BOULDER, May 20—Most investor relations firms start working with clients around the time of their initial public offering. The new capital markets group at Boulder-based Metzger Associates hopes to differentiate itself from the competition by working not only with public corporations but also with early-stage companies that need help raising capital and communicating a business strategy to financial audiences.
The capital strategies group will be led by vice president Subhaash Kumar, a former analyst. Kumar joined Metzger from wireless infrastructure software Livemind, where he was director of investor relations and corporate development. Previously, he held positions with Montgomery Securities and Loomis Sayles.
According to agency CEO and founder John Metzger, “With the convergence of private and public companies in capital markets, coupled with the failure of current investor relations models to adequately serve pre- and post-IPO companies on a broad range of critical issues, the time has come for investor relations services to bring greater value to customers.
“The Metzger Capital Strategies Group sets a new standard in applying communications strategy to the long-term financial and corporate goals of all our clients, both public and private.”
According to Metzger, most IR firms are called in immediately prior to transactions, after other advisors such as investment bankers have already defined the company in the minds of investors. But he believes private companies need financial communications assistance.
“We live in a new era where building value is not just a stop-gap measure, but starts at the inception, whether you are a private start-up, pre-IPO or post-IPO company,” says Kumar. “Traditional IR firms engage clients in the throes of an IPO, then charge ongoing fees for simple, tactical services. With private companies being compared to publicly traded counterparts—and now beholden to more sophisticated investors—all corporate executives must consider exit and growth strategies much earlier in the process for the sake of shareholder return and their own personal wealth development.”
The capital strategies group will work with clients from start-up, helping them with their business model validation, competitive messaging and positioning, and corporate governance issues.
Says Kumar, “We recently went to a roadshow for a company that has 10 people on its board of directors. They included the CEO, the CEO’s brother, the CEO’s aunt, and at least one other relative. That is the kind of thing that is going to raise issues of corporate governance with investors, no matter what the size of the company. That’s something companies need help with.”
The new group “brings objective third-party consultation to CEOs and CFOs seeking long-term value,” as opposed to short-term transactional-based performance.
The ability to interact at the C-level of the organization is another factor in the creation of the new group. In addition to counseling firms on IR issues, Metzger believes the new group will position his firm to provide a broader range of corporate and product positioning services, while demonstrating that public relations has a real impact on the bottom line valuation of the company.