Roadshow: How it Shapes a Successful IPO

Key takeaways
* A roadshow is a marketing tour during the IPO process where company executives and underwriters present to institutional investors.
* Presentations typically include financials, growth strategy, competitive positioning, and management Q&A.
* Roadshows help underwriters gauge demand, inform IPO pricing through book building, and build investor relationships — but they require significant executive time and preparation.

What is a roadshow?
A roadshow is a series of presentations, meetings, and Q&A sessions conducted by a company’s management and its underwriters for prospective institutional investors ahead of an initial public offering (IPO). Meetings may be in person or virtual and are governed by securities regulations that limit what can be presented and how forward-looking information is disclosed.

Role in the IPO process
After a company files an S-1 registration with the Securities and Exchange Commission (SEC), underwriters organize a roadshow to:
* Showcase the company’s business model, financial results, and strategic plans.
* Let institutional investors evaluate management and ask detailed questions.
* Collect indications of interest that feed into the book-building process, which helps determine the IPO price and share allocation.

How a roadshow works
* Timing and format: Roadshows typically span several days to a few weeks. They take place in financial centers (e.g., New York, San Francisco, London) and increasingly via webcast.
* Presentation content: Slides and materials cover historical financial performance, growth prospects, market positioning, competitive advantages, and leadership backgrounds. Compliance teams review all materials for regulatory adherence.
* Audience: Most sessions are aimed at qualified institutional buyers (QIBs) and large asset managers, hedge funds, and pension funds.
* Book building: Underwriters gather investor feedback and orders to assess demand and price sensitivity. That information shapes the final offering price and allocation.

Types of roadshows
* Traditional pre-IPO roadshow: Directly tied to an upcoming offering to generate demand and set pricing.
* Non-deal roadshow (NDR): Management meets investors without a current offering to provide updates, maintain relationships, and lay groundwork for future capital raises.

Advantages and disadvantages
Pros
* Builds credibility and trust by allowing investors to meet management directly.
* Generates momentum and market awareness ahead of the IPO.
* Provides real-time feedback to inform pricing and allocation decisions.

Cons
* Time- and resource-intensive for executives and management.
* A weak roadshow can dampen investor interest and hurt pricing.
* Travel and preparation can distract from day-to-day operations.

Example: Uber (2019)
In 2019, Uber conducted a two-week roadshow across U.S. and European financial centers to pitch its growth story to institutional investors. Despite strong interest, investor concerns about ongoing losses and competition tempered demand, contributing to a conservative IPO price of $45 per share.

Bottom line
Roadshows are a critical, regulated component of the IPO process. When executed well, they align expectations between the company and investors, help underwriters set an appropriate offering price, and can materially influence the success of a public debut. Poorly planned or delivered roadshows, however, risk weakening investor confidence and negatively affecting pricing.

Sources
* U.S. Securities and Exchange Commission — guidance on going public and registration statements
* Cravath, Swaine & Moore LLP — practical guidance on roadshows
* Reporting on the 2019 Uber IPO (major news outlets and company filings)