The Horse Race

Typically, a CEO and CFO spend two or more weeks traveling from city to city to pitch the company’s IPO. The audience usually consists of institutional investors, analysts, portfolio managers, and venture capitalists — professionals who influence the investing decisions of a great many other people. And this won’t be the first IPO road show they’ve attended. In fact, yours may be the fourth or fifth presentation they’ve seen that day. So what will it take to impress them?

Bill Joos, a veteran entrepreneur who coaches IPO teams on how to create road shows, says it helps think of potential investors as “bettors” watching a horse race. They basically want to know about three main things: the condition of the track (the market), the speed of the horse (the business idea), and the experience of the rider (the management team).

• The track: According to Joos, the marketplace is like a racetrack. “If your idea has no market, you’re not going to get into the race,” he says. Your presentation has to show the investors the condition of the racetrack (the market), why customers buy from you, and how you will increase your market share.
• The horse: Joos likens a new business idea to a racehorse. “It must be fast, fluid, and flexible enough to lead the field even in times of change,” Joos explains. Hit the high points of your financial statements. Investors know the numbers will change as the market changes, but they want to hear your reasoning.
• The jockey: In this analogy, you and your management team are like the jockey guiding the racehorse to victory. Investors want to know that there is a top-notch team engaged in this race. Show them you’re the best team” and you’ve got the experience to make this company a winner.

To read more of Bill Joos’s advice on developing a winning pitch, click this link and go to the Fast Company website: www.fastcompany.com/articles/archive/act_joos2.html.