Is Your IR Firm Worth It? A Data-Driven Framework

The traditional IR industry was built for a different market. Pre-algorithmic, relationships between IR professionals and portfolio managers drove real access. A phone call from a well-connected IR consultant could get your CFO a meeting.

That model still works — for large-caps. For companies under $500 million, the math has changed.

What You're Actually Buying

At $8,000–$15,000/month, you typically get: - Quarterly earnings call prep and scripting - Press release drafting and distribution - 3–4 investor conferences per year - Investor contact database maintenance - IR website maintenance

The question is whether these services are generating institutional ownership changes — the only outcome that moves your stock.

The ROI Framework

Over the past 12 months:

• •Total IR spend = $X
• •New institutional meetings generated = Y
• •Meetings that converted to ownership = Z
• •Additional institutional ownership added = W shares × price = $V

$V ÷ $X = your IR ROI multiple. Below 3x, your IR program isn't covering its cost of capital.

What to Actually Measure

Primary KPIs: - Institutional ownership % (tracked via 13-F filings) - Average daily trading volume trends - Bid-ask spread compression - IR website visitors from institutional domains

The honest conversation: Most IR firms earn their fees in the first 6–12 months. After that, a significant portion goes toward relationship maintenance that may not translate to institutional action.

Ask at renewal: "Which institutions bought our stock in the past 12 months, and which purchases are directly attributable to your outreach?" If they can't answer with specifics, you're paying for activity, not outcomes.

Get a free algorithmic IR score — it benchmarks your disclosure quality against institutional screening criteria and identifies exactly where your IR spend should be focused.