Look well beyond the first-day pop for sustainable performance
The IPO journey doesn’t start on listing day. Companies that treat investor relations as an afterthought until the opening bell often find themselves scrambling to build credibility when it matters most. The statistics tell a sobering story: approximately only one third of newly listed companies outperform their already-listed peers over the long term. Poor financial communication sits at the heart of this underperformance.
Building relationships before you need them
Establishing an effective IR function well before your IPO creates something money can’t buy on demand: trust. When analysts and investors already know your story, understand your business model and have met your management team, the IPO roadshow becomes a conversation rather than a cold introduction.
How do you want the investment community to perceive your company?
This advance preparation delivers tangible benefits. Your stock launches with meaningful analyst coverage, while prospective investors arrive already familiar with your investment thesis, ready to discuss specifics rather than request basic company overviews.
The pre-IPO IR strategy
A pre-IPO IR strategy rests on several pillars that demand attention months before any listing date. Market positioning comes first. How do you want the investment community to perceive your company? This question shapes everything that follows, from the tone of your communications to the investors you target. But it’s more than equity branding. Proper market positioning directly impacts valuation, shapes market expectations and determines what type of investors you attract. Get this wrong, and you’re looking at hundreds of millions – sometimes billions – in lost valuation.
I’ve seen companies leave massive value on the table simply because they failed to position themselves correctly from the start.
The second step is investor targeting and it follows logically from your positioning decisions. Companies must recognize that growth-oriented funds and value-focused funds use fundamentally different evaluation criteria. Defining your ideal shareholder profile early prevents the costly mistake of attracting the wrong investor base – one that will exit quickly when your company’s reality doesn’t match their expectations. Ultimately, IR is all about managing and matching expectations.
The equity story deserves particular care. This narrative must align with your company’s vision and business strategy while resonating with your target investors. A compelling equity story doesn’t just recite facts and figures, it explains why your company deserves overtime in competitive portfolios, how you plan to create value for shareholders and deliver returns. This story should be embedded in the prospectus, the comprehensive legal document filed with regulators that details the company’s business, financials, risks and offering terms. The IR function plays a vital role here, working alongside legal and financial advisors to ensure the prospectus communicates not just compliance information but a coherent investment narrative that will carry through to post-IPO communications.
Finally, ESG considerations have moved from nice-to-have to essential. ESG must be integrated seamlessly into the IR strategy as institutional investors increasingly screen potential investments through ESG lenses. Companies that haven’t defined their ESG strategy, integrated it into their IR approach and identified relevant KPIs risk losing access to significant pools of capital before conversations even begin.
The roadshow advantage
IPO roadshows compress months of relationship building into weeks of intensive meetings. Companies with established IR functions approach these marathons with crucial advantages. They’ve already refined their presentation through earlier engagements. They’ve collected and addressed common questions. They know which aspects of their story resonate and which need stronger evidence.
The IRO must prepare executives for this new reality
Management teams benefit enormously from this practice. CEOs and CFOs who’ve never presented to institutional investors suddenly find themselves fielding tough questions about competitive positioning, capital allocation and growth sustainability. Prior experience with analyst meetings and investor days removes the learning curve from the most critical moments.
Here’s where the IRO’s educational role becomes critical. Management teams transitioning from private to public ownership often underestimate the intensity of market scrutiny and the discipline required for regular, transparent and timely communication. The IRO must prepare executives for this new reality: quarterly earnings calls that dissect every number, analyst questions that probe strategy and execution and a shareholder base that expects consistent messaging and timely disclosure. This cultural shift doesn’t happen automatically. It requires the IRO to coach management on best practices, regulatory obligations and the art of balancing transparency with competitive sensitivity.
Beyond the first day
The real test of IPO success isn’t the first-day pop in share price. Long-term performance depends on sustained investor confidence, which requires consistent and accurate communication. Companies that built IR capabilities pre-IPO start their listed life with momentum. Their IR infrastructure works from day one. Their management team understands market expectations and knows how to engage effectively with the financial community. This level of engagement doesn’t materialize overnight but it builds on foundations laid before the IPO.
Making the investment
Establishing a pre-IPO IR function requires resources and management attention. But the alternative – approaching public markets unprepared – carries far greater costs. Companies that invest in IR before their IPO position themselves to attract the right investors, secure better valuations and build relationships that sustain long-term success in public markets.
Stefano De Caterina is a senior investor relations manager with cross-industry experience spanning Europe, the US, the UAE and Saudi Arabia. He is also the author of IR Intelligence, a LinkedIn newsletter for IR and finance professionals.
