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Dec 22, 2022

Eight trends that will dominate investor relations in 2023

New year, new thinking on investor engagement tactics and using artificial intelligence

As 2022 draws to a close, we’re waging a bet on the trends we’ll see in investor relations in 2023. After a year of rapid changes and innovations in our industry, we expect to see similar swift pivots and an uptick in post-pandemic activities that will fluctuate with the ever-changing IR landscape.

Staring down a year of modified communications tactics, artificial intelligence (AI) tools that will change workflows and investors continuing with their 2022 trend of tighter purse strings, here’s our insight on what to expect in investor relations for the bright year ahead. 

1. The power of personal touch

IROs and the C-suite spent 2022 venturing back out into the wild after nearly two years spent making connections behind a screen. Although digital marketing made it easier to send customized email marketing campaigns, it meant investors stopped picking up their phones.

With reduced travel budgets and the benefits of technology, we’re predicting that in-person meetings and group presentations will come back at a slow but steady pace, bringing us back to the irreplacable power of building relationships with a personal touch.

We predict that IROs will comb through their non-objecting beneficial owner and top holder lists and focus on nurturing their top holder relationships through personalized email communication and in-person catch-ups.

We saw a trend of IROs using texts for investor updates in 2022 and we anticipate that trend of simple, efficient and personalized communication will continue in the upcoming year. 

Eight trends that will dominate investor relations in 2023
Caroline Sawamoto, irlabs

2. Reimagining newsletters

There was a time when newsletters were the shining star of communications. As everyone and their dog started to write newsletters to capitalize on ad placement, however, our inboxes became flooded with dailies, weeklies, industry insights and breaking news updates. What should you do instead?

Leverage your own database to share simple and ‘clean’ company updates: latest news, a video or a link to the latest corporate presentation. If you’re looking for third-party endorsement or exposure beyond your own database of news subscribers, aim for earned media instead.

Pitching your news to journalists in financial media or your specific sector and securing top-tier media will earn you credibility. If you’re not media-trained and you’ve never pitched before, be sure to consult a PR agency. Reputationally, you don’t want to fall flat on your pitch and be blacklisted by a journalist.

3. Video content is gold

Video storytelling will reign in 2023. This is nothing new but many companies are slow to adopt due to the fear that you require a Hollywood budget to make it happen. If you don’t know where to start, a simple web search or network ask will quickly show that you can bring your story to life at minimal cost.

Video is helpful to explain your business, create visual stories and raise the profile of the product or service you deliver. People want to invest when they understand your value proposition. Did you know that uploading videos to YouTube that target common search terms can be a good way to get your business on the first page of Google? Now you do.

4. Demand for alternative financing

Access to capital is critical and the public markets proved to be challenging from a financing perspective in 2022, forcing companies to turn to alternative financing solutions such as factoring, lines of credit, term loans and equity crowdfunding. We predict that online capital-raising platforms will increase in popularity in 2023, making it easier for investors to do their own due diligence and select investments that align with their interests and values.

5. Fundamental investors are back

It’s been a great run. In 2022 many investors lost their spark and confidence due primarily to external factors such as inflation and rising interest rates wreaking havoc in the public markets.

As investors allocate capital in 2023, we predict a heightened emphasis on the fundamentals underpinning businesses: strategy, management, governance and pathway to profitability. Be ready to clearly articulate strategy and competitive advantages. Those who can master the pitch will prevail. 

6. Evolution of the investor deck

The days of 30-plus-page investor presentations are (finally) behind us. In 20 slides or less, companies are seeing success with the expectations to simply illustrate their thesis and value proposition. Investor decks embedded with videos, links and QR codes will tell a story and hold attention. Focusing on quality content, a clear vision and a pathway to growth are the tried-and-true ways to keep opportunity knocking at your door. 

7. AI in IR

Digital communication channels have become an integral part of investor relations. With platforms and tools to help IROs make decisions, as well as digital ad campaigns, email marketing and data analytics becoming front and center in IR workflow, digital communications have become an integral puzzle piece of investor relations.

Eight trends that will dominate investor relations in 2023
Alyssa Barry, irlabs

We predict that investors will rely more heavily on AI-based tools to support their approach to investing and gain insights into their portfolio companies. Investors are adopting AI-driven software to analyze earnings calls, while companies are leveraging tools to understand investor sentiment. AI will become more rampant, and has instantly become a new line item in IR budgets of the future.

8. Buckle up and prepare to pivot

If you thought 2022 was a roller-coaster ride, hold on tight. We predict that 2023 will be an unpredictable year. Before you begin finalizing your goals for the coming year, evaluate your ability to pivot or adapt for 2023. Set targets that make sense based on the current market environment, along with a functional roadmap to success, and be ready to take on change with stride.

In the past few years, we’ve seen mind-blowing technology advancement and innovation in capital markets that we don’t see slowing down any time soon. As the world shifts and changes, so does our industry. With those changes, the only way to stay ahead of the disruption is to anticipate it.

If you’re finding yourself still trying to recover from the disruption, you have to start learning to pivot with it. Being open to innovating the way you navigate investor relations will make it easier to stay on top of trends and, with a finger on the pulse of consistent change, you’ll ensure you don’t fall behind.

Alyssa Barry and Caroline Sawamoto are principals and co-founders of irlabs