Why Investors Are (Unintentionally) Gaslighting Small and Mid-Cap Companies, and What This Means for Shareholder Targeting
All right, dear IR warriors, let's get real for a moment.
Remember the "good old days" – not so long ago, really – when organizing a roadshow felt like running a well-oiled machine? You'd send out those invites for management to provide an update, and even though it was always a hustle, you usually got responses, got meetings, and kept the engagement going.
Well, if you're like me, you've noticed that something has changed. Lately, it feels like we're sending out invitations into a black hole. Those follow-up calls are going unanswered, emails are getting ghosted, and the once-reliable network for securing meetings feels… well, a lot less reliable. Especially if you're at a small or mid-cap company, it can feel like you're constantly trying to get someone's attention, only to be met with silence. It's frustrating, right? And honestly, it can feel a bit like we're being gaslighted – questioning if our story isn't compelling enough, or if we're doing something wrong.
But let me tell you, it's not you, and it's (mostly) not them being deliberately rude. There are some powerful forces at play that have fundamentally reshaped how investors approach meetings, particularly with smaller companies.
The Post-MiFID II & Pandemic Hangover: A Perfect Storm
The current dilemma we're facing didn't just appear out of nowhere. It's the culmination of two seismic shifts that have fundamentally changed the landscape for buy-side investors:
MiFID II's Unintended Consequences (The "Research Unbundling" Effect): Before MiFID II came into force in Europe in 2018, fund managers often received sell-side research as a "free" perk when executing trades through brokers. This research often included access to corporate management meetings and roadshows. Under MiFID II, research had to be explicitly paid for, either by the asset manager or by the client. And what happened? Asset managers slashed their research budgets. They became hyper-selective about what research they paid for and hence, whose meetings they attended. The Impact: Suddenly, sell-side analysts had less incentive (or budget) to push smaller, less liquid names for meetings. If a broker wasn't receiving trading commissions from a particular fund, why would they spend resources to organize a meeting for a company that might not generate revenue for them? This directly impacted small and mid-cap companies who often relied more heavily on sell-side support for meeting access. The number of gatekeepers multiplied, and the gates became narrower. The Pandemic's Digital "Efficiency" Trap: When the world shut down, we all switched to virtual meetings. And while it saved us a ton on travel costs, it also brought with it a new habit: extreme efficiency. Fund managers realized that they could hold 10 virtual meetings in a day instead of 3 face-to-face meetings. The bar for an in-person meeting skyrocketed. Even for virtual meetings, the sheer volume of requests now landing in their inboxes became overwhelming. The Impact: With no travel friction, every company, big or small, could pitch for a virtual meeting. Investors became even more selective. Their time is still limited, and now they prioritize ruthlessly. If your company isn't instantly recognizable, highly liquid, or directly in their sweet spot, getting on their calendar is a monumental task. The "easy invite" became the "ignored email."
3. The Accelerated Pace of Digital Information Consumption: Since the pandemic, digitalization has skyrocketed, and with it, our collective consumption habits have completely changed. We're all drowning in information, and our attention spans are shorter than ever. Think about it: we're constantly scrolling, scanning, and absorbing content at an astounding rate. We barely have time to read a long article like this one – we'd much rather watch a quick video, consume an infographic, or get straight to the solution. This hyper-efficient, visually driven information diet has also penetrated the professional world, including the way investors consume company updates. If the information is not presented in an immediate, easily digestible and compelling way, it gets lost in the noise.
What's Really Happening Behind the Silence (From Their Side of the Desk)
From my perspective, after countless conversations with buy-side contacts, this is what's largely going on:
Information Overload is Real: Imagine their inbox. Hundreds of research reports, company updates, market commentaries, and meeting requests every single day. They can’t process it all. Their brains are designed for quick processing, not a deep dive into every single email. Prioritization is Brutal: Their job is to generate alpha. They prioritize meetings with companies that are either: Already significant holdings. Very large, liquid names where a small move can generate big returns. Hyper-growth, disruptive stories that are a perfect fit for a particular fund mandate. Companies where they have an immediate, actionable investment thesis. The "Discovery" Burden Shifted: Before, some discovery of smaller names was done in part through sell-side introductions. Now, funds rely more on internal quantitative screening, AI tools (ironically!), and their own direct, often digital, research. If you don’t show up on their screens or in their very narrow search criteria, you're invisible. No Obligation (or Budget) for Exploration: With unbundled research, there's no inherent financial incentive for them to spend time on speculative or "getting to know you" meetings with companies that don't fit an immediate need. The cost of their time is now acutely felt. The "FOMO" Filter is Stronger for Giants: Fear of Missing Out (FOMO) is a powerful driver. But this FOMO applies mainly to the mega-caps, the household names, or the truly disruptive unicorns. It's less strong for a solid, high-performing mid-cap they haven't heard of.
Breaking the Silence: Out-of-the-Box Approaches for IROs
So, what can we do? We can't just click hitting "send" on those unanswered invitations. We need to adapt, innovate, and get creative. Forget the generic "build relationships" advice – we're already trying to do that! Here are some actionable, unconventional strategies I've been exploring and suggesting:
Hyper-Personalized, Value-Add Pre-Pitches (Before the Meeting Request): Forget the Mass Email: Don't send a meeting request in the first email. Instead, send a highly personalized email (and I mean highly) highlighting 1-2 specific points from your recent results or strategy that directly align with their published investment thesis or a recent report they've put out. The "Micro-Insight" Hook: "Knowing your focus on [specific industry trend/ESG factor], I thought you'd find this specific data point from our recent earnings particularly interesting: [cite specific, concise data point related to their interest]. I'm happy to provide more context if this aligns with your current research." No Ask (Yet): Don't ask for a meeting in the first email. Just offer value. If they respond, then you can gently suggest a brief update call (not a full meeting). The goal is to build curiosity and show you've done your homework on them. Leverage Niche Platforms & Data Aggregators: Beyond Bloomberg/Refinitiv: While essential, don't rely solely on the big terminals. Explore smaller, specialized data platforms, ESG data providers, or industry-specific forums where your company's story might resonate more deeply. Some quant funds use very specific alternative data sources; can you get your data onto those? Reverse Engineer Research: Find out which smaller research houses are getting read by your target investors (even if paid for). Can you get your story on their radar? This could involve a small budget for sponsored research if your company allows. The "Expert Network" Approach (Strategically): Targeted Outreach to Sector-Specific Experts: Instead of going broad, identify a handful of highly respected independent sector analysts or consultants who are known to advise institutional investors. Can you get them to understand your story? A recommendation from a trusted sector expert can sometimes open doors faster than a direct approach. This isn't easy, but a good relationship here can be invaluable. Consider Paid Consultations (Ethically): In some cases, management might consider doing a paid consultation for an expert network that an investor subscribes to. This can put you on an investor's radar via a trusted, third-party channel, allowing them to "buy" access to your management's insights without having to commit to a full roadshow meeting. This requires careful consideration of the ethical implications and disclosure. Content Marketing with a Twist: Becoming a Thought Leader (Beyond Earnings): Deep Dive Thematic Reports: Instead of just earnings slides, publish short, easily digestible, thematic whitepapers or reports on industry trends where your company has a unique advantage. Share these on LinkedIn, your IR website, and through targeted emails. Mini-Webinars on Specific Topics: Offer short (15-20 min) webinars on a very niche topic related to your company's innovation or market position, rather than a full corporate overview. "A Deep Dive into Our Proprietary Widget Tech," not "Q3 Earnings Overview." This lowers the time commitment barrier for investors and positions you as a thought leader. Collaborate on Industry Insights: Partner with a relevant industry association or academic institution to co-publish an analysis that features your company's data or insights (ethically and compliantly, of course). This puts your name in front of investors through a credible, non-promotional channel. Leverage Your Existing Shareholder Base (and Their Networks): "Ambassador" Program: Encourage your happy, long-term shareholders to subtly (and compliantly) mention your company to their network if they believe it's a good fit. This isn't about direct lobbying, but about organic word-of-mouth within trusted circles. Ask for Introductions (Carefully): For your most supportive shareholders, a very rare and carefully considered request for an introduction to a specific, highly targeted new investor might work. This must be done with extreme care to avoid putting them in an awkward position.
The Bottom Line: Adapt or Be Invisible
The days of simply sending out invitations and expecting a full calendar are largely over for many of us, especially in the small and mid-cap space. Investors are not "gaslighting" us maliciously; they are simply responding to a changed environment where time is an even more precious commodity and the incentives for broad exploration have diminished.
For us, as IR professionals, this means a significant shift. We need to be more strategic, more creative, and more targeted than ever before. It's about proving our value before we ask for that precious meeting. It's about becoming an indispensable source of specific, actionable insights, not just a one-stop-point for information. The challenge is real, but the opportunity for innovative IR professionals to truly differentiate themselves is immense.
Let's embrace it, experiment, and find those new pathways to engagement. Share and comment your creative new ways of engaging with your investors and new targets.
Best, Muge
Your fellow IR Enthusiast!
Currently serving as the Director of Investor Relations and Sustainability at Galata Wind Enerji (GWIND.IS), Yücel brings a wealth of experience to the role, having begun her investor relations career in 2008 at Dogus Otomotiv (DOAS.IS). Her expertise in proactive strategies utilizing digital technology and AI, particularly in shareholder targeting, is instrumental in communicating Galata Wind's growth story. Traded on the Istanbul Stock Exchange, Galata Wind operates wind and solar farms in Turkey and is strategically expanding into Europe, targeting a capacity of over 1000 MW by 2030.
Yücel has recently published "The Investor Relations Playbook - Achieving Sustainable Success", a hands-on guidebook on investor relations operations with templates, checklists and how-to guides. The book is available in print in Turkish and in digital form in English.