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At JPM, I was a part of hundreds IPO meetings (from “hot” ones like SNAP & TWLO to smaller, not highly publicized transactions). There’s been a lot of talk about the death of the IPO roadshow. Makes a great headline, but not all IPOs are created equal, & deal dynamics vary A LOT.
1. IPO roadshows meetings for “hot” deals (sought after IPOs that have significantly more demand than shares available) can be done virtually IF the investors are either already privately invested in the company &/or have relationships with mgmt (the meeting is more of formality)
2. The people who benefit from in person on “hot deals” are investors w/o a pre-existing relationship with mgmt. These investors NEED the oppy to convince mgmt to allocate them shares. Easier to build a connection in person so these investors will fight to keep from going virtual
3. For less well known deals, that are not oversubscribed right off the bat, the power dynamic shifts to the other side. The company is often using the roadshow to meet investors & convince them to invest in the deal. Again, easier to convince ppl do do something in person.
4. In both cases, the meeting can play a significant role in shifting the deal dynamics for at least one side of the table. I've seen "favor" meetings turn into large investments and smaller allocations on hot deals turn into large ones post the IPO meeting.
5. Is the meeting the only reason? No. But the power of face-to-face connections means certain meetings are more effective in person, and whoever is feeling most powerless WILL push to make an in-person meeting happen.
6. Especially since the majority of IPOs are not “hot”, the in-person roadshow meeting is critical for both mgmt and investors. So while the death of the roadshow might make a great headline, I don’t think they’re going completely virtual anytime soon (in a post-COVID world).
