tools to negotiate quickly, broadly and efficiently.

He also refers to another pretty good list of IR best practices during market turmoil by Johnson Communications. You will note a lot of crossover with my list, as well as, some other good points.