Throughout my investor relations career, I have often seen a focus on quantity over quality.

Vendors often focus on metrics with large numbers that help substantiate the value and “pitch”. After being pitched by all these service providers repeatedly (which is surprisingly frequent), I've started to notice recurring patterns.

Firstly, these firms’ pitch typically involves helping issuers get in front of bigger audiences, getting more 1x1 meetings, unlocking liquidity, etc. This may come in the form of conferences, digital investor promotion, influencer marketing — the whole gamut.

However, it’s not as straightforward as it seems.

Your pool of potential investors is already limited as a microcap, and thus, finding the right long-term partners is going to be challenging. Anyone working in the industry also knows how small it is, which discredits the large numbers mentioned earlier. 

Ultimately, many of the tactics pitched to you are just that… tactics… and they attract a certain kind of crowd. They are not going to be a substitute for actual business execution and are likely going to be expensive and ineffective to execute.

“Real microcap investors” focus on real businesses. They’re usually looking for similar things among companies and share similar approaches amongst each other as investors. This helps you focus your efforts.

In addition, having these people on your cap table offers distinct advantages to you as an issuer, which shouldn’t be ignored.

Of course, some microcaps are happy to get anyone onboard because, so few investors understand and care about their company. This is further exacerbated by the secular decline of active investors and market dynamics like U.S. trade and tariff uncertainty causing capital to flee to safety. 

I want you to help you think through your approach to attracting shareholders and how the right investors can contribute to you becoming a stronger, more resilient microcap.

To start off, many people within the microcap ecosystem are there to sell you a service which doesn’t always align with your interests. 

They might present themselves as investors, or claim to know investors, but could be service providers, bankers, short-term traders, or private placement financiers. Sometimes it can be hard to tell.

In my opinion, a “real microcap investor” is not:

I’ve inverted the criteria to help you get the gist of my point. 

I believe the ideal microcap investor is someone focused on the business fundamentals, aims to invest over the long term, has high conviction (shown through portfolio concentration), and often engages in an active dialogue with management.

They lean into the operational experience of the management team, how the long-term strategy is laid out, assess profitability or cash generation, dig into the competitive moats, and more.

You'll quickly recognize them by their relevant questions and clear intent.

Lastly, they are likely also managing their own capital in their own personal portfolio or family office. It’s rare to find institutions able to invest in such small companies, particularly for those below $50 million in market cap.

Like many others, I like to think of investing as a business partnership. An investor has chosen to partner with you in your business and wants to see you succeed.

I believe that having long-term, fundamental shareholders can help:

And more…

Do you think the Warren Buffets of the microcap world find companies through LinkedIn ads?

Most likely not…

There are many places to find investors. Some of these venues and organizations include: MicroCapClub, Paul Andreola’s SmallCapDiscoveries, Canaccord Genuity’s retail brokers, SubStack writers, X.com, etc.

You will need to assess what these investors are looking for and how that maps to your story. Thankfully, many of the best microcap investors are quite clear and public about what kinds of situations and companies they seek, which helps qualify them quickly.

I plan to go into further depth about what can be done to attract them to your company in further Panolia Newsletter issues.

As a microcap, it’s essential to attract and partner with investors who focus on your business fundamentals.

These are not short-term traders or service providers looking for quick gains, but rather individuals or small family offices managing their capital with a deep desire to understand your operations and strategy. By building a supportive base of these investors, you can potentially benefit from reduced volatility, a lower cost of capital, and referrals to relevant parties.

To put it bluntly, it will be difficult for some companies to attract these kinds of investors. However, I believe that companies should avoid tactics that prioritize quick wins and instead focus on demonstrating strong business fundamentals and communicating them well to the market.

I hope this has given you more to think about and that this issue will help your journey in becoming a stronger, more resilient microcap.

Below are the latest announcements of investor relations and promotion agreements by Canadian listed companies (TSX-V, CSE, and NEO).

Although each contract varies, I have highlighted the cash component of the disclosed agreements and provided the monthly equivalent if the agreement covers a longer specified period. It also does not include any stock-based compensation, such as options.

⁽¹⁾Amounts have been converted to Canadian Dollars, and if applicable, do not include stock-based compensation.

Legal Disclosure 

This newsletter is provided solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The information contained herein should not be construed as legal, tax, investment, or financial advice. It is imperative to understand that some of the companies mentioned may be retained investor relations clients of Panolia Investor Relations Inc. Readers are strongly encouraged to perform their own due diligence and consult a registered advisor or broker-dealer before making any investment decisions.