# What a Roadshow Is and How It Creates a Successful IPO

> **Definition**
>
> Roadshows are meetings during an IPO that help underwriters gather investor demand data before setting the IPO offering price.

## What Is a Roadshow?

A roadshow is a critical part of the [Initial Public Offering (IPO)](https://www.investopedia.com/terms/i/ipo.asp) process, where a company’s executive team and its underwriters pitch the newly formed company to prospective investors. Meetings may be held in person and virtually.

A roadshow showcases company financials and generates enthusiasm for the offering. Roadshows are regulated according to rules of the [U.S. Securities and Exchange Commission](https://www.investopedia.com/terms/s/sec.asp) and allow institutional investors to ask questions, meet management, and ultimately help set an IPO price.  

### Key Takeaways

*   A roadshow is a marketing tour for institutional investors before a company’s IPO.  
    
*   Roadshows typically include financial presentations, management Q&As, and often multimedia content.
*   The success of a roadshow can significantly influence IPO pricing and investor demand.  
    

![Reddit mascot rings the NYSE opening bell.](https://www.investopedia.com/thmb/Ysm2mtqq2gCNQyu1x2f5WG0z9sg=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/GettyImages-2095063385-d2dd337d043d4b8192cb14285aed2b37.jpg)

*Snoo, the mascot of Reddit, rings the NYSE opening bell during the company's IPO. — Bloomberg / Getty Images*

## The IPO Process

Once a company decides to go public, it partners with underwriters—usually [investment banks](https://www.investopedia.com/terms/i/investment-banking.asp)—to help structure and market the IPO. The IPO process includes filing an [S-1 registration](https://www.investopedia.com/terms/s/sec-form-s-1.asp) with the Securities and Exchange Commission (SEC).

The SEC's Rule 433 of the amended [Securities Act of 1933](https://www.investopedia.com/terms/s/securitiesact1933.asp) defines a roadshow as a presentation made by one or more members of the IPO's management to discuss securities being offered. Roadshow presentation materials must adhere to SEC guidelines, especially regarding forward-looking statements and financial disclosures.  

## How a Roadshow Works

Over several days or weeks, the company’s leadership and bankers host presentations and one-on-one meetings with large institutional investors across financial hubs like New York, San Francisco, London, and sometimes virtually. The goal is to build credibility and momentum.

A standard roadshow pitch includes [financial performance](https://www.investopedia.com/terms/f/financialperformance.asp), growth strategy, industry positioning, competitive advantages, and leadership bios. Compliance teams may vet slide decks, talking points, and videos before the tour. Meetings are often restricted to [qualified institutional buyers (QIBs)](https://www.investopedia.com/terms/q/qib.asp), and while many roadshows are live-streamed or recorded, the content remains tightly regulated.

Meetings help investors assess the management team’s capabilities and commitment firsthand. For the company, they’re a temperature check: Which investors are leaning in, what valuation are they comfortable with, and how many shares are they likely to buy? Underwriters can then fine-tune demand through “[book building](https://www.investopedia.com/terms/b/bookbuilding.asp),” which determines the [IPO price](https://www.investopedia.com/articles/financial-theory/11/how-an-ipo-is-valued.asp) and share allocation.  

## Types of Roadshows

*   **Traditional**: A pre-IPO roadshow tour designed to drum up demand, communicate the company’s value, and set the stage for the public listing.  
    
*   **Non-Deal Roadshow (NDR)**: Companies meet with institutional investors without offering equity or debt. It’s more of a corporate update—providing transparency, reinforcing relationships, and potentially setting the groundwork for future capital raises.  
    

## Advantages and Disadvantages

Roadshows act as a bridge between a private company and the public market. They can build trust, clarify a company’s growth strategy, and help underwriters gauge demand. However, they also come with trade-offs for executives navigating a first-time offering.

Roadshows offer the advantage of face-to-face engagement with potential investors, helping executives tell their company’s story directly. They also enable [book runners](https://www.investopedia.com/terms/b/bookrunner.asp) to gather real-time feedback, which can influence the final pricing and demand for the IPO. For some companies, the buzz generated during a roadshow can materially improve investor sentiment ahead of the offering.

However, roadshows require time and energy from the executive team. Preparing presentations, traveling to different cities, and fielding tough questions from institutional investors can distract from day-to-day operations. There’s also the risk that if the roadshow isn’t compelling, it could dampen enthusiasm or signal weak investor interest.

Pros

*   Creates early momentum and investor interest  
    
*   Provides valuable feedback to price the IPO  
    
*   Allows management to build credibility and share strategic vision  
    

Cons

*   Time-consuming  
    
*   Poor roadshow performance can harm IPO sentiment  
    
*   Interferes with daily operations
    

## Example

When Uber prepared to go public in 2019, it launched a two-week roadshow targeting U.S. and European financial centers. The company’s leadership pitched the ride-sharing giant’s growth trajectory and future potential to [hedge funds](https://www.investopedia.com/articles/investing/102113/what-are-hedge-funds.asp), asset managers, and pension funds.

Despite heavy interest, the roadshow revealed tempered investor appetite due to ongoing losses and competition with fellow ride-hailing app Lyft, leading Uber to price its IPO conservatively at $45 per share.  

## The Bottom Line

Companies and their executives use roadshows to shape the success of an IPO. By building relationships with investors and refining the pricing strategy, roadshows help align expectations between the company and the market. While they require careful planning and regulatory considerations, a successful roadshow can be the difference between a lukewarm offering and a blockbuster public-market debut.  

> **Article Sources**
>
> 1.  U.S. Securities and Exchange Commission. "[Going Public](https://www.sec.gov/resources-small-businesses/going-public)."
>     
> 2.  U.S. Securities and Exchange Commission. "[What is a Registration Statement?](https://www.sec.gov/resources-small-businesses/going-public/what-registration-statement)"
>     
> 3.  U.S. Securities and Exchange Commission. "[Jumpstart Our Business Startups Act Frequently Asked Questions](https://www.sec.gov/rules-regulations/staff-guidance/compliance-disclosure-interpretations/jumpstart-our-business-startups-act-frequently-asked-questions-confidential-submission-process)."
>     
> 4.  Cravath, Swaine & Moore LLP. "[The Nuts and Bolts of Road Shows](https://www.cravath.com/a/web/379/3233987_1.pdf)."
>     
> 5.  Cravath, Swaine & Moore LLP. "[The Nuts and Bolts of Road Shows](https://www.cravath.com/a/web/379/3233987_1.pdf)." Page 1.
>     
> 6.  The New York Times. "[Uber Aims for Valuation of Up to $91 Billion in I.P.O.](https://www.nytimes.com/2019/04/26/technology/uber-ipo-valuation-price-range.html)"
>     
> 7.  CNBC. "[Uber Prices IPO at $45 Per Share, Toward the Low End of Range](https://www.cnbc.com/2019/05/09/uber-ipo-pricing.html)."
>     
> 8.  Uber Technologies. "[Uber Announces Pricing of Initial Public Offering](https://investor.uber.com/news-events/news/press-release-details/2019/Uber-Announces-Pricing-of-Initial-Public-Offering/default.aspx)."