Importance of Investor Relations for a Small Biotech Company

While biotech companies often make developing a well thought out investor relations campaign an essential part of their business model, it is also vital for them to understand the real importance of a properly planned IR/PR campaign. With proper planning and guidance, a biotech company's good PR and IR can play a positive role in its success as a public company.

Why is Investor relations important?

A source of regular funding

Most biotech companies are constantly searching for funding. Maintaining a well-planned investor relations campaign brings the company one step closer to having readily available capital to fund current and future projects

Attracting new investors

Regularly seeking to improve Investor relations publicizes the zeal and energy your biotech company is putting into developing its assets. This ultimately attracts more potential investors. When investors witness a company's active involvement with its shareholders, these investors tend to favor the company with a more open line of communication over their competitors who are lacking in this area.

To avoid investor abandonment

Many small biotech companies abandon their early staged product ideas overtime. This sometimes shows the lack of proper investor relations management. Although there are various factors behind why biotech companies lose faith in certain ventures, insufficient funding or weak investor support are one of the most common reasons. As most biotech companies are not financially self-sufficient in their early stages, the only way to get their product to market is through investor support. Thus, maintaining investor relations becomes crucial in such circumstances.

To build a bond of trust with investors

Building a relationship of trust with investors is one of the most important aspects biotechs should be focusing on. Stringent government regulation in conjunction with relatively sophisticated business models and technical processes are several key factors that cause biotech companies to appear unattractive to certain investors. However, through senior management backed investor relations campaigns and by properly conveying their message to current and potential shareholders, their company will be better positioned over its competitors.