“Most senior executives entered the corporate world in a very different era, and they now face a business landscape very different than they once knew,” writes Paul Argenti in his book, Digital Strategies for Powerful Corporate Communications.
Investor relations is one of the many areas where this rings particularly true. Traditional models of investor relations have been challenged both by major changes in technology and by changes in the economy that have led to an increased necessity to prove value to investors and offer increased transparency.
Pros and Cons of Digital Investor Relations
Whereas meetings with potential investors were once largely done in person (or perhaps over the phone), today much of the crucial information sharing is done online. This offers businesses both significant advantages and severe disadvantages.
The single biggest disadvantage is that, when done poorly, digital information sharing can create security vulnerabilities. However, when done well, it makes it easy to track investor interest, entertain multiple investors and provide a centrally-organized information source that streamlines and accelerates the process of communicating with investors.
A Case Study: Improving Investor Relations with a VDR
As an example of effective investor communications management, Julie Schoenfeld, CEO of Perfect Market, chose to use SecureDocs to manage investor relations while raising funding. She found the audit logs feature provided critical insight that helped her gain the funding she needed. “SecureDocs allowed us to know what investors were looking at, how long they were looking at it and it really helped us understand their interest,” said Schoenfeld.
In addition to offering insight into investor interest, virtual data rooms like SecureDocs can help improve investor relations by offering both the necessary security and the easy-to-use sharing features that are critical when seeking funding.
Highly encrypted files and multi-authentication ensure only approved users can view sensitive data, and the secure web portal allows for investors to conveniently access data from their own office or phone on their own schedule. In this way, companies can have the best of both worlds: top-notch security and the benefits of digital communication.