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Investor Relation efforts – Not just for Public companies.

April 7th, 2009 Comments off

     I was talking with a friend over the weekend and telling him about I group I would infrequently attend meetings for, NIRI, or the National Investor Relations Institute. They have a fantastic Orange County chapter and a number of the members have become friends over the years.  I was asked why I attended the events since they typically catered to the I.R. position for public companies, or those heading down the IPO path. True, the meetings are targeted to those individuals, but the investor relations effort isn’t confined to a delegated / dedicated position or solely public companies. In fact, I tend to believe the effort needs more focus for a private company since public information isn’t readily available and if banking, vendor, and other key relationships are to be fully leveraged, then there needs to be some level of transparency for them to base their decision making on.

     More specifically, I make a point of maintaining active discussions with our bank to keep them updated on our monthly & quarterly results, as well as any material changes to our Forecast. While there’s a certain built in level of accountability (& risk) in starting these conversations, the benefits gained from delivering on previously discussed plans is invaluable. Not to mention the credibility that will be built over time. It’s a message constantly delivered in the market place…”Relationships need to be developed before you need them”, or in this case credit lines, but it’s absolutely true. No, I’m not undertaking this exercise because I have covenants that need to be managed or our company is in some level of distress, it’s merely good business practice.

     I’ve had some great folks that I have been able to work with and for, who have provided some great circumstances to learn from with respect to investor relations. More importantly, the investors in your company are not only those who have contributed working capital, but those who are investing their time and corporate resources to help your company succeed. Whether they are getting a return as an investor on the sidelines or securing returns working as a corporate agent, they should still be viewed as investors?  How do you view your key relationships and manager your IR efforts?

Thanks for reading . . . .

Jeffrey Ishmael