SEATTLE, Sept. 24, 2019 /PRNewswire/ — With a second interest rate cut by the Fed last Wednesday and trade war swinging in either direction, uncertainty is in the air and investors don’t know what to do. While this is happening in the public markets, the private market is deeply connected because it relies on information that is readily available in the public market (i.e. market prices and valuing a startup). This is where Waccal claims startups need to up their game on Investor Relations (IR) to maintain and increase current and potential investor’s trust and confidence.
IR is often confused with investor communications, but it is more than that. It includes financial updates, business strategy, capitalization table (cap table) management, and corporate governance. Just like public market investors, private company investors like Venture Capitalists and Angel Investors need to know whether they should keep their money invested in current portfolio companies and if they should infuse more money by exercising their pro rata rights (rights to invest in the future).
A 2018 IR Magazine report states that 93% of investors and analysts make their investment decisions on the quality of the company’s IR. Globally, 31% of portfolio managers are willing to add 5%-10% onto the valuation of a company with good IR. Good and quality IR means consistency and with fiduciary responsibility in mind. Here is what Warren Buffett says, “They [investors] should all get the same information, they should get it in the same time, they should get it with the same degree of candor, regardless of the amount of shares they own.” But how? Use technology, and by that we don’t mean email. Investors don’t like emails because they get too many and information gets lost or in the wrong hands. Use an IR platform. At Waccal, here is our guidance on frequency: Angel and Seed Round – every month, Series A Round – every other month, Series B and on – Quarterly. With uncertain times like these, go monthly for startups of all stages.
Waccal is the new standard for managing investor relations for private companies. Businesses of every stage, from new startups to mature companies use Waccal’s suite of tools to provide transparency, close information asymmetry gaps, and reduce the risk for investors. Waccal enables businesses and investors to perform their fiduciary duty with a high degree of candor and consistency.