Waccal cites transparency as key for private companies going public
SEATTLE, Aug. 13, 2019 /PRNewswire/ — Private companies like Airbnb and Palantir have been criticized for being vague and non-transparent about their upcoming IPOs, yet they have won investor confidence who are willing to dump millions of dollars the day of their IPO. How do businesses like them that start off in a garage become investor sweethearts? Waccal discovers that the core of their business success is investor relations and it did not happen overnight.
The definition of successful private company investor relations as demonstrated by the action of successful companies like Slack is: transparency.
The biggest risk for investors is the information asymmetry, meaning the information that the founders have but are not sharing with investors. This increases the investor’s risk and results in a higher cost of capital for the company raising capital. Successful companies have mastered the art of transparent communication and their cost of capital has decreased over the years. This means less dilution for current investors and more capital at higher valuation for the company. It allows companies like WeWork to raise billions in funding without losing control of their company and they leverage their capital to outpace any competitor.
Waccal’s CEO, Ashfaq Mohammed, also noted that investor relations is not only for the investors. «When companies are transparent in their strategy, employees understand how their work aligns to the goals and it increases employee confidence in their leadership.» Since Waccal’s launch in 2016, a lot of companies on their platform have created an Investor Relations page as early as family and friends funding round. Companies are using the platform to keep their investors and employees up to date with the latest information. Before investors fund these companies, they add them to their watchlist so they can gage the company’s communication and interaction before they fully commit. «Nothing is worse for an investor than to give a company millions of dollars and then have to chase them down for an update. They are using Waccal to reduce their risk.»
Waccal is the new standard for managing investor relations for private companies. Businesses of every stage, from new startups to mature companies use Waccal’s suite of tools to provide transparency, close information asymmetry gaps, and reduce the risk for investors. Waccal enables businesses and investors to perform their fiduciary duty with a high degree of candor and consistency.
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