A privately owned company that is seeking to go public will showcase their company to investors. Often, one of the primary ways that this process is done is sometimes referred to as a ‘dog and pony show’. Known by its current name, the roadshow, it can be by an excellent opportunity to learn about an up-and-coming investment opportunity. The roadshow is a tool used to market a company and is geared towards the large-dollar investors and corporations.
Once the company has registered with the Securities Exchange Commission (SEC) of their intent to offer securities, they are free to hold roadshows as a way of generating interest and investments. Generally, the company will select a group of executives to host the roadshows who are able to answer questions from potential investors.
Purpose of Roadshows
During the roadshow, the executives will inform the attendees of reasons why they are doing an IPO, a financial outlook for the company, a potential opening stock price and any other questions that investors may have. They will provide interested parties with facts, figures and documents all designed to demonstrate the investment worthiness of the company. All of the pertinent information is gathered together into an official document called a ‘Prospectus’.
Aptly named, the roadshow began as a literal travelling show that would have company executives circumnavigating the globe in an effort to reach investors. With today’s technology, the roadshow can be as simple as a webcast or a conference call. Regardless of the method of delivery, the modern roadshow still succeeds in being one of the most popular and successful events available pre-IPO.
The roadshow may be the first of many events for a company and may also be used as a filter for investors who are truly interested in hearing what the company is offering, while weeding out less likely candidates.