Learn about the intricacies of an IPO roadshow, a series of presentations made by the underwriting firm and a company's executive team to potential investors leading up to an initial public offering. Understand the vital role it plays in generating excitement about the company and its IPO, introducing the company's management, and outlining the company's vision and goals.
Key Insights
- An IPO roadshow is a series of presentations made across different locations to potential investors by the underwriting firm and the company's executive management team leading up to an initial public offering.
- When a company decides to go public, the members of the investment firm responsible for the IPO travel around the country to present the investment opportunity to potential investors.
- The goal of the roadshow is to generate excitement about the company and its IPO by introducing the IPO to institutional investors, analysts, fund managers, and hedge funds.
- Roadshow events may attract hundreds of prospective buyers interested in learning more about the offering in a face-to-face setting and online, with the common inclusion of multimedia presentations and question-and-answer sessions.
- Topics covered during a roadshow often include the company’s history, future plans, a video or digital media presentation, financial performance and forecasts, investment opportunity and growth potential, and IPO stock price target.
- After the roadshow, a final prospectus is created and distributed to potential investors and is also filed with the Securities and Exchange Commission (SEC).
Roadshow Workflow
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Pitch Preparation
Investment bank prepares S-1 prospectus and pitch deck.
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Investor Meetings
1-2 weeks of meetings with institutional investors.
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Book Building
Bank tracks investor interest and indications of price/size.
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Pricing
Final IPO price set night before stock starts trading.
IPO roadshow is a series of presentations made in various locations leading up to an initial public offering.
The roadshow is a sales pitch to potential investors by the underwriting firm and a company's executive management team.
When a company decides to go public, the members of the investment firm responsible to underwrite or issue the IPO travel around the country in a roadshow to present the investment opportunity to potential investors. Most roadshows include stops in major cities like Boston, Chicago, Los Angeles, and New York City.
Typically, The roadshow lasts 8-12 days. Each day involves up to seven meetings or conference calls. Investors may meet several companies on a single day, so the presentation has to stand out to interest the investors in your favor.
A successful roadshow is often critical to the success of the IPO. The goal of the roadshow is to generate excitement about the company and its IPO. By traveling to different cities, underwriters introduce the IPO to institutional investors, analysts, fund managers, and hedge funds to interest them in the security. The roadshow also provides an opportunity for the underwriters to introduce the company's management and for investors to hear the management's vision and goals for the company.
Roadshow events may attract hundreds of prospective buyers interested in learning more about the offering in a face-to-face setting and online. Events may include multimedia presentations and question-and-answer sessions. Many companies may hold smaller, private meetings in the months and weeks leading up to the IPO, while the majority Livestream some of their events to those who can't attend. Some of the topics covered during a roadshow include the company’s history and any future plans. Other information may include:
- A video or digital media presentation
- Meeting the executive management
- The unique value proposition of the company
- Financial performance and forecasts
- Investment opportunity and growth potential
- IPO stock price target
Once a roadshow is complete, the final prospectus is created and distributed to potential investors. This prospectus is also filed with the Securities and Exchange Commission (SEC). An initial price for the offering is set based on the information gathered during the book-building process, and the IPO date is solidified.
