How to Build Effective Investor Targeting and Outreach Strategies for Small-Mid-Cap Companies

The small-mid-cap landscape has transformed dramatically in recent years, presenting unique challenges for companies seeking to reduce stock volatility, build meaningful investor relationships, and drive sustainable growth. We asked Jonathan Paterson, founder and managing partner of Harbor Access Investor Relations, to share his insights on building effective targeting and outreach strategies that deliver results. Jonathan brings three decades of buy-side, sell-side, and consultative experience to help companies navigate these complexities.

Objective based strategies for effective investor outreach and targeting

Before launching any investor outreach campaign, companies need a clear strategy grounded in specific objectives. Jonathan emphasizes that each company has unique IR goals that evolve over time, whether that involves increasing liquidity, attracting retail investors, or engaging specific institutional investors. The foundation of success lies in defining these objectives from the outset.

"Regardless of your goal, establishing your objectives from the beginning is key before any targeting. You should start with your targeting objectives before any outreach should begin."

This strategic approach ensures that every outreach effort aligns with broader company goals and targets the right investor profiles. Without this foundation, companies risk wasting resources on ineffective campaigns that fail to move the needle on their investor base composition or trading dynamics.

Common objectives in investor outreach

Companies typically pursue several common objectives when developing their investor outreach strategies. Many organizations seek investors with different investment styles, particularly when their current shareholder base skews toward high-turnover investors and they want to attract more long-term holders. Geographic diversification also represents a frequent goal, as companies work to broaden their investor base beyond concentrated regions.

For companies refreshing their IR programs, increasing institutional ownership often tops the priority list. This challenge proves especially acute for companies that entered the market via SPAC transactions, which typically lack substantial institutional investor bases. Building this foundation requires targeted efforts to identify and engage institutions whose investment mandates align with the company's profile and sector.

Targeting hedge funds and family offices

Jonathan highlights the importance of targeting hedge funds and family offices when companies need to increase liquidity and trading volume. These investors actively seek investment opportunities in specific industries and sectors. This approach requires turning to active investors rather than passive ones, as active managers make deliberate allocation decisions that can drive meaningful changes in a company's shareholder composition.

However, Jonathan notes a critical consideration when targeting these investors: understanding their typical position sizes and how long it takes them to build positions given a company's trading volume. A family office that typically takes a $2 million position needs adequate time and liquidity to establish that stake without moving the market.

Importance of clear communication in investor relations

Even the most sophisticated targeting strategy falls short without clear, compelling communication. Jonathan employs a simple litmus test: if a CEO struggles to explain what the company does in a single sentence, investor meetings will not succeed. This clarity forms the bedrock of effective investor relations, enabling management teams to articulate their value proposition quickly and memorably.

"One of the litmus tests of effective communication is to ask a CEO, 'what does your company do?' If they struggle to answer in one sentence, it's not going to make a successful meeting with an investor."

Establishing a strong IR program before beginning outreach ensures that management can effectively communicate the company's story, positioning the organization for productive investor conversations that lead to meaningful relationships.

Creating an initial targeting list

When creating targeting lists for small-mid-cap companies, Jonathan's team considers several key factors. They examine assets under management, turnover rates, peer investments, and sector preferences. Their knowledge from meeting with investors throughout the U.S. and Canada informs their understanding of which investors have greater appetites for smaller-cap companies.

Many family offices and hedge funds actively seek smaller-cap opportunities because these companies can appreciate more quickly, enabling investors to chase performance and manage their fee structures effectively. Jonathan's team analyzes holdings patterns, sector switches, and cash position changes to identify the most promising targeting opportunities.

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Incorporating existing data into investor engagement strategies

Data from previous interactions proves invaluable when developing targeting strategies. Jonathan stresses the importance of understanding who is likely to take a meeting and tracking all interactions systematically. When an investor declines a meeting because they are busy with earnings season rather than expressing disinterest in the company's sector or market cap, that information becomes critical for future outreach.

"The key to successful IR is being organized. It’s taking note of what wasn't a flat out rejection."

Maintaining a disciplined approach to database management ensures that every team member can access interaction histories and follow up appropriately. Jonathan emphasizes that negative responses can prove just as valuable as positive ones when properly tracked and analyzed. He also recommends following through on commitments made during meetings, such as providing requested sales numbers or additional information, builds credibility and strengthens relationships over time.

Improving investor email response rates

When it comes to response rates, Jonathan provides realistic expectations by sharing a typical sample of 10 investors in an outreach campaign: On a first email to 10 investors, companies might receive two responses declining interest, two out-of-office replies, and two expressions of interest, with the remainder not responding at all. However, persistent follow-up significantly improves these numbers. By the second email, response rates improve, and by the third attempt, companies typically achieve interaction rates around 80 percent. 

Jonathan recommends keeping a keen eye on your responses to ensure you can respond immediately:

"Investors have a very short attention span. They say, yeah, sure. I'll take a meeting. When is it available? You should be ready to go with two or three different times."

This reality underscores the importance of being prepared to close the deal when an investor expresses interest. Jonathan keeps a notepad with available meeting times during roadshows, allowing him to immediately provide options and secure commitments before investor attention shifts elsewhere.

The role of social media in investor relations

Jonathan admits he was initially skeptical about social media's role in investor relations but has become a convert. He recognizes its place in an overall IR strategy, provided companies maintain consistency and avoid the common pitfall of starting strong but losing momentum after a few weeks.

He references a survey that revealed that approximately 81 percent of investors have made investment decisions based on information initially sourced from digital or social media platforms. This statistic underscores social media's power as a gateway driving traffic to company websites. However, this makes it equally important to ensure that websites remain current, avoiding the common mistake of leaving outdated presentations or information on investor pages.

Jonathan recommends establishing a consistent cadence of posting, reposting, liking, commenting, and tagging industry experts. LinkedIn and X (formerly Twitter) represent the most effective platforms for professional investor relations efforts.

While direct data linking social media to targeting success remains limited, Jonathan has observed investors referencing social media posts during meetings or reaching out after seeing content that resonates with their investment focus. This interaction helps fine-tune targeting efforts by revealing which types of investors are engaging with the company's content.

"Social media is definitely building awareness, and then it confirms that what you're doing is right when you get comments from investors in meetings, or when you have investors reaching out to you saying, 'Hey, I just saw your latest post'."

Regarding concerns about social media being too promotional, Jonathan acknowledges the "promo trap" where companies enthusiastically post strong quarterly results but avoid posting when numbers disappoint. His view is straightforward: anything posted by a publicly traded company must comply with the same rules and regulations that govern press releases, websites, and investor presentations. Professional IR teams have become much more self-regulated, ensuring compliance with fair disclosure requirements and avoiding promotional or misleading content.

Crafting the perfect investor outreach email

When crafting outreach emails, personalization matters, especially for priority targets. Jonathan recommends referencing previous interactions, such as meetings at conferences, to create connection and context. Offering virtual calls rather than insisting on in-person meetings can increase response rates, as investors appreciate flexibility.

The ideal email introduces the company to investors who have not met the team before while explaining why a meeting matters now. Jonathan structures his emails around what is happening (such as a non-deal roadshow), who the company is, and why the investor should take a meeting. He includes fundamental information like market cap, ticker symbols, event dates, and participating management team members.

"It's about having  a clear, concise answer to what's happening? Who are you? Why should that person take a meeting?"

Providing a reason to meet, such as a recently signed contract or new partnership, creates a call to action that motivates investor engagement. Jonathan emphasizes flexibility between virtual and in-person formats, noting that a 30 to 40-minute virtual call with a new investor can prove incredibly valuable even if it does not fill a roadshow schedule with back-to-back in-person meetings.

Regarding outreach cadence, Jonathan avoids prescriptive rules. Companies can experience periods of intense news flow with new deals, partnerships, and contracts, warranting more frequent contact, but they may also experience quieter periods. During quieter periods, opportunistic outreach makes sense when industry developments create relevant conversation opportunities. He recalls a CFA event where a Boston portfolio manager reported that his voicemail filled by 8:00 a.m. with broker and IRO calls, suggesting that timing and frequency require thoughtful consideration rather than rigid schedules.

"I would be opportunistic in terms of creating that cadence or that frequency. If something has happened within your industry that you have something of value to share, then I would reach out."

The key remains being organized so that when opportunities arise, companies have their target lists ready with previous interaction information accessible for reference.

Final Thoughts

Effective investor targeting and outreach for small-mid-cap companies requires strategic planning, clear communication, organized execution, and persistent follow-up. By setting clear objectives, understanding their target investors, maintaining disciplined data management, leveraging social media thoughtfully, and crafting compelling outreach messages, companies can build the institutional relationships that drive long-term success. Jonathan's insights remind us that while no magic formula guarantees instant results, a systematic approach grounded in relationship-building and opportunistic engagement creates the foundation for meaningful investor connections.

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