For a long time, Investor Relations was viewed as simply the process of distributing information to potential investors and their advisors: issuing press releases, meeting with analysts, holding investor meetings, and publishing annual reports.
In many ways, this was perceived as basic marketing – communicating to attract investors, without acknowledging that other companies are simultaneously doing the same, competing for the same capital.
What is often overlooked is that a company’s stock – representing its financial product – should be treated just like any other product. Just as companies compete in the commercial market, they must recognize that their stock competes with that of other listed companies in the capital market, fighting for the same investors and capital.
Access to capital is a global contest, with thousands of companies vying for the same growth opportunities and investment inflows. It is no longer enough to simply be present; companies must be prepared to demonstrate why an investment in them is a reliable, worthwhile opportunity.
To succeed in competing for equity, every company must clearly present – with clarity, honesty, energy, and skill – those factors that show it is a sound investment. The company must exhibit ethical behavior and build a credible, compelling equity story, but most importantly, it must meet the distinct needs of various investors.
Small and medium-sized companies, while often urgently seeking greater visibility to attract selective investors – whether professional, institutional, or private – must view investor relations as a strategic function that can positively influence investment decisions. It’s crucial to create transparency in all communications and establish trust with potential investors.
Therefore, companies should undergo a self-awareness process to identify their investment proposition clearly. Understanding the type of investors they aim to attract is paramount. It involves identifying the correct investor audience, tailoring communications to meet their expectations, and ensuring that the company’s message is consistent, truthful, and aligned with market standards.
A voluntary and supplementary disclosure process, alongside mandatory reporting, helps to build deeper relationships with investors. This approach should focus on full disclosure, with messaging that is clear, truthful, and aligned with market rules. The goal is to ensure that the key business drivers of the company are well understood and visible to investors.
To compete effectively, companies must apply sophisticated marketing strategies to identify potential investors globally. A company’s success depends on understanding the financial community, the roles of different stakeholders, and how they interact. It’s essential to know who the investors are, what their investment strategies entail, and how these strategies align with the company’s investment proposition.
By understanding these elements, a company can attract the right investors and maximize its market value, effectively competing for capital in a crowded and competitive global market.
Bianca Fersini Mastelloni
Bianca Fersini Mastelloni is Chairman and CEO of Polytems HIR. She is a seasoned consultant in Corporate Communication with extensive experience for over 35 years. Since 1999 she is active in Investor Relations and Financial Communication for companies listed on the major financial markets. Bianca provides strategic IR, corporate access in Italy, Europe, USA, investor’s market intelligence, profiling investors, critical communication and reputation. A scholar of issues pertaining to Communications and Investor Relations. Bianca studied at SUNY – State University of New York, Buffalo and at Boston University, Boston, and she works as lecturer with some Italian University. Bianca is author of the book Investor Relations ed Etica , Efficacia e Vantaggi Competitivi - edited from Guerini e Associati - as of as several articles about Investor Relations and financial communication. Bianca has been selected as the most influential CEO 2023 in Italy for Investor Relations and Financial Communications by CEO Monthly, the international publisher of AI Global Media.