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  3. One of the reasons why the overwhelming majority of shareholder activism campaigns are in small-cap companies is because there is a pretty substantive disconnect between what investors expect of board members, and what actually happens on a day-to-day basis in many boardrooms. This article aims to succinctly address some of the key issues that give rise to the friction.
  4. For both new and experienced small-cap officers and directors, the menu of potential financing structures can be somewhat intimidating. The purpose of this article is to explain the most common types of small-cap equity and equity-linked financings, and the high-level pros and cons of each.
  5. A recent piece in The Wall Street Journal eluded to a fascinating insight: “Companies appear to avoid hiring auditors that have a history of critical audits at other companies…” Every experienced investor knows that this phenomenon is not solely limited to auditing.
  6. Attention CEOs of small-cap companies who feel like corporate governance is a form-over-substance waste of time: those who run the largest companies in the world, and those who manage trillions of dollars vehemently disagree with you.
  7. Many small-cap companies view investor relations (IR) as a necessary evil, or simply a cost of being a public company. Consequently, they do a poor job of purchasing IR services, and cycle restlessly between different firms. But it doesn’t have to be this way, and it shouldn’t.
  8. Small-cap companies undertake a variety of measures – often under pressure from shorter-term investors or misinformed service providers – aimed at increasing share price sooner versus later. One of them is stock buy-backs. But more often than not, officers and directors of growth companies are taken aback when a buy-back not only has no impact on their stock price, but actually draws the ire of experienced investors.
  9. Considering that greater than 80 percent of shareholder activist campaigns each year are waged against small-cap companies, it is critical for small-caps to communicate clearly about the issues investors care most about. Notwithstanding the fact that annual proxy statements address many of those issues (e.g., board composition, compensation, etc.), too many small-cap boards outsource responsibility for drafting and refining proxies. That’s a big mistake.
  10. A non-deal roadshow, or NDR, is a series of investor meetings not associated with an active deal or active financings. Companies organize NDRs to update existing investors on corporate progress and introduce the company to prospective investors. by James Carbonara, Partner at Hayden IR
  11. Most small-cap companies start off their search for an investment bank on the wrong foot. Here’s a replicable, three-step process to choosing the right investment bank, every time.
  12. At-the-market offerings (ATMs) are unique financing mechanisms, because stock is sold intraday – without a fixed price – into the natural flow of trading. Unlike other financing mechanisms, ATMs provide issuers with a high degree of control over the timing, size, and price of each ATM sale.
  13. Small-cap companies raise $25-$40 billion every year in the equity capital markets, and every special situation fund manager that provides this growth capital would confide in private that most of the financings are needlessly dilutive.
  14. One of the least understood aspects of shepherding a small-cap company is garnering and maintaining sell-side equity research coverage. The goal of this piece is to clear up commonly-held misconceptions.
  15. As Small-Cap Institute, Inc. has discussed, there is widespread confusion among small-cap leaders on the subject of trading volume; i.e., where it actually comes from, where it doesn’t come from, and how to get more of it. One of the most insidious byproducts of this knowledge gap is the astronomical waste of time and money expended by small-cap companies targeting investors who are foreclosed from buying stock due to… illiquidity. The goal of this piece is to provide some buy-side “math” that will obviate such waste in the future.
  16. Small-Cap Institute’s Amanda Gerut interviews Axogen Corporation’s Karen Zaderej. Ms. Zaderej is chairman, CEO, and president of Axogen Corporation (NASDAQ:AXGN). Axogen (AXGN) is the leading company focused specifically on the science, development and commercialization of technologies for peripheral nerve regeneration and repair. Karen served as Chief Executive Officer and as a member of the Board of Directors of Axogen Corporation since May 2010 and as Chief Operating Officer from October 2007 to May 2010 and as Vice President of Marketing and Sales from May 2006 to October 2007.
  17. Small-cap officers and directors often understandably lack a thorough understanding of the “business” of sell-side equity research. Without an accurate rendering of the drivers and economics of the research business, it’s hard to have realistic expectations about garnering and retaining coverage. That said, the business model has seen some material changes, and what drives most research revenue today might surprise you. ...read the article here.
  18. Small-caps often contain directors who are new to the small-cap world, having spent their careers operating, governing, or advising large-cap companies. These board members, and their colleagues, are often surprised – and not in a good way – to learn that many small-cap investors don’t always view their large-cap experience in a positive light. ...read the article here.
  19. D&O insurance, the insurance that is designed to respond when directors and officers are sued by plaintiffs or regulators like the Securities and Exchange Commission, is important for small cap companies. ...read the article here.
  20. Cybersecurity is in the news daily due to high profile breaches at companies like Equifax, Marriott, Yahoo, and Sony. But despite endless media commentary and best practices memos from professional service firms, misinformation still reigns supreme inside the boardrooms of many small-cap companies. ...read the article here.
  21. Social media is a vexing landscape for senior executives. There can be material benefits, but also equally daunting risks. As is evident from the fact that many Fortune 500 leaders don’t partake, there are no right answers. For those small-cap CEOs who are so inclined, they should consider these 10 suggestions, offered through a buy-side lens. ...read the article here.
  22. While it is true that large cap companies are sued more frequently than small cap companies, directors of small cap companies are right to be thoughtful about the litigation risks they face. What follows is a round-up of current issues. ...read the article here.
  23. The overwhelming percentage of media coverage regarding cyber crime is on large-cap companies. While understandable, media focus distorts a reality that small-cap officers and directors are learning the hard way: small companies are often much more attractive targets to hackers than larger companies.
  24. What CEOs and boards do when an activist knocks at the door will differ depending on the types of activist investors we discussed in Parts 1 and 2 – Passive-to-Activist Institutional Investors, Activist Hedge Funds with Improvement Plans, and “By the Playbook” Activist Hedge Funds – because the strategies they employ differ and therefore the company’s response needs to adapt to the activists’ approach.
  25. The best advice for avoiding activism altogether is to have stellar operating performance coupled with stellar share growth, and never miss an earnings forecast. “For the remaining 99.99% of companies that don’t fit that description, let’s discuss the signs that you are, or will shortly become, an attractive target for activism.”
  26. Many companies lump all activists into one category, but in reality, there are many different types of activist hedge funds, each with different investment models and different objectives in terms of the timing and size of their investment return. Though the range of desired activist outcomes is quite diverse, an easy way to look at it is to group them into two broad categories: activists with a longer-term and collaborative approach to underperforming companies, who have a concrete turnaround plan developed just for that company; and, activists with much shorter time horizons and more of a one-size-fits-all “playbook” to generate quick returns.
  27. Small-Cap Institute’s Amanda Gerut interviews renowned small-cap CEO, Billy Prim. Mr. Prim founded Blue Rhino, which was ultimately acquired for $340m. Subsequently, Mr. Prim founded Primo Water (Nasdaq: PRMW), where he now chairs the board. Mr. Prim provides invaluable insights for other small-cap CEOs about how he was able to grow and sell Blue Rhino, and then use what he learned to found another company with a market cap that today exceeds a half billion dollars.
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