Quick Answer
The road show is the structured marketing push between the preliminary prospectus filing and pricing. Banking helps the issuer prepare the presentation and management talking points, sets up investor meetings (one-on-ones with anchor accounts, group lunches, video conferences), reviews the issuer's current shareholders and the shareholders of comparable companies to build the prospect list, and distributes road show slides and the preliminary prospectus to potential investors as permitted by the marketing-period rules.
The road show is when the deal stops being a banking project and becomes a sales push. Management is in front of investors, the preliminary prospectus is on file, and the marketing window is the time the firm has to convert interest into orders.
Road Show Preparation
The banking team assists the issuer in preparing every piece of the road show product. The issuer's chief executive officer (CEO) and chief financial officer (CFO) are on the road for two to three weeks; the banking team is the prep coach.
- Slides and talking points: Scripted around the sales-point narrative; aligned with the registration statement
- Management training: Mock questioning, rehearsal of investor questions, body-language coaching
- Materials sourcing: Pulling industry data, peer trading levels, and forward-looking statements that match the registered disclosure
- Schedule design: Sequence and geography of meetings (US East coast → US West coast → London → continental Europe, or similar)
The road show typically follows the filing of the preliminary (red herring) prospectus and runs through pricing. The "red herring" name comes from the legend printed in red on the cover stating that the registration is not yet effective.
Exam Tip: Gotchas
- The road show launches after the preliminary prospectus is filed. Pre-filing marketing is sharply restricted under the gun-jumping rules; the preliminary prospectus is the trigger that opens the marketing window.
- Bankers train management; they do not present. The CEO and CFO are the speakers. Bankers sit in the back of the room and field follow-up.
Investor Meeting Formats
The road show is built from three meeting formats, each picked for a specific investor type.
| Format | Audience | Purpose |
|---|---|---|
| One-on-one meetings | Anchor institutional accounts (large mutual funds, pensions, sovereign wealth funds) | Deep diligence, anchor allocations, lead-in IOIs |
| Group lunches / breakfasts | Mid-size institutional accounts | Efficient throughput across 10-30 accounts at once |
| Video conferences | Remote accounts, time-zone constraints, post-COVID demand | Cover accounts that would not fit the physical itinerary |
One-on-ones are where the largest orders form. A single anchor IOI from a top-tier institutional account can cover 15-25% of the book. Group lunches build breadth; video conferences fill scheduling gaps.
Exam Tip: Gotchas
- One-on-ones with anchor accounts are the primary source of large IOIs. A top-tier institutional one-on-one is the highest-leverage meeting in the schedule.
- Video conferences have replaced a meaningful share of physical meetings. They are now a standard format, not a fallback.
Shareholder Review for Prospect Lists
Before the road show launches, the banking team builds the prospect list: which investors to call and which meetings to schedule. The list is sourced from two systematic reviews.
- Review of the issuer's current shareholders (for follow-ons): Mined from the issuer-side beneficial-ownership filings (Schedule 13D / 13G) and from large-institution holdings filings (Form 13F)
- Review of the shareholders of comparable companies: Surface investors who already own peers; they have the mandate and the sector appetite
- Output: Targeted prospect list for the road show schedule and the IOI book
For an IPO, the issuer has no current public shareholders, so the prospect list comes entirely from the comparable-company shareholder review. For a follow-on, both data sets are used; existing holder participation is often a signal of how the market will receive the offering.
Think of it this way: if the deal is a Series-B biotech IPO, the prospect list is built by pulling the 13F filings of every biotech-focused mutual fund and hedge fund that owns the three closest peers. Those funds already have a portfolio thesis the new company fits; cold calls outside that universe waste meeting slots.
Exam Tip: Gotchas
- Existing-shareholder review is dual-use. It helps marketing identify prospects AND it surfaces participation expectations for a follow-on. For follow-ons, whether existing holders participate is a separate pricing factor.
- Form 13F filings are quarterly with a 45-day lag. The data is recent but not real-time; the banking team triangulates 13F with current research-coverage and broker sales-trader color.
Distribution of Materials
Permitted marketing material is distributed to potential investors as permitted by regulations.
- Preliminary prospectus (red herring): The primary disclosure document; must be delivered to anyone who wants to read it during the marketing period
- Free writing prospectus (FWP): Issuer-specific written communication that includes information not in the preliminary prospectus, allowed for offerings that meet certain conditions
- Road show slides: Often qualify as written communications and must be filed if they are sent to a broader audience
- Tombstone ads: Limited-content notices identifying the security and the underwriters (legal under the limited-content carve-out)
Bankers cannot freelance the document mix. What may go out, when, and to whom is governed by the post-filing communications regime, not by what the banking team thinks is good marketing.
Exam Tip: Gotchas
- The preliminary prospectus must always be available during marketing. A potential investor asking for the red herring during the marketing period must receive it.
- The free writing prospectus is the only sanctioned channel for written extras (e.g., a custom valuation slide). Anything written that sits outside the preliminary prospectus and is not a tombstone has to qualify as a free writing prospectus, or it is not allowed.