marcus laun

1. CEOs think that executing on the business plan is the only factor that affects the stock

Unfortunately, the public company’s CEO also has to manage the “Stock” as well as the Company. This means that 50% of your time can be spent managing your team and 50% of your time should be telling your story to the outside world.

2. CEOs think that Investor Relations is a waste of Money

A good Investor Relations campaign is probably the best use of capital a CEO can have. The IRR on investor relations can easily be hundreds or thousands of percent! To spend 100k on an effort that adds many millions in market cap is a no-brainer. CEOs need to commit to IR and maximize the effort by also committing personal time and effort to make it work well. IR cannot exist in a vacuum, it needs additional resources from management to have it be effective.

3. CEOs think that being “public” means automatic access to capital

CEOs often come to me seeking solutions after a recent “go-public” transaction. They go public thinking that everyone will come and offer them money because they now have a publicly trading stock. Unfortunately it doesn’t work out that way – significant efforts need to be undertaken to:

Expand the shareholder base through public trading of the float

Increase liquidity – to reach a level that institutions are comfortable investing

Educate and nurture institutional relationships resulting in significant capital access

4. CEOs stop communicating with their investors

CEOs often stop communicating with investors except for when they need capital. Unfortunately, investors are rightfully disappointed when CEO’s “go dark” on them after a financing. CEOs usually do this because they aren’t meeting the milestones that they communicated to the Investor. CEOs need to know that management very rarely meets their milestones as detailed before a financing. Communication is more important – investors can be there to help if they are informed of a situation.

5. CEOs think that share price is more important than liquidity

CEO’s often don’t understand that a high share price doesn’t benefit a company unless there is trading volume at that level to “validate” the implied Market Cap. Institutional investors see through this quickly and won’t touch a company with high market cap as implied by a share price that is artificially high.

About the Author

Marcus Laun is the founder of Growth Circle – a Corporate Awareness consulting firm that creates and distributes high quality media to an investing public. Growth Circle’s lead product is a high quality documentary style video. Marcus has many years of experience in helping management teams raise capital and communicate with investors.