We recently had the opportunity to chat with Nicole Marchand, CEO & Co-Founder of Grit Capital, a capital market advisory firm based in Toronto, Canada.
Grit was founded on the belief that modern markets require a modern strategy. Along with Genevieve Roch-Decter, the other half of Grit, Nicole has carved out a niche in millennial investment themes which include Cannabis, Technology, FinTech, and Consumer Products – some of the largest and innovative growth sectors in North America.
Read on to find out why Nicole believes IR professionals remain essential, the importance of being active on social media, and what investment opportunities may present themselves post-COVID-19.
Tell us a bit about your professional experience and how you came to form Grit Capital with Genevieve?
Marchand: My background started in finance. I worked in investment banking, focusing on mergers and acquisitions. I kind of sat at my desk every day thinking that there has to be a better use of my time and energy. I was always really passionate about starting my own business. So I started my own IR firm. I did that for three years and then really felt like I needed to learn a bit more.
While I worked in institutional equity sales, that’s where Genevieve and I became close. She was one of my clients we became friends over several years. When she decided to leave her family business, we got together and saw a real need to turn the IR world upside down. So, we set out to do things differently. Together, we wanted to add kind of an element of fun to the world of finance…An area that been traditionally looked at in kind of a boring way. We made it our goal was to entertain and delight both our clients and investors. Another big differentiator was the fact that we chose to focus on the social media aspect of our business. Early on, we started building our Instagram and social media, which has now grown to over 150,000 followers. That has differentiated us from competitors.
Grit differentiates itself by showcasing its clients to investors through a blend of traditional and modern investor relations. How important is it to utilize digital tactics to reach today’s investor?
Marchand: It’s incredibly, incredibly important – especially right now as we deal with COVID-19, and people are staying connected on digital social media platforms. In recent years, we’ve seen that people are not digesting news in the traditional manner such as TV or newspapers as much. They’re on Instagram. They’re on Tik Tok. They’re on Twitch. Following these digital trends has been vastly important to Grit. As I mentioned, we’ve grown our followers over one hundred fifty thousand. So we think of our social media as having our personal TV channel where we can broadcast themes and thoughts efficiently and effectively. Every day we get thousands of views on our posts. And this is important to our clients because a CEO can be focussing on his business and executing while we can focus on promoting them and putting them in front of investors through our social media platforms.
Obviously COVID-19 has been putting a strain on economies and markets all over the world! What advice do you have for investors about how to weather this storm?
Marchand: It’s back to basics. For me, the number one thing is looking for companies that are well-capitalized to weather the storm. That means that they have sufficient cash and can survive long term. A secondary focus would be looking at businesses that are actually going to prosper during the coronavirus. So these are businesses that are targeting at-home fitness, tech that makes it possible to work from home, things like that. These businesses are going to do well through COVID-19 and afterwards.
That transitions nicely into my next question. What sectors do you see do well now and post-COVID?
Marchand: A sector we’re focussed on is right now gold. With governments around the world printing so much money and entering a time of unprecedented financial instability, we think gold is a very good place to be. Even after COVID, I think gold is going to be a very important investment vehicle.
Our next focus is on digital health. Right now, people are unable to go to their doctor’s office to access health care like they used to. We’ve noticed there are a lot of really innovative companies that are offering health services without you having to be face-to-face, whether that telemedicine or online counselling!
We’re also looking at the “work from home” stocks. A lot of companies were very hesitant to initially let employees work from home. But we’re seeing that employees are proving themselves capable (to work from home) and large companies are questioning whether they may need as much office space going forward. So I’m interested in any sort of a company that helps companies and employees work from home. We see these services doing very well in a post-COVID environment.
Another trend we’ve been following and believe is going to do well over the next decade is plant-based foods. I think COVID-19 has brought to the forefront some of the downfalls and issues with the meat and dairy industry. This could be the start of a real social shift away from traditional dairy and meat.
During this unprecedented time, what do you think companies need to be doing now to communicate with investors?
Marchand: Stay in front of investors and don’t use this pandemic as an excuse to hide. Give investors an opportunity to see and interact with the management team and answer questions. We do this frequently for our clients through our webcast services. A webcast is different from a traditional corporate or earnings call. This is where you can see the CEO, investors can ask questions – it’s much more interactive than the traditional conference call.
I also suggest taking advantage of social media. On social media, there are unprecedented numbers of people viewing posts and videos, interacting, discussing, and sharing information. Take advantage of these platforms and get in front of investors.
Do you find that execs don’t often understand when you push the importance of a strong social media presence to them?
Marchand: Definitely. But social media is so important to us and we try to impart that onto our clients. I compare it back to Cambridge Analytica. When you look at case studies, you can see how citizens were influenced to vote based on what they saw on social media and what they saw on the internet. Do you have that same type of influence on investors? You can influence what they buy, what they sell, and what they hold on to through social media in ways that will surprise a lot of people. You can also target investors through social media and through digital ads. You may not be targeting the portfolio manager or the institutional investor, but instead the at-home buyer. That group is becoming a very powerful cohort of investors that can really move your stocks.
How do you think the role of an IR professional has changed over the last decade?
Marchand: Technology has changed the game. Investor targeting is really important. Before, we would kind of leave it up to the institutional salespeople or have investors reach out to us, but through the internet and technology, we can target the right investors for the right stage that your company is in.
Social media has also made it possible to broadcast your message to hundreds of thousands of people at the click of a button. How many people make decisions based on what is written about a company on social media rather than the traditional analyst’s report? We know hedge funds give more value to a Twitter post or a Reddit post than they do to actual analyst reports.
And then the last thing I would say is the shift in focus on ESG – environmental, social and governance – has drastically changed over the last decade where that went from a “nice to have to a “need to have.” That has to be at the forefront when you’re presenting to investors.
What is the value that an IR expert brings to a company?
Marchand: An IR expert can set realistic expectations with investors. They work with management to set realistic expectations so that investors are always delighted and their expectations are exceeded. IR experts also help showcase the company to a wide audience while the CEO and C-suite management are preoccupied with building a business. A good IR professional should be out there showcasing the company while the CEO continues to work.
They should be constantly pushing the company forward, finding new investors, finding new ways to showcase a company, and trying things that are outside of the box. The last thing I would say is that an IR professional gives honest feedback to CEOs. Often CEOs are constantly praised, but a good IR professional will let them know their downfalls as well.
We’d like to thank Nicole for taking the time to speak with us! Money Works Magazine is dedicated to sharing thought leadership information, investing news, and market trends with our readers.