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How to Tell a Powerful Equity Story (Step-by-Step)

How to Tell a Powerful Equity Story (Step-by-Step)

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Once you go public, your equity story could be one of the factors that make or break your investor relations. But how do you make the story compelling enough to encourage investors to add you to their portfolio? Read this article to find out what an equity story is, how to develop an effective one and who needs to tell it.

Today, this task is much more precise and data-led than ever before, with more than 50% of issuers enhancing their targeting efforts through the use of online investor relations tools. 

Table of content

What is an Equity Story?
Why Is Your Equity Story Important?
How to Create a Powerful Equity Story
Who Tells the Equity Story?
Key Documents Relying on the Equity Story
Investor Perception Insights to Prepare You for 2023
References and Further Reading

What is an Equity Story?

To put it simply, your company’s equity story is a combination of all the compelling reasons why investors should buy your stock. It is a document that should position the issuer as an attractive investment, detailing:

  • The past successes and milestones of the issuer
  • The issuer’s core competencies and what separates them from the market
  • The existing shareholding structure (financing rounds) and the financing track-record
  • The outlook and corporate strategy for the medium to long term 

It should also include information about your business model, the licences and patents you hold, the qualities of your management team, and information on the market.

Why Is Your Equity Story Important? 

Investors are always on the lookout for “alpha” investments because their primary goal is to ensure the clients’ equity portfolios are outperforming their benchmarks. While this has traditionally meant examining financial KPIs, more and more investors are actively tracking and analysing non-financial information. This is there is heightened interest in non-material indicators such as ESG performance and the equity story itself.

When you take the time to prepare this document with great care and attention, this is a sign to investors that your company is focused on providing maximum value and transparency, instead of rushing things. McKinsey calls the equity story “the most important thread that must run through all the exit materials.”

The equity story reflects the company’s positioning on the market, which, in turn, influences equity value and share prices. From the investors’ point of view, being able to differentiate your company from its competitors provides clarity over why they should choose you. At the same time, bankers and financial analysts rely on the issuer’s equity story to advise on its public market valuation.

By listing your past achievements, your equity story can provide reassurance and excitement about your company’s future performance. For example, if you make a secondary offering and you can inform investors that your dividend payments have remained stable or increased year-on-year, that is a very attractive proposition.

The equity story also outlines your company’s strategy, helping investors gauge the results they can expect to achieve if they choose to make this investment. By laying out your position and intentions, investors can easily see whether you are a good fit for their strategy, which is also a concern for them. 

Finally, the equity story can influence the stakeholders within your company, as well. It can help align your positioning and messaging both internally and externally, making your business vision clearer for employees and your value proposition more attractive to potential shareholders. From recruiting and retaining top talent to shareholder engagement, the equity story can have a large impact on your entire business.

How to Create a Powerful Equity Story

Here are the steps you need to take to create your own powerful equity story.

Step 1: Share your financial and operational track record

An issuer should never forget that investors are listening to hundreds of other equity stories a year. So, it’s best to begin your argument with this in mind and present the equity story as if the person is likely to know very little about your company, your track record and financial details. 

You should bring them up to speed with your company's history and the bearing that has on your current financial results. When embedding this information in your equity story, it’s best to describe the business structure in detail and then provide financial information for each segment. This creates clarity and makes your business performance easier to evaluate, especially for companies with complex business models and organisational structures.

Step 2: Include details on the addressable market

Before buying stock, investors buy a market. They are looking for promising industries and issuers with high business and market growth potential. That’s why you should first think about the phase of your industry’s life cycle — is it a growing industry, a mature one, etc. Then, provide details on your addressable market, as well as reassurance that management knows which market trends to leverage to achieve and maintain dominance in the field. This is particularly important for innovative industries where the landscape changes fast and there is very little financial information available for investors to analyse.

Step 3: Share your strategy

Your prospective shareholders will want to know the answers to all questions that directly impact their investment. Sharing your company’s strategy gives you an opportunity to delve deep into how you will leverage market trends to provide a consistent growth output. The investor wants to see that the structure of the issuer is suitable for hitting the ground running and expanding after the investment decision.

It is also worth including information on how your strategy may adjust over the short to medium term. Do you expect to grow immediately or is that more for the long term? Will you do so organically or by making acquisitions according to your business plan? Will you pay dividends or will you reinvest the cash into the business?

Step 4: Reflect the competitive environment

Remember that investor relations are an ongoing process of shareholder engagement where you need to step into the shoes of your investors and think like them. Potential shareholders will expect the issuer to demonstrate thorough knowledge about the competitive environment, threats and opportunities, industry evolution and peer performance. 

However, keep in mind that peer comparisons should be aligned with and calibrated to the circumstances of your target investors. If they are based in Europe, they will be able to visualise more easily your position compared with other European issuers than they would compared with a rival in South America that happens to share a similar structure. Don’t just pick the comparisons that make your investment case seem more impressive, rather stay within the investors’ frames of reference to keep them engaged. 

Step 5: Know when and how to provide company guidance 

A lot of listed companies wonder if they should provide an annual (or midterm) guidance to the market. This may inflate your stock prices in the short term but, if you fail to meet your targets, trust in your company will erode, bringing more challenges in the long term. 

If you do provide forward earnings guidance, set objectives you know you can achieve so you can build loyalty with your shareholder base by consistently overdelivering on your targets. If you don’t provide solid reasoning behind your goals, your equity story might have the opposite effect — driving investors away, instead of attracting them.  

When you’re wondering whether you should issue company guidance, it’s best to take into account analysts’ coverage. Generally speaking, if you have a small number of sell-side analysts covering your company, it may be a good idea to disclose your financial objectives. On the other end of the spectrum, a large number of sell-side analysts involved means there is a well-established consensus estimate. This is essentially “forcing” your company to deliver the expected performance and to communicate transparently if its internal targets are deviating too much from the consensus.

If you do decide to provide guidance, the equity story is your opportunity to inform investors which metrics you present on a regular basis. The KPIs and forward multiples will depend on the sector in which you work, so research is the key to providing the financial projections and metrics most relevant to your target investors. 

These details also help analysts compare you with your competition in the market, which can provide confidence in the future prospects of your organisation. 

Step 6: Feature Your Top Talent

Another element that provides reassurance to investors is knowing that you have the talent to guide you through the presented strategy. Management credibility and directorial experience of leading a team through the process and in the same industry is advantageous and you should document this in your equity story. 

Step 7: Study expectations and monitor your credibility

Creating a powerful equity story is not a one-time project. Rather, it’s ongoing work as you should improve your story continuously and tailor it to market demands and investor expectations. 

This is where a perception study — an independent third-party evaluation of investor sentiment, can deliver critical insights and help improve your equity story. 

When executed well, a perception study enables you to answer long-term strategic questions such as:

“Are we communicating our priorities clearly to investors?”

“How is the industry changing and how should the evolution of our business model be presented?”

“Is our investment proposition truly compelling?”

The reason why a perception study can help you effectively answer these and many other key questions is that it’s done by an unbiased party. Besides, it will typically reach out to a larger audience — the investors and analysts that fit your ideal profile but are not engaged with your company for unknown reasons. 

Armed with such insight, you can improve your positioning and key messaging, ultimately creating an equity story that will be relevant not just today but also in the future.

Who Tells the Equity Story? 

It is important that management tells the equity story as it is their job to deliver on the promises. It is tempting to over-promise in order to achieve the best possible price for your company’s stock, but you risk consistently underwhelming investors when it becomes obvious the targets are not achievable. 

This is why the IRO would work closely with the management team to put out an impressive and powerful, but ultimately achievable, equity story consistent with market expectations and with the reputation of the company. They should think about how their statements will stand up in a few years when shareholders will decide whether to remain invested or move on.

Key Documents Relying on the Equity Story


Connection to the Equity Story

Analyst Presentation

Investment analysts at the syndicate of banks drill into the detail of the equity story to assess the case for investment. This is not applicable to the US. In the UK, you also find unconnected financial analysts who have no relation to the syndicate performing the same task.  

Roadshow Presentation

It emphasises the key takeaways of the equity story to entice an audience. It must be succinct but still get across the important points you want to make to persuade investors to buy stock in a face-to-face situation. 

Long-Form Report

In the UK, an auditor provides a long-form report for the issuer and the bank acting as sponsor. The equity story acts as the base for its analysis of the company's history, performance, structure, assets and cash flow of the issuer, among other key areas. 

All of these documents must match the equity story and each other in terms of details. Any inconsistency could harm your chances of winning a shareholder.

Investor Perception Insights to Prepare You for 2023

Before you go on your annual roadshow, it’s crucial to understand the trends in investor perception, especially following the disruptive 2020 marked by the COVID-19 pandemic and the markets evolution in 2022 folowing geopolitical & inflation crisis. As the world hopefully begins to emerge from uncertainty in 2023, knowing what investors are concerned about is essential to a successful earning season. To help you plan your capital market strategy for 2023

Download this guide to learn how an investor perception study can help >>



Your equity story must be accurate, informative, persuasive and even entertaining. As a document, it forms the basis of a lot of other assets that investors and analysts examine. For them, the equity story turns your business from an abstract concept into a concrete offering that the investor wants to own a part of. Creating a powerful equity story can boost your market valuation, build rapport with potential shareholders and ensure smooth investor relations.

References and Further Reading 


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