Q4: Connecting investors and companies through technology
The current investment climate is tough. Markets are unstable, and finding the right investors to partner with businesses is a challenge. But one company, Q4 Inc., is addressing those market difficulties with its unique array of offerings and experiences.
In a nutshell, Q4 Inc. is a technology and software platform company with a unique set of solutions primarily for its corporate issuer clients. It is focused on capital markets, and its offerings impact investor relations programmes, investor relations (IR) strategies, and, therefore, financial valuation of 2,700 public companies in its client base.
Q4’s solutions include IR websites, IR virtual events, capital market events, CRM and Analytics for investor management and investor pipeline management. It also provides analytics through its technology platform, with unified data and increasing functionality on a capital markets platform.
Through these solutions, Q4 enables all sides of the capital markets to enter and connect with the other in suitable investment relationships.
Core aims for sound investor relations
At its core, Q4 serves investor relations on the corporate issuer side. The company’s mission is to help corporate issuers win in the capital markets.
This takes careful strategy but reaps great rewards because winning in the capital markets enables businesses to have access to the right investors at the right moment in their journey.
Explaining the company’s core aims, Q4’s CFO and COO, Donna de Winter, states that democratising the investor relations space is Q4’s biggest motivator, because it enables companies that would otherwise be left out of the investor loop to engage with investors that suit their agenda.
Describing the process, de Winter says Q4 is a big disruptor because it offers an alternative to the traditional model.
“You have the corporate issuers and you have buy-side or portfolio managers, and the two shall only meet through the sell side connector. . It was the sell side deciding to bring corporate issuers in front of the buy side, and the buy side deciding whether to take a position or not. That's how it's worked for a long time.”
“Now, between regulation and the economic model, the banks (the sell side), have had to move up and up and up in market cap to who they serve. This has left a good portion of capital markets unable to access the buy side and unable to access the money. So there's inequity in how they find the right money for their story, for their strategy.”
It’s important to note that Q4's vision is not to replace the sell side; rather, it is to democratise capital markets by levelling the playing field via its technology platform, where all sides of the market can meet. It enables equity of any size to meet with the right buy-side money.
“I feel very strongly that, in the next 10 years, that's how capital markets will be described. It's so important that the issuers, the ideas, the momentum in society is fueled by the right investment, by the right investors through a technology meeting place.”
Transforming the investor relations space
de Winter likens the Q4 platform to many current multi-sided platforms that have disrupted their industry. Rich profiles created from valuable interactions with the platform coupled with the right filters and data, and the outcome is intelligent communication and engagement across the stakeholders. Companies can identify and engage with investors having similar goals, thus creating productive partnerships.
“You should be able to identify each other and meet through insightful data and technology. We don't want a part of the economic transaction and we understand that the large cap companies are always going to work with the sell side. There's a lot of value that comes out of the sell side.”
“But for everybody else, it should be equitable to be able to interact in that way. I believe that society will stagnate if that's not enabled over the next decade. I believe we have a large role to play in allowing that to happen and enabling it to happen with our platform.”
A pragmatic approach to investment
With her broad-spectrum experience, de Winter possesses the kind of skills’ arsenal that means she can stay cool under fire – an undeniable asset in the midst of a cost-of-living crisis that follows a global pandemic of apocalyptic proportions.
At the beginning of our conversation, she tells me how she’s kitted out her daughter and grandchildren with Canadian cold weather gear – meaning they are well equipped to deal with the much less challenging UK cold season where they are currently residing.
It's an indication of her pragmatic approach to life. Preparedness is essential, experience, invaluable – and staying calm in the tough times inevitably produces the most favourable outcomes.
A natural problem solver, de Winter has thrived within Q4’s holistic approach to business. The company has a robust marketplace reputation when it comes to investor relations, a critical element of the company’s success story.
“It's almost a match.com story here. Corporate issuers need to attain their investors and maintain their investors, and without intelligence, there's a lot of dates and there's only a handful of successful marriages – so it’s critical to make sure the marriages happen on the right basis.”
But, on a more serious note, she points out that the investor relations programme and strategy is critical right now because asking investors to believe in their company and the investment thesis in a market that's out of control is challenging. But, she says that part of Q4’s success can be attributed not only to their long-term marketplace experience, but also to their technology and service offerings focused purposefully on IR.
“We chose a path to offer technology and service. And, within the services org, we have accumulated well over a hundred years of IR expertise. This goes across many types of markets, companies, and industries.
“We work closely with IR Agencies and see the importance of the entire capital market ecosystem. While we don't compete with IR Agencies, we've been in their shoes as practitioners, which differentiates us when serving our 2,700 clients. We know there isn't an investor relations programme that can solve what's going on in the stock markets right now. There is just operating soundly, challenging your business investments to their outcomes, sticking to your strategy, and your performance against your peers. Our clients value our support in these times.”
Operating as a CFO and COO
Once again driving her actions from a place of practicality, de Winter made the decision to occupy two C-level positions – simultaneously.
“Numbers are an outcome of how you operate, and, therefore, you can't understand the numbers if you don't understand the operations of the business. I had that broader understanding as a CFO. No number happens by accident; it is an outcome of your business strategy, of your operations.”
She is clearly comfortable with this duality that she has occupied since June 2022 – and little wonder, as prior to her COO appointment at Q4, she was a CFO for 25 years, thus is adept at large-scale number-crunching. “I have the history of being the shortest tenured board member for the company,” she laughs.
“I came in as a guest, was approved as a board member, stepped out; two weeks later, I resigned so that I could become COO in the company. It was a fantastic opportunity and I was hugely excited to join. Since then, I've been with the company for four years in the COO role. Last June, I took on both the interim and then, eventually permanent, CFO seat as well.”
She also believes that more companies should consider the dual-role route, especially within the technology space, because creating balance can make or break a company.
“In these kinds of markets, you're attaining that balance of the right amount of investment without forfeiture of client excellence or employee excellence, and that teeter-totter, that balancing, is so critical. Having spent three and a half years close to the clients, and with a large number of the employees in my direct reporting line, it allowed me to say, ‘These are the right places to continue the investment, and these are the places I believe we can pause investment until we see a different market’.”
Ultimately, because financials offset operations, de Winter has a solid grasp of what money goes where across the board.
Generally, the role of the CFO has also changed over the past decade, evolving from a strictly financial perspective to one that also involves partnership decision-making. de Winter says that when she first started out, the job was mainly about the production of financials, around GAAP accounting.
Today, however, far more BI tools are available, as well as insights for rolling forecast, forecasting planning and analysis, meaning that she describes the role as: “GAAP accounting from today and backwards, while the financial planning – the FP&A – is today and forward, though leveraging the trends of the past. The ability to model the future is addictive.”
Balancing the decision-making process
The financial markets have always fluctuated, but, currently, the environment is very difficult to predict. It’s essential not to overreact to movement – and it's also important to remember that stock can go up or down on any given day without a business reason.
de Winter views the use of accurate data and communication as a critical part of supporting clients. “It is allowing them to see through the noise, to retain their strategies, to retain their communication plans. And, in some cases, it is to pursue different investors who are more aligned with the duration or for the term of the strategy.”
If it's a two or three-year strategy, then you need investors who are available for that duration and not those with a short term investment mandate.
“All of that is necessary to help our clients; all of it's necessary to be excellent. But the resident subject matter expertise in the platform and our people allows the delivery, the calmness and the credibility in service to the clients.”
Marketplace inclusivity for small cap investors
Fueling Q4 is the marketplace demand for its solutions. There have only been single point solutions for small to mid-cap customers, who make up the majority of Q4’s client base. These companies have experienced a range of struggles over the past three years as a result of the fluctuating economy and need access to a full set of solutions with one partner.
de Winter cites a few examples, saying: “They've lost the currency of their equity with lower share valuations. They could have turmoil in their shareholder base. At a minimum, they have shareholders who are highly concerned about the stock markets and then they have the day-to-day operation of their business – there's a whole range of challenges in this type of market.”
Q4 has also had its fair share of turmoil as a result of the markets, and recently went through its IPO - a move that, due to the tumbling market, has resulted in share price and valuation drop. But the experience and focus of its leadership team has resulted in building a fair degree of resilience.
“We have been more fortunate than most, in that, when we went public a year ago, the core investors were in it for the long run. There was a core set of holdings that said, ‘Well, I'm buying now because I know what this company can be in three years’.
“I think the hardest part as a new public company has been to say, ‘Park what the market feels about us right now and just operate the hell out of the company – just operate with excellence’. We are stronger. We were stronger in November 2022 than we were in '21. We will be stronger again in November '23.
“We're stronger technology-wise and we're stronger client base-wise. You have to almost put blinders on just to operate and trust that the dynamics influencing the market right now won't be there forever.”
She points out that companies that have focused on core strengths will turn around the fastest. “We watch the stock, but we make sure the company is doing all the right things. We have an obligation to our employees, the investors , and our clients. We're going to do the right things year over year, and it'll play out in the stock market the way it should over time – probably not in '23, but over time.”
The future for Q4
Regardless of the economy, Q4 is unstoppable in its strategy, which involves the full rollout of its investor relations platform by early to mid-2024.
The development has been thoroughly ambitious – but de Winter points out that it's just the beginning – that new applications and services launched on the platform will ensure increasing value creation for clients. The past year has already seen the company move ‘light years’ ahead, in terms of technologies and offerings.
“It is a one stop shop. You log on in the morning and spend your day there supporting your IR programme – that's incredibly powerful and exciting for us as well, watching that play out. It's not for the faint of heart, getting to a platform technology and deciding to bring the clients over into this experience, even when you know it's a better experience. Every migration has to be planned very thoroughly. “
But it's certainly been worth it: de Winter is fired up and ready for the months ahead. “As with most technology companies, 60-70% of their expenses as a percentage of revenue are people costs, and that 60-70% means people are your biggest asset. I’m looking forward to empowering that asset, having the respect for their full potential, and attracting and retaining great talent as Q4 moves from strength to strength.”
- Donna de Winter