Good investor relationships are critical to company growth. However, establishing a rapport with shareholders is easier said than done. Under current models, many CEOs feel disconnected from their investor base – and a sea of third parties stand between them.
This lack of interaction is troubling many big brands. Tesla is one example; Elon Musk probably went about things the wrong way when he announced that he wanted to take Tesla private on Twitter, angering some investors. But his decision – however rash – demonstrates the frustration bosses feel with the traditional investment infrastructure.
It’s time to take direct action
Tesla isn’t the only major brand aggravated by current bureaucracy. When Spotify went public last April, it chose a direct listing to try and cut out the banks. Rumour has it that AirBnB and Slack are considering untraditional IPOs as well.
These global enterprises realise that the current system makes it difficult to establish a direct dialogue with investors, and the time has come to mend this missing connection.
Another organisation that has woken up to this reality is The Kraft Heinz Company. It hired former UBS analyst, Chris Jakubik, as VP of Investor Relations to nurture strong relationships – and Chris understands the value engagement in building brand value.
Out with the old, in with the new
With so many third parties involved under current systems, it is nearly impossible for enterprises to establish direct investor relationships. This is why companies like Own are approaching investment in a completely new way.
Big brands don’t just want investors; they want their shareholders to become customers. And as they engage investors become more loyal, this fuels their business advocacy.
Own is enabling companies to build stronger shareholder relationships by cutting the middlemen out of investment transactions. Our financial services tokenization technology is unlike anything that has gone before; assets are converted into digital tokens that can be traded directly and securely, using our purpose-build blockchain.
In addition, we’re giving enterprises the tools to closely manage their investor lifecycle. In 2018 we launched our Decentralised Share Register, which goes way beyond storing shareholder data online. Companies can analyse their investor base and segment marketing to approach chosen investors with targeted messaging. This can be coupled with our FAST Platform in order to issue exclusive offers to engaged shareholders, leveraging their value to raise more capital.
Our FAST Platform is a particularly valuable engagement tool for enterprises, as it enables them to build and manage entire investor relationships. After issuance, companies can run all their engagement activities through the portal – from enabling online shareholder voting, to sharing reports, corporate actions and making dividend payments.
The power of our platform lies in taking investor communications away from being formalised and infrequent – most shareholder interaction takes place in an AGM at the moment – and turns it into a fluid conversation. Investors are constantly being updated and involved in company decision-making, which makes them feel part of something valuable.
Making mobile moments
It’s not just the infrastructure that is weighted against companies, either. Many brands are failing to find the right channels to communicate with their investors; letters and emails are far from dynamic.
The most powerful medium for engaging shareholders is the device constantly in their hand: their smartphone. And Own has developed My Own Market, a mobile application that enables investors to manage their holdings on-the-move.
As well as giving companies a direct route to the device investors use most, My Own Market has a number of features that encourage interaction. For example, enterprises can enable digital voting on key resolutions, and monitor in real-time which investors have responded. You can find out more by reading our blog on technology and new voting opportunities.
They can also send messages to key investors, to start conversations with shareholders that are not engaging through legacy channels.
The investor/customer disconnect
One reason that mobile interaction is so important in the investor relationship is that it helps big brands connect with potential shareholders that are also part of their core customer demographic.
If you consider who companies like Tesla and Spotify are targeting, their ambassadors and advocates tend to be young, educated, trendy and ambitious. However, this demographic profile does not always match the average investor they are currently attracting. In fact, many Millennials are put off from investing in any companies because of current, outdated systems.
Conversely, many Millennials have experimented with cryptocurrency. Some may even have been burned by the lack of control and security the market offers. It’s up to big brands to show them alternative, more regulated and secure uses for blockchain technology, and connect with young investors that are – or could be – customers as well.
Out with the old, in with the new
The level of engagement big brands crave rarely happens in traditional markets. That’s why we’re part of the financial services revolution to find a better way forward that works for enterprises and investors alike.
As major corporations move away from restrictive infrastructures and embrace newer investment models, we will see the company/shareholder relationship take on new energy. Investors have a greater say in decision-making, which makes them much more committed to helping that brand grow.
Kraft’s Chris Jakubik concludes that “you should never assume that what’s worked in the past is appropriate for the present or future”. When it comes to investor relations, we couldn’t have said it better ourselves.
Visit our FAST Platform page to discover how Own is using tokenization to create direct capital raising opportunities between enterprises and investors.