Julia Stoetzel is the founder of Junicorn, an Investor Relations consultancy based in Germany, and host of the podcast Street Tweets. We first met Julia when she was Investor Relations director at DeliveryHero, and then 3 years later when she headed Investor Relations at About You, a Germany ecommerce company, during its IPO in 2021.
With Julia, we discuss her experience in Investor Relations, the importance of having an IR strategy during the IPO process, how to understand which investors you want to have on your shareholder registry from day one, and what makes a good Investor Relations hire.
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Disclaimer: this discussion is not financial advice, nor an investment recommendation, nor a solicitation to buy or sell any financial instruments, or an offer for financial services or any other transaction. The information contained in the recording have no contractual value and are destined for an informational purpose only. Amundsen Investment Management and the participants on this podcast may have holdings in the companies being discussed.
[0:25] Per Einar Ellefsen: Today we discuss the role of investor relations with Julia Stoetzel, the co-founder of Unicorn, an IR consultancy and also a fellow podcast host. We first met with Julia when she was in investor relations at Delivery Hero and then three years later when she headed the investor relations team at About You during the IPO process. Today we’ll talk about the role of investor relations starting during the IPO process.
[1:03] Per Einar Ellefsen: In this podcast we have not yet covered a vast topic of who the public investors participating in IPOs are and how companies’ shareholder bases evolve over time. We plan to have several guests working in investor relations to share their experience with public investors across a variety of industries. Julia is our first guest today at Amundsen. We think that having an IR early in the IPO process is extremely important, as the IPO process is ultimately an investor relations exercise.
[1:27] Per Einar Ellefsen: Your objective as a newly listed company is to build a diversified base of investors in which some may invest at IPO, but others will follow the company and decide to invest later as they see you delivering on your business plan. With Julia, we discuss her experience as an IR, the importance of having an investor relations strategy during the IPO process and beyond, how to understand which investors you want to have on your shareholder registry from day one, and what makes a good investor relations hire.
[2:18] Gautier Rousseau: Great to have you, Julia. We’re really looking forward to having you on the show. We actually met during the IPO of About You back in spring ’21. At the time you were head of Investor Relations. For those who don’t know About You, it’s a German online retailer based in Hamburg. At the time they were generating a billion euros of revenue, and I think they’re about to print 2 billion this year—clearly a fast-growth story. And before that you also had another German IPO, Delivery Hero.
[2:49] Gautier Rousseau: I don’t think we met, but you were there. That was back in 2018.
[2:54] Julia Stoetzel: I think we actually met after. I think we had a couple of meetings after. But yeah, I think I know you.
[2:58] Gautier Rousseau: Already for quite some time after the IPO. Not during the IPO, but you’re right, that was back in 2018—already six years.
[3:04] Per Einar Ellefsen: Right.
[3:04] Gautier Rousseau: So it’s a long time ago now. And since then you have started your own consultancy firm as well, giving advice to private companies for their investor relations setup, right? Correct.
[3:14] Julia Stoetzel: Yeah. First of all, thank you so much for having me here on the show. I’m super thrilled to be actually on the other side of the mic as well. Yeah, correct. So I did Investor Relations for Delivery Hero and for About You, and now I have a consultancy that is advising, amongst other things, on IPOs and listings—how to get started, specifically for digital business models, which I feel very much at home with, as you can see from my past experience.
[3:37] Gautier Rousseau: And in terms of the IPOs experience—so I mentioned About You, I mentioned Delivery Hero—can you remind everyone how much experience you have with IPOs, directly or indirectly?
[3:47] Julia Stoetzel: Yeah, so I’ve done a couple. First of all, at Delivery Hero, as you said, I joined after the IPO, so it was more like the setup work that I did after the IPO—what it actually means to be listed. But I would still say that this was somewhat part of the IPO experience because it was still very much early stage. There was not really a foundation of IR that we could go back on.
[4:06] Julia Stoetzel: And then later at About You, it was actually doing the IPO process before the company was public. So that was also super interesting for me to see both parts of that same coin. And then since now with Unicorn, I’ve advised two companies more in the SPAC space—Tonies and also Marley Spoon—also on their IR setup. So Marley Spoon, for example, recently, or this year, got relisted in Frankfurt. It’s a meal kit provider, a competitor to HelloFresh.
[4:32] Julia Stoetzel: And so they relisted in Frankfurt, and we did that process from that perspective. So I have already a couple, but as you can see, it’s usually digital business models, which I feel very much at home with.
[4:42] Gautier Rousseau: Okay, so it’s fair to say you have had long experience interacting with more tech companies in the digital world, right?
[4:48] Julia Stoetzel: Exactly. Yeah. I mean, back in 2018 when I came to Delivery Hero, I fell into that tech space. I did not have any tech experience before. I also didn’t have equity experience before. In fact, I’ve worked for now almost 15 years in capital markets, but my prior experience in capital markets was actually more debt-heavy when I was working at Morgan Stanley, and I wanted to move to Berlin. And you know, in Berlin you have a lot of tech companies.
[5:09] Julia Stoetzel: And so this is my route to how I got into the tech space. And yeah, my experience really has manifested further into that space.
[5:17] Gautier Rousseau: Okay, perfect. There’s one topic I would like to start going straight into and digging into: the nature of investors participating in IPOs. As investor relations, you’re supposed to manage those interactions with public investors. How different are the nature of investors with whom you’re interacting during the IPO versus after the IPO? If you can share some color on that.
[5:39] Julia Stoetzel: Yeah, absolutely. So you mean like during or even before the IPO?
[5:42] Gautier Rousseau: Well, actually it’s a good question. You could start before the IPO. I guess a question I’m keen to address here is how different IPO investors are versus the post-IPO investors.
[5:53] Julia Stoetzel: Yeah. So in general I think private investors before the IPO I would consider as much more long-term focused, because it’s the nature of private-market investing. A lot of them don’t make it, and you have to have this very long vision to even get them through to become an IPO company at one point. But there I didn’t have too much interaction. At About You, obviously there were some pre-IPO investors involved that had already been in the company for very long—
[6:16] Julia Stoetzel: investors that really knew the management very well and the equity story well, because they joined the company very, very early on. And then during the IPO, I would also say that most investors want to invest for strategic reasons and with a long-term horizon. But you obviously also have investors—specifically then post-IPO—that are more of a short-term horizon. So they maybe only want to invest for the next quarter, or they expect the next quarter to be specifically well.
[6:42] Julia Stoetzel: So I would say before and after IPO there can be more investors that also have a shorter horizon in terms of investing—not only hedge funds, but also investors that potentially just want to trade in and out of the stock. And because once a company is listed it has to report on a quarterly basis—which is not the case before—there’s also much more disclosure, and you can make decisions on a much more short-term horizon.
[7:02] Julia Stoetzel: Other than that, I would say that if an investor is invested during the IPO, and if you’re going through this whole process, it’s a very long process—there’s a lot of meetings, a lot of in-depth questions. An investor really needs to get very comfortable around the story, the management, the legal matters, today even ESG matters, in order to pull the trigger to get invested. And I would say that after IPO, DDs maybe are not as thorough as during an IPO.
[7:32] Julia Stoetzel: I think it’s because usually there’s more risk associated with an IPO. I mean, it’s a very fragile environment that you have with markets potentially being volatile on the day, so there are large positions exposed. So it felt like DDs were much more thorough than if you’re investing later. And also that is because later you already have a track record. You have certain reporting; you have already proven that you can deliver on certain guidances.
[7:57] Julia Stoetzel: So there’s much more trust in the market once a company is listed.
[8:00] Gautier Rousseau: Makes sense. At the end of the day, the level of information you have at the time of the IPO should be quite exhaustive, right? You have a prospectus, you have access to the management. But I guess the level of risk you’re taking into a new company coming to the market, unknown to public investors, is higher. So you have different types of investor profiles and risk appetite.
[8:20] Julia Stoetzel: Exactly.
[8:21] Gautier Rousseau: But do you think then—because IPOs are actually a unique opportunity to build a shareholder base, and that’s probably the only one you ever have as a public company to decide which shareholders you want at day one—do you think that actually matters for you as an IR, as a company, to decide on those investors you want day one? Or, as you say, over time the shareholder base will change and day one doesn’t really matter?
[8:43] Julia Stoetzel: I think every opportunity matters. So if you do want to steer the company in a certain direction—for example, you want to have more strategic investors on board, more long-term investors on board; you want to have maybe a certain part of liquidity as well; in short, maybe you need to have a bit more hedge funds—right? Everyone is always talking about hedge funds, but they actually do have a role as well in capital markets.
[9:02] Julia Stoetzel: Maybe if you say down the line we are expanding more to the US and we want to have more of a geographical footprint in the US also with our investor base, I think it’s good to make those strategic decisions during the time of the IPO and also actively reach out to them through the banks that are covering you or through the IPO advisor that’s covering you. But this doesn’t end there. It doesn’t mean that after the IPO you are completely subject to whatever happens in the markets.
[9:26] Julia Stoetzel: I think you can still steer and influence whatever’s happening to your stock through investor targeting, for example, through specifically addressing certain investors, through going to specific conferences. So only because this is a snapshot at the point of IPO and this is your cap table then—or your shareholder base—this is a dynamic process. And I think as the company’s business model is evolving, as maybe management is changing, as investors are perceiving you differently, this can still change. And I think that’s also the beauty of it.
[9:52] Julia Stoetzel: But I would definitely take it at the point of IPO as an opportunity to really try to influence that as well. And it’s also a lot about signaling. Once you’re public, people can see your shareholder register. So it’s also about who you have on—like, is it a very big name? I don’t know, like a BlackRock or… It also shows a little bit of sophistication and trust that you give to the market
[10:15] Julia Stoetzel: if very big names that a lot of people know are invested in your stock as well.
[10:20] Gautier Rousseau: Yeah, definitely. Probably helps you to look more institutionalized as well.
[10:23] Julia Stoetzel: Yeah.
[10:24] Gautier Rousseau: You say hedge funds as if it was a bad word. What do you mean by that? You need hedge funds, and they play an important role. What is this role?
[10:31] Julia Stoetzel: I mean, I have a feeling that from the company perspective, managements don’t really maybe like hedge funds sometimes, because they tend to trade in and out. And usually companies do want to have a more stable shareholder base because obviously you don’t want investors necessarily to trade out because then the stock will go down. But I really think, especially in this day and age, we see almost a liquidity crunch in some stocks, and there’s almost no trading happening. There’s no liquidity in stocks.
[10:56] Julia Stoetzel: And I think this is an equally important part, if not even more important than just having a high stock price—that the stock is actually liquid and that there’s actually something happening, because otherwise you may as well be a private company. And so I think having a certain proportion of certain investor types—only having hedge funds is obviously also very risky because then there’s maybe too much liquidity—
[11:15] Julia Stoetzel: but having a good mix of different geographies, different risk appetites, different types of investors is very helpful to keep that good balance and not be too dependent on one investor or one region. For example, also speaking geographically, if there are a lot of US investors and there’s a crisis in the US for whatever reason, and maybe a lot of investors need to sell their positions, then you’re having that bulk risk attached to your shareholder register.
[11:43] Gautier Rousseau: I think those are very good comments. And to be fair, the shareholder base will change over time and you don’t attract the same investors in the early days versus later. As a company delivers and builds a track record, you will get other types of investors and probably long-term investors. It’s difficult to get those investors day one when you don’t have yet that track. And in the meantime you need liquidity because there’s nothing worse for a new company than to lack that liquidity.
[12:08] Gautier Rousseau: Suddenly you become unknown, no one likes you, people can’t buy, can’t sell, and valuation looks lower and lower every day. So I think it’s very important indeed to come aware that you need to get liquidity in the early days.
[12:21] Julia Stoetzel: Yeah, absolutely.
[12:22] Gautier Rousseau: But did you get a chance actually to get involved in the allocations yourself, as an IR—head of IR at the time for About You? Again, you joined before the IPO, you were involved in the IPO process, you met all those investors during the IPO process. Did you have a say in the allocation or were you asked for advice here?
[12:40] Julia Stoetzel: Yes, indeed I was. So just to give a bit of background on how the IPO team was structured: we had an IPO advisor who was coordinating all the banks, the PR advisor, the management, the internal resources and so on. Then we had the banks that were introducing us to investors, setting up the meetings and being in charge of the investor piece of that whole process. But I find it very important that the company is not just a passive participant in this process.
[13:08] Julia Stoetzel: Even if you have all of these advisors, I think you need to have—and that’s my recommendation to companies—someone who’s representing your interests, because everyone in that equation sometimes has their own interests at heart as well. And it’s a bit risky to just rely on external opinions. So I think it was very helpful that I had already worked for a public company and in fact it was a similar sector; it was tech, e-commerce, if you will. So we knew each other.
[13:32] Julia Stoetzel: There were a lot of investors that I already knew. So I could reliably say, I think this is a good investor; they’re not going to trade out immediately after the IPO. Or it’s maybe an investor that is well regarded. So there was this element that I already knew some of the past investors and how they would behave. But also, coming back to the question—what kind of shareholder register do you want?—
[13:54] Julia Stoetzel: and just really thinking about that. Who do you want to have on your register? And do you trust that they’re not necessarily immediately trading out of the stock? Because that’s also quite unpleasant. Of course for an investor, it could be quite attractive to maybe make a 20% return on one day. But that’s also quite unpleasant because if the stock goes down on day one of trading, it’s bad signaling and it just looks really poor.
[14:17] Julia Stoetzel: And sometimes—not necessarily all banks—but sometimes banks also have different interests, and they’re not necessarily accompanying you anymore on the journey once you’re listed. Once the IPO is done, a big part of the work is done, and then you’re left with whatever is happening once you’re listed.
[14:34] Julia Stoetzel: And I think you need to put in measures to prevent being completely passive and unable to do anything about it, and rather try and get advice from people that have already done it.
[14:44] Gautier Rousseau: It sounds very logical to have the company involved around those allocations and deciding which investors you think you should have day one, and keeping this balance, as you said, to make sure your interests are also protected, because everyone might have different interests around the process and which investors to allocate. But although it’s quite logical, it’s not systematic that companies come with an IR at the time of their listing. It always feels like it’s a question for CFOs and CEOs: when should I start embarking in IR? Where should I have the budget for it?
[15:15] Gautier Rousseau: And clearly we think it makes more sense to hire an IR before the IPO because these IR professionals actually know the investors and can be more accountable for the equity story being sold to the market. What are you telling those private companies? How should private companies think about the timing of an IR and what is important to take into account? What would be the right advice here?
[15:35] Julia Stoetzel: I absolutely agree with you. I think companies should have an IR in place already in the process—the whole IPO process—like early-look meetings. I actually joined the company in February of the year when we IPO’ed in June. So that was a good three to four months before we actually went public, and I think that was very helpful. It was really the point in time when we started with early-look meetings, we started with the roadshow, the management roadshow, preparing the equity story.
[16:01] Julia Stoetzel: It was very helpful for me because once we were listed I was already fully up to speed. I knew all of the investors that we were talking to. I knew the equity story very well. So I could already start having meetings by myself and I was not really depending on management continuously to join meetings with me.
[16:16] Julia Stoetzel: So I think having that in place is very helpful, and it’s risky not to have it, because what a lot of companies underestimate is that once you’re listed, this is just the starting point of what’s going to happen.
[16:29] Julia Stoetzel: As management or as a CFO, you don’t want to be the only person who can represent a company externally because then you have reporting sets happening, you have a lot of regulatory things coming towards you, and if you miss some of them—even one—this can get not only embarrassing and not instill a lot of trust in the company, but also it can be very expensive.
[16:52] Julia Stoetzel: So having a team to back up a CFO, for example, is very crucial and you should not wait for that until you actually list.
[17:00] Gautier Rousseau: And so four months before the IPO, what are typically the pre-IPO tasks for an IR?
[17:05] Julia Stoetzel: Once we had the kickoff with all of the banks—once the official process was started—I was mainly involved in building the equity story, coordinating with banks on the slide deck, giving my input from the investor point of view, then joining all of the investor meetings, coordinating some of them.
[17:23] Julia Stoetzel: I was really the middleperson between mostly the banks and management—either to coordinate meetings, to join meetings, to amend the equity story and then give it back to the banks who were leading on that work piece. I was also the middleperson for the lawyers a lot of times, making sure that whatever we say in the equity story in the presentation also matches what’s in the prospectus.
[17:48] Julia Stoetzel: That was obviously in conjunction with the legal team, but also having review and checkups and a feedback loop on the prospectus as well, because all of these documents need to link up and make sense together. What else… Then a big piece was also a bit more operational: preparing everything that you need to have once you’re listed—
[18:06] Julia Stoetzel: for example, an IR homepage, setting that up in a way that shows all of the information that you need but also makes it appealing—especially for a company that is very digital and very young, like About You. We wanted to make it look that way and not just, “here are all your information—look and search for them,” but structured and nice. Then also hiring a team, obviously.
[18:28] Julia Stoetzel: I hired a whole team before the IPO because I knew from experience that there would be a lot of work coming my way once we were public. You cannot wait to hire people once you’re public because then there will be a delay of maybe three to six months until these people are actually joining. I knew that this would get quite busy and I could very much struggle, and I didn’t want that. So that was another piece.
[18:51] Julia Stoetzel: And then I was also coordinating a bit on the press side. We obviously had a PR agency involved, but also here making sure that the ITF, or setting the price range, and these more technical press releases are correct and that they match again what we said in the equity story and in the prospectus. And then one very last piece of the pre-IPO/IPO process was organizing the opening-bell event. Back then it was a full-blown coronavirus period.
[19:15] Julia Stoetzel: So there was not actually the physical opening bell in the Deutsche Börse stock exchange, but we replicated one with the security measures that were in place at the time—masks, distancing, limited people that could come in, and so on. That was also a very interesting experience because we invited a lot of press and bankers and even influencers that would make this whole event a bit viral. They would post this on social media, and organizing and coordinating that was also part of the work that I did before.
[19:41] Julia Stoetzel: That coordination was also part of my work.
[19:45] Gautier Rousseau: Okay, so there’s a lot of things to do. Sounds very intense as a process. You say that you attend investor meetings—those are the meetings before the public launch or early looks or testing-the-water meetings, but also during the IPO roadshow, right? I’m a bit curious because you’ve seen a lot of investors—different types, different nationalities, some probably generalists, some experts, different levels of sophistication.
[20:07] Julia Stoetzel: Right.
[20:08] Gautier Rousseau: Any meetings you can remember, or any points where you can remember, “Okay, this is a very smart investor—they’re coming very prepared, they have those types of questions,” versus someone a bit more high level and general? Anything you can share with us where you realized these are very different types of investors—more sophisticated versus more generalist and passive investors? Anything that strikes you during the IPO process?
[20:30] Julia Stoetzel: Yeah, it’s a good question. I think if an investor is coming in prepared—it’s not just about the company telling their story, but sometimes investors are actually coming really prepared, depending on what part of the process we are. Once the prospectus is public, if someone is really interested in a company, I would expect that they have read parts of the prospectus already, at least read through the presentations and ask questions that go beyond the obvious.
[20:52] Julia Stoetzel: There you can see if someone is really putting in the time. Because if someone puts in the time, they’re more likely to be an active investor as opposed to someone who’s just like, “Okay, I think the basic business model is interesting, but I’m not digging in so deep.”
[21:04] Julia Stoetzel: So that’s one thing—you can see if someone’s asking more basic questions or if someone really goes beyond what is already public. Then one thing I found quite striking—and I think that’s something companies should have on their mind as well—is some investors, not many, but some, really take the DD to the next level. That means they are referring to a podcast that management has given five years ago: “You said this and this—can you elaborate?”
[21:28] Julia Stoetzel: So know, as a company, what is out there in terms of media—not just press, not just what’s on your homepage, but also what’s on social media, what’s on digital media. And some investors would even order. This obviously applies to B2C products, but they’re testing your services, so make sure that that is also up to speed. For example, with food delivery—
[21:52] Julia Stoetzel: if you say you deliver in 30 minutes and it delivers in 40 minutes, the investor might ask, “Okay, that service is not great—how would you expect to keep your clients? What’s the retention?” They are trying to grab onto every piece of information that is out there. That was surprising to me—using a product even if it’s not available in that market.
[22:09] Julia Stoetzel: We had a couple of investors in the US that wanted to try the app and we were not available in the US. They would even go as far as going through the app store and pretending to be a European customer and then downloading it to test it, and some even would order stuff to their home. So really try to keep that in mind and be prepared to answer those questions.
[22:31] Gautier Rousseau: Yeah, some investors are doing proper due diligence, and you should expect that. And that makes sense—it’s quite reassuring. Anyway, post-IPO, the company becomes public, then suddenly you have to do quarterly reporting and updates. You communicate to the investors, but you also communicate to the sell side—analysts at banks and brokers who are covering the company and issuing sell-side reports quite frequently. So this is also a new audience for you, right?
[22:55] Gautier Rousseau: Coming from the private world, what are the differences between those interactions you have with sell-side analysts versus investors in terms of the nature of the questions or the frequency of interaction? If you can share some color on that.
[23:07] Julia Stoetzel: I would say that analysts are obviously experts—really deeply. They know a lot because they’re covering not only you; they cover your competitors. They know everything. If there’s any piece of news flow, they probably sometimes know before a company—which should not be the case—but they really know everything about the sector. And they’re very curious and very deep into the numbers. Here you should really be prepared to dig into the second digit of your revenue growth and profitability—
[23:38] Julia Stoetzel: and cohorts. They really want to understand, because the way they’re building up the models is through that. They’re going through the business model and trying to rebuild that business model with certain assumptions in numbers. They’re taking the cohorts, saying, “Oh, this is the retention; these are the metrics,”
[23:53] Julia Stoetzel: and then building revenue out of this, then assuming certain costs, building the EBITDA out of this, and so on. Investors might not go as deeply and as in-depth into the numbers. Some do, but I find that they’re more trying to make sense of it from a business perspective, from a bigger trend perspective. Maybe they’re saying, “I think online fashion is the next big thing—
[24:14] Julia Stoetzel: the switch from offline to online is a really big growth lever that the company has,” or “ESG is a trend and you’re into a sustainable business model.” I feel investors more try to make sense of it. Of course numbers are also involved, and when they’re challenging on numbers, you should answer that. But I feel analysts are much more in the details and trying to make sense of it from a numbers perspective.
[24:40] Julia Stoetzel: Having said that, an analyst is obviously a very important catalyst. One analyst is covering multiple investors and they are very much in touch. So if an analyst, especially from a well-regarded research house, puts out a recommendation—ideally a Buy—and has a higher price target than your actual stock price, this has a very big lever on your stock price. A lot of investors will not do that in-depth work; they will just follow that recommendation.
[25:06] Julia Stoetzel: So having good relationships with analysts, being very responsive, knowing your business model really well, knowing your numbers really well—it’s also about how you’re perceived on a call. Are you a CFO or an IR who’s like, “Let me just double-check; I need to look into the numbers,” or do you know them off the top of your head? This also gives the impression that you are on top of your numbers, that you can immediately explain them to everyone.
[25:27] Julia Stoetzel: And this plays a role, I would say. So having a good relationship with analysts is very important—maybe even more important than with investors, unless it’s a very big investor. If it’s a strategic investor, they will also call you frequently or in between results, maybe because they saw a news piece. But I would say investors are a bit more on the general picture. That was my impression.
[25:53] Gautier Rousseau: I guess what you’re saying is a lot of interaction with investors at the time of the IPO, initially, to build that shareholder base and get demand around the IPO. But post-IPO, it’s very important to work closely with those analysts who will be the ambassadors of your stock and your equity story. Sometimes you might not like the comments they make or how they interpret the numbers, but they have a voice and they will be listened to. And this is where it’s up for the jury to decide.
[26:19] Gautier Rousseau: Knowing those considerations—and everything you said—sounds like an IR has to be someone who understands numbers. How would you go after hiring an IR? What is the right profile? What makes a good IR and what would be the good profile?
[26:44] Julia Stoetzel: I think that’s the interesting part about IR and why I really like the role. Yes, numbers are important. I came from capital markets where I was really number-crunching. I worked at KPMG where I was doing models up and down, and I found it a bit too boring. That’s why I moved into IR—because there’s also a different piece to it. It’s also the storytelling piece; it’s also the marketing piece, if you will.
[27:05] Julia Stoetzel: But you also have to be a good salesperson. At the end of the day you have a legal piece to it as well; you have a strategic piece to it. It has to be someone who’s comfortable with all of these different aspects. You cannot be someone who’s like, “Ah, legal, regulatory things—I really don’t care about them; I just want to sell.” You’re going to end up in trouble for sure if you are just a good salesperson but you don’t know your numbers. Maybe you’ll catch some investors with that attitude, but the ones that dig deep you will lose. So it has to be someone who’s comfortable with all of the above. You have to be someone who’s very flexible and capable of dealing with different environments. You have to be very fast-paced, able to answer very quickly.
[27:45] Julia Stoetzel: You cannot be like, “I’m going to answer this investor tomorrow or in a week.” Timing is really of the essence; when analysts have questions, they’re not going to wait around for one week—otherwise they’re going to get the information somewhere else if not from you. So being generally curious about your sector, being curious about capital markets, wanting to deliver good service to your stakeholders—analysts, investors, management, maybe rating agencies if you have those as well—
[28:14] Julia Stoetzel: really wanting to deliver good service to them, quickly, in good quality—and they will reward you for that. I feel the easier you make it for an analyst and investors to understand your equity story, the more beneficial it will be for you, because they’re not making assumptions that might be wrong.
[28:32] Julia Stoetzel: For example, when at About You we released figures, we also added a fact sheet and an Excel sheet so investors don’t have to go into a PDF and copy out the numbers—which is really annoying because then they have to copy this into their model. They could just download the Excel sheet and copy them into their model. It saves them time; they can release the reports quicker with fewer mistakes, and it benefits everyone. So really having the service mindset is very important.
[29:00] Julia Stoetzel: I don’t know if that answers your question, but in terms of background, I’m a big fan of the idea that you don’t have to have a math degree or a finance degree. It helps as an interest point, but as I said, it’s someone who’s curious and willing to learn as well. The company is developing and you should also be willing to develop with the company.
[29:23] Gautier Rousseau: That’s very clear. And where do you think that role should be? Should IR report to the CFO then, or to the head of communications? Obviously there are a lot of numbers and the KPIs investors are looking for will be numbers that the CFO will have to validate. But as well, any piece of information you’re going to put on your website and communicate externally will be read by investors, and they will interpret that information from a business perspective.
[29:48] Gautier Rousseau: So I guess IR also must have a look and a say or an ability to filter this communication out into the market.
[29:55] Julia Stoetzel: I would definitely say the role should be located below the CFO, and it’s very important that there’s not someone else in between. I’ve seen that as well; it doesn’t really work that well. There has to be a way that a head of IR can really escalate if something goes wrong. Again, time is of the essence.
[30:11] Julia Stoetzel: And if you have to report to someone else whose priority is not IR—but the CFO’s priority is definitely IR, because essentially the stock price is kind of the lifeline of the company—having direct access to C-level is super relevant. And I also would say it’s still more in the finance sphere as opposed to the communications sphere. Having this report to a head of PR, I don’t think it’s the right way.
[30:32] Julia Stoetzel: Maybe the head of PR can tell the story well from a storytelling perspective, but they usually don’t have a lot of idea about the numbers and cannot challenge or answer questions that analysts are sending. I would definitely recommend to put it directly under the CFO. That’s also the usual thing that I see. Very rarely I see this differently. Sometimes I see it under the marketing department, which I find a bit strange. It also shows a bit how the company is viewing IR.
[30:57] Julia Stoetzel: I still unfortunately see sometimes that IR is not getting the respect or importance within a company that it deserves and should get. It’s a very important role. And if you put it, for example, under the marketing department, I don’t see that as the right place in the company.
[31:15] Gautier Rousseau: Actually, I’ve never seen that, but I guess that would be a surprise to me as well.
[31:18] Julia Stoetzel: What do you think?
[31:19] Gautier Rousseau: Beyond the obvious, what can a company do to raise its awareness to investors during or after the IPO? What are good things to do—outside the box?
[31:29] Julia Stoetzel: That’s also something that I try to challenge—a bit of the current status of investor relations—through the usage of digital tools. Of course, you need to do all of the basics. This is the foundation: you need to do your reporting, conferences, go on roadshows, fireside chats. All of this is the basic that everyone is doing. But with Unicorn I’m trying to answer the question: what can you do beyond that?
[31:53] Julia Stoetzel: This can be done before, during, or after IPO—having a digital footprint of your equity story to reach retail but also institutional investors, to make them aware of you. For example, on podcasts like this—a lot of people are listening to podcasts these days—and maybe one investor will find your equity story just because they listened to a podcast, or saw a post of you, or saw a video on YouTube—
[32:20] Julia Stoetzel: of the CFO or the CEO talking about the equity story. You have to go wherever people are spending time. And people these days—whether institutional or retail—are not spending time reading newspapers. Some do; it’s part of the job. But when you think of your own way you spend time, it’s on the phone.
[32:38] Julia Stoetzel: If you can get into people’s minds—if they saw you on a LinkedIn post or a YouTube video—I think this is something investor relations should do much more of, obviously within the realm of what’s possible within regulatory frameworks. That could be a real competitive edge. Some companies are already starting to do that and that’s very exciting.
[33:00] Gautier Rousseau: It’s a good point. I myself listen a lot to podcasts and like to track founders and CEOs on the net—podcasts and interviews, maybe three, four, five years old—talking about the businesses and the industries, and also listening to competitors talking about those competitors as well. You get a lot of information, and it’s very interesting; then you get to meet them, you feel you already know quite a bit, and you have a very interesting discussion. There’s a lot available and more and more. It’s a very powerful tool.
[33:28] Gautier Rousseau: Another thing where I guess there’s still a work in progress: all this noise around ESG disclosure, EU taxonomy kicking off in Europe as well. To me it really feels sometimes that this is more a tick-the-box exercise for IR and companies when it comes to answering questions from investors or the market on ESG. But it’s increasingly an important consideration, even integrated into some scorings and mandate constraints for some investors. If the ESG score is not high enough, they won’t be able to participate in IPOs, for example.
[34:03] Gautier Rousseau: So it is more and more a key factor for investment decisions. Do you think IR teams are capturing that consideration properly today? And what could be done differently, if anything?
[34:16] Julia Stoetzel: Yeah, it’s a good question. I agree with you. It’s something that companies are addressing in the equity story—IPO or not. What I see now is that there’s usually at least one slide in the slide deck covering ESG, and it should hopefully be a bit more in a 100-page slide deck.
[34:30] Gautier Rousseau: And everyone is outstanding, trust me. Everyone has the best ESG disclosure and track record. Everyone is outstanding on that front.
[34:38] Julia Stoetzel: Yeah. I hope it’s more than just one page in a 100-page slide deck. It’s a bit of signaling—how much do I value this? But then again, I still have the feeling that a lot of investors don’t invest because it’s a great ESG story. No one will invest because you’re doing ESG so great. People will invest because you’re not messing up on the ESG part. I think it’s a hygiene factor.
[35:00] Julia Stoetzel: Your equity story needs to be on point and the numbers need to make sense and there must be an investment case. An investor is not a charity. They want to make money as well. But at the same time, I think it becomes more and more relevant and could be a showstopper.
[35:13] Gautier Rousseau: Exactly.
[35:14] Julia Stoetzel: So it felt more like a hygiene thing that needs to be checked, and if everything is all right on that, then they can move ahead. That’s how I felt about it. So I think it’s important to know your numbers there, to show that you’re improving, that you are taking this seriously. I think the worst thing you can do is not mention it at all, not take it seriously. That is really bad signaling.
[35:34] Gautier Rousseau: A low-hanging fruit is to start working on your sustainability report before the IPO. I guess that’s something IR can also lead internally. Yeah, we’re getting to the end of the interview. Julia, any fun facts or memories you can share with us about the IPO process you’ve been through?
[35:54] Julia Stoetzel: I mean, there were many sleepless nights. But what I found very striking is that I’ve never done an IPO before coronavirus. Before, you had to travel around the world and send management to all of these countries, which is also not great from an ESG perspective—but that is a side note. It was really the first time that IPOs were done in a completely digital space, and it was perfectly fine.
[36:19] Julia Stoetzel: In fact, it was quicker and more effective than if you were to travel. The truth is probably for the future somewhere in the middle. It’s also important to meet an investor; it builds a certain connection. In a lot of chats, whether you like someone or not is not only what you’re saying but also how you’re behaving. Sometimes it’s this little extra thing that doesn’t come across in just telling the equity story.
[36:42] Julia Stoetzel: So it’s sometimes very interpersonal things, and that gets lost in a completely digital space. But that was quite interesting—to do an IPO completely digitally had never been done before as well. Before coronavirus, we didn’t have to. Even doing the opening bell completely digital—that was a very great experience. I don’t want to miss that one. It was super exciting.
[37:03] Gautier Rousseau: And what would be the next one? What companies would you love to see IPO—be involved in the IPO process? If you could choose today, what would be the dream private companies to list?
[37:12] Julia Stoetzel: If I had a dream client for Unicorn, I think I would love to— I mean, I don’t know. The bigger the better, right? I think a Klarna or something would be great if there will be something. Other than that, my own company—who knows, maybe Unicorn is going to IPO one day.
[37:30] Gautier Rousseau: Okay, well, you like challenges because Klarna—it’s a great company, very large. I’m sure there will be a lot of investors looking at it, so it will be quite intense if that happens.
[37:39] Julia Stoetzel: Probably, yeah.
[37:40] Gautier Rousseau: All right, listen, thank you very much, Julia. It was a great discussion. Thank you for your input and for sharing your experience with us today. All the best.
[37:48] Julia Stoetzel: Thank you so much for having me. It was great.
[37:52] Per Einar Ellefsen: Thank you for listening to IPO Stories. In future episodes, we’ll host CEOs, CFOs, advisors, and other participants in the IPO process to learn from their experience. If you like the show, please follow us on Spotify or Apple Podcasts and share the show with people around you. If you have questions about the IPO process that you would like us to address with future guests, please get in touch at contact@ipostories.com.
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