A few weeks ago I wrote a post on why companies need to get out and meet with investors. So today’s post continues that theme, and concentrates on perception – how you present yourself to investors is even more important than being there in the first place.
In a paper written by Elizabeth Blankespoor, Assistant Professor of Accounting at Stanford; Bradley E. Hendricks, Assistant Professor of Accounting at University of North Carolina at Chapel Hill; and Greg Miller, Professor of Accounting at University of Michigan, they looked into how investor perceptions of management influence a firm’s valuation.
They developed a composite measure of investor perception using 30-second content-filtered video clips of IPO roadshow presentations. They show that this measure, designed to capture viewers’ overall perceptions of a CEO, is positively associated with pricing at all stages of the IPO (proposed price, offer price and end of first day of trading). The result is robust to controls for traditional determinants of firm value. They also show that firms with highly perceived management are more likely to be matched to high-quality underwriters. In further exploratory analyses, they find the impact is greater for firms with more uncertain language in their written Registration Statement. Taken together, their results provide evidence that investors’ instinctive perceptions of management are incorporated into their assessments of firm value.
If you’re not a natural performer, then there is good news. In 2012, Social Psychologist Amy Cuddy wrote a paper for Harvard Business School, entitled The Benefit of Power Posing Before a High-Stakes Social Evaluation. The experiment tested whether changing one‘s nonverbal behavior prior to a high-stakes social evaluation could improve performance in the evaluated task. The result of the experiment was that high power posers performed better and were more likely to be chosen for hire, and this relationship was mediated only by presentation quality, not speech quality. She then went on to present this in one the highest viewed TED talks (currently 40,476,019 views), which I have linked to below.
In short, however nervous you are, you can trick yourself into being a confident presenter.
“I never could make a good impromptu speech without several hours to prepare it”