The Bristol Capital team has been working with small, publicly listed companies since 1999 giving us a unique perspective and understanding of the importance of effective communication with investors. Public micro-cap companies often face unique challenges in terms of resources and market awareness, which makes it critical to have strong investor relations practices in place.

As part of the Bristol Insights series, we summarize the most important best practices for investor relations that small public companies can use to build and maintain strong relationships with investors:

Transparency is essential

This means providing timely and accurate information pertaining to financial performance, business operations, and corporate developments. Investors appreciate openness and candor and want to have a clear understanding of the business and new developments in the company.

Timely and Consistent Communications

Keeping investors informed about material changes to the business through regular and consistent financial disclosure along with any other material news or events that could affect the company is critical. Earnings reporting dates should be consistent each quarter and material news should be released at the same time of the day, either pre or post market, so that your investors are not caught off guard by the inconsistent timing of new information being released.

Know Your Investors

Understanding the makeup and composition of your company’s shareholders and their investment objectives are extremely important. Retail investors vary significantly from institutional investors in terms of holding size, position holding time, and how their respective investment position is viewed. Understanding the composition of your shareholder base can help the company tailor its investor relations strategy and efforts to meet the specific needs and interests of its target audience.

Be Proactive

Investors are critical to any micro-cap company and expanding your pool of potential owners to help drive liquidity, valuation and access to capital, can pay huge dividends for small companies. Gaining access to new investors through various means/efforts while focusing on strengthening existing investor relationships through proactive outreach and communication is essential.

Focus on Long-Term Growth

Emphasizing long-term growth goals and opportunities with a focus on building a sustainable business model is essential. This means consistently communicating the company’s long-term vision and business strategy, including its evolution over time, to investors on an ongoing basis. Many institutional investors are long-term holders and many public micro-cap companies lose potential investors by not providing a clear long-term growth strategy.

Build Long Term Relationships with Investors

This includes regular communication, timely responses to investor inquiries, and engagement directly or through investor events and conferences. Investors want to feel valued, and building a relationship is one way to demonstrate that the company values their investment.

Leveraging Digital Communications

Digital communication tools can be an effective way to reach investors and build a following. This includes email marketing, use of social media, and webcasts, which can reach a wider audience and provide more real-time consistent communication.

Corporate Governance

Emphasizing strong and consistent corporate governance practices is important. This includes an independent board of directors, regular board evaluations, and a commitment to compliance with all relevant laws and regulations. Governance commitments and documents should be published on the investor relations section of your website.

By following these simple rules of best practices, public micro-cap companies can strengthen their reputation with investors, increase visibility in the capital markets, and position themselves for long-term growth and success.