What is an equity story and why is it so important?

For any investor, the equity story is the starting point for the acquisition of a stake in a company’s stock. The equity story concept is about setting out the key elements that an investor will need to make an investment decision. Hence, it is important to clearly identify the reasons that inspire an investor to acquire a stake. The investors want to see the business model and its future prospects, the market growth and the company’s ability to generate revenue from its customer base, all tied into a powerful equity story.

Although there is no “standard format” for a successful equity story, being able to convince still relies on a certain number of key ingredients and knowledge. A good equity story turns a company into something you can grasp. It is about moulding different facts and elements into an interesting and attractive story.

Questions to be answered in the equity story:

  • Addressable markets and position
  • Growth and value drivers
  • Business model and strategy
  • Financials
  • Management’s experiences

“A common mistake is believing that the numbers speak for themselves. The equity story of a business goes beyond the financial data, it covers the business model and its potential to create value for the investors. This should be described in a trustworthy way and include a realistic assessment of the risks.”

Ingrid Östhols, Senior Advisor and Consultant, Safir Communication

Safir Communication’s top advices:

  • Keep it simple – The shorter and more explicit the story is, the better. It should be precise and not too complicated.
  • Use investor view – Stick to the plain essentials from the perspective of the investor, which is how and why you are going to make money out of the business.
  • Be condensed – Focus on a few main messages that are easy to remember. The story should be simple to tell and repeat.
  • Be consistent – A good equity story remains coherent and relatively unchanged over time. It should not need to be changed every quarter.

Safir Communication

Safir Communication is an advisory boutique focused on Investor Relations and Corporate Communication. We have the tools to support our customers to create value and reach their strategic targets through credible and professional communication. As a smaller business, we work close to our customers and have a long-term engagement to reassure top-quality performance. Together with selected and well-established partners, we support our customers in their communication work and positioning.