Presentations: Communication Lessons From the Krispy Kreme IPO Road Show – Part II: IPO
In Part I, I told how the CEO – a client – prepared to persuade bankers, analysts, and potential investors to buy stock from the Initial Public Offering (IPO). But what did he actually encounter? What surprised him? What did he learn? What can it teach the rest of us? In that spirit, and with the CEO’s permission, here is what he, his CFO, and head of investor relations experienced on the IPO road. My comments are in italics.
The Intensity – Six to 10 presentations a day totaling more than 70 over a two-week period. Each lasting 45 minutes with just 15 minutes to pack up, move to the next location, setup, and start again. The CEO said he was surprised at how grueling it was. “Like running for President,” he said. Important presentations are about your audience’s needs, not just yours. The IPO grinder quenches the information thirst of the investment world while testing your cool under fire.
The Presentations – The CEO used a laptop to share the excitement surrounding Krispy Kreme store openings and the doughnuts. Each PowerPoint page along with a written backup reminded him what to say. After the first five meetings he operated almost completely without notes. Presentations are about knowledge as well as communications ability. You cannot tell what you don’t know.
The Audience – They interrupted the presentation about half the time to ask questions. The CEO said he found himself completely off format 10% of the time. Twice, analysts just wanted to talk. He said that if the interrupters had let him continue then the presentation would have answered 95% of their questions. In spite of it all, he said he liked these give and take sessions.
The CEO used portions of the formal presentation to answer questions. He quickly learned which PowerPoint pages contained specific information and would leapfrog to them, out of order, to show supporting data.
MBA students making mock presentations note that you must convey facts even when interrupted and knocked off format. Information command is the key.
The Atmosphere – The CEO expected to be grilled by these no-nonsense numbers people, but they were not as adversarial as anticipated. They were interested, congenial, and positive. The 25-minute laptop video show – which the CEO narrated live – was a hit. He said the company had to take that unconventional approach because the investment community expected something different from Krispy Kreme. Nevertheless, sometimes the show was never completed because of the interruptions for questions. Had the audience been hostile, the CEO’s mission would have been to remain “the quiet voice of reason.” What matters is how you react.
The Insights – The CEO said he would have started preparing even earlier than he did. He recommends spending at least two weeks firming up the content and then a single week of rehearsing the actual presentation morning and night. He suggests much Q&A practice as well. He believes he had the right support system (including the right investment bank) to plan and execute the shows.
His Personal Advice – The CEO said, “Make sure you are ready for a public offering, have a good story to tell, and know your weaknesses. If you have a weakness they will exploit it. They will question your strategies. You need to be able to answer their questions in one minute, not 5. You will meet with 100% of the universe of people who will move your stock. Some of these investment people are the smartest folks in the world, and they are definitely prepared. I never met anyone who wasn’t. They came with our S-1 (prospectus) in hand, highlighted, underlined, and dissected. They will know everything about your company. You can’t make mistakes, there are no shortcuts, and you cannot over-prepare. Anyone can do a presentation or even have a story to tell, but you must be able to answer the questions with a lack of defensiveness. All the chips are on the table.”
The CEO also sat through about 4 hours of interviews at the cable television networks including MSNBC and CNBC. “It was the best media training I ever had.” Although I had media trained him months earlier, reality teaches best.
In summary, as financially oriented as IPO road shows are, the same old saws about presentations still apply – story-telling, total knowledge of subject, comprehensive rehearsal, Q&A development, and the confidence that comes from knowing that you know it.