The roadshow

Common during the quiet period is a two-or three-week
speaking tour of the company’s top executives and the lead
underwriter, often referred to as a roadshow. The tour often
covers a dozen or more cities with key financial centers
where institutional or individual investors have indicated
strong interest. In offerings where some shares will be sold
internationally, the roadshow can include international stops.
The roadshow is usually organized by your lead underwriter.
The filing requirements of roadshows are covered by an SEC
rule (Rule 433 under the 1933 Act). Most roadshows will not
be deemed to be free writing prospectuses and, therefore,
will not need to be filed. Most are live presentations and will
be deemed not to be written or graphic communications
even if they are simultaneously webcast or transmitted with
the live presentation into other locations. The slides that are
generally used in presentations are also not deemed to be
written or graphic communications if they are transmitted
simultaneously with the live presentation. In contrast,
prerecorded electronic roadshows for an IPO will be deemed
free writing prospectuses and will have to be filed, unless
the company makes at least one version of the electronic
roadshow available without restriction to any person (for
example, by posting it on the company’s website), which
many companies do to avoid the filing requirement.
The roadshow’s purpose is to make presentations to key
potential investors, portfolio managers, and analysts.
These meetings allow people to ask questions about the
company and the material contained in the prospectus.
The information covered during the presentations and the
questions from participants will be similar to the earnings
and analyst calls expected after you go public. They are
meant to build enthusiasm and momentum for the offering
and normally occur within days of the pricing of the
You should view these meetings as opportunities to present
the story of your company to those people who will buy
your stock, sell the stock for you, or influence the people
who buy. The company needs to be extremely cautious prior
to presenting forecasts to potential investors and should
discuss the advisability of this with counsel well in advance
of the roadshow.
Many of these key investors, portfolio managers, and
analysts will be participating in future quarterly earnings
announcement conference calls (after you go public) and
will otherwise follow the company’s progress. If you are
meeting them for the first time, you should take care to
convince them that you and your associates are people of
ability and integrity who will provide solid leadership for your
company in the years ahead. Your purpose is to demonstrate
not only the growth potential of your company, but also the
executive capacity of your team.
An investor relations advisory services firm may assist you
with independent and objective counsel on prospective
investors. The ranking of institutional investors based on
investment criteria and quantitative modeling will assist
in prioritizing opportunity and time during the investor
outreach process. This will allow an issuer to be selective
and precise when dealing with the institutional investment


Roadshows (like all other publicity during the offering), even
if they do not have to be filed with the SEC, are still subject
to the antifraud provisions of the securities laws. You should
be very careful about what is said in the roadshow, and
the company’s legal counsel should review the roadshow
presentation. The underwriters, legal counsel, and investor
relations advisory services firm may provide coaching on
what questions to expect, how to answer them, and what
you can and cannot say during those meetings. A roadshow
can be very grueling but it is an important component of
the IPO process. Before, after and between presentations,
including at meals, you may meet with individual analysts
who specialize in your industry and can help build
relationships and coverage of your offering. The tour can
educate the financial community about your company and
help generate and sustain interest in your stock through the
period of the offering.

Making the best presentation
When you and your top executives present the roadshow
and appear before analysts, brokers, and investors,
your company will likely be judged in large measure
on the strength of your performance. How clear is the
presentation? How well organized is everyone? Can you take
the heat of tough questions?
While you can expect guidance and suggestions from your
underwriters, attorneys, and others on how to conduct
yourselves, you should be sure that you are comfortable
with the presentation — both what is in it and how it is
presented. This is your opportunity to tell your company’s
story, and you will have to execute operationally to meet
the expectations that you and your management team have
set through these presentations and the disclosure in the



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