As a responsible member of your small cap company’s executive team you are constantly looking for cost-efficient tools and methods to help boost your investor relations initiative. Traditional and tired methods such as meeting with brokers and analysts are expensive, inefficient and, most importantly, ineffective for the majority of small cap companies thanks to rules that make it all but impossible for brokers to recommend penny stocks to their clients.
The good news is that online investor relations tools offer you a cost-efficient and effective way to market yourself to smallcap investors who are specifically searching for their next investment. Make no mistake – many smallcap investors are aggressive, savvy, liquid, and willing to take a calculated risk by allocating some of their funds toward your company if you can demonstrate a strong value proposition.
For those of you not yet convinced, consider the following AGORACOM survey results of more than 700 investors from two different investor conferences in Toronto and Calgary in March of 2007:
- The Internet accounts for 78% of the decision to invest in smallcap stocks.
- 60% of all smallcap investors use online discussion forums to obtain information.
- 28% of investors would use discussion forums if quality control measures were implemented.
- 99.5% of smallcap investors use the Internet to conduct research.
If you weren’t convinced before, you should be now. The numbers don’t lie – and neither does the logic. Think about it: How many times do you or your peers receive coverage by the major financial media (newspaper, television, magazines, radio)? The answer is pretty much never with the exception of one-off interviews for the fortunate ones – and that just won’t cut it. As a result, smallcap investors don’t rely on traditional financial media as a source of new smallcap investments. Rather, they are forced to use the web to find their next smallcap investment.
That is where you need to be.
A WEBSITE ALONE IS NOT SUFFICIENT – VISIBILITY IS THE KEY
If you think having a website is sufficient, think again. There are so many websites in the world that Google can’t even properly index all of them. Your shareholders may know about your website but you need to formulate a strategy that continually attracts new potential investors to your story. Here are a few great strategies. Don’t be intimidated by any lack of knowledge or technology, services such as those available at AGORACOM are at your disposal for a reason.
Search engines at Yahoo, Google and MSN generate billions of dollars in annual revenue for one simple reason – they match people looking for widgets with people that provide widgets. In your case, they can help match investors looking for smallcap stocks with companies that sell smallcap stock. It is that simple. The beauty is that you can precision target only those investors interested in your specific space. If you only want to spend money on finding investors interested in oil and gas OR metals and minerals OR clean tech, etc. you can do so and, by so doing, preserve valuable cash flow.
Smallcap analysts, investors and mouth pieces are now using blogs to express their opinions and analysis. Why? Because blogs give writers an instant way to throw themselves into the global information stream that was once reserved for a small group of financial journalists that are now no longer a match for a global network of smallcap talent. The result? Blogs are becoming a preferred source of information for investors looking for great investment ideas. Think blogs are for the fringe? Tell that to Sun Microsystems and General Motors . If they are doing it, so should you.
The ability to broadcast your message for the smallcap community to hear at any time is powerful. Unfortunately, with the exception of some generic “canned” messages or interviews, most small and micro-cap companies have all but ignored this medium. Why is it so important? Webcasting gives you an ability to connect with your investors and potential investors that text can never accomplish.
Podcasting is webcasting on steroids. It is the Web 2.0 vehicle that allows your message to spread via keywords, phrases and tags to anyone around the world looking for a company like yours. You can broadcast your message on iTunes or any number of huge podcast sites around the world for investors to download. Think podcasting is for the fringe? Tell that to Jim Cramer, host of Mad Money. Incidentally, AGORACOM has launched SmallCapPodcast.com which is broadcast around the world via iTunes, Yahoo Podcast and other such sites.
What’s the best part about online investor relations? Cost. Better yet, ROI. You can reach the entire smallcap community without impacting your cash position – and I’m not just talking about investors. I’m talking about brokers, analysts, fund managers and financiers. In short, everyone you need to make yourself a better company.
Since 2005 ITB Solutions has provided listings development services to stock Exchanges in Canada such as the Canadian Securities Exchange. ITB Solutions currently provides New Listing Services to the NEO Exchange. We assist companies with the listing application and managing the process to become publicly tradable in Canada, as well as offering advice on how to make the most of your public listing. You can reach Jeffrey Stanger at 647-500-0492 or by email at [email protected]