Chad Williams, Chairman and Founder
Being a CEO is a hard job. It involves long hours, making thousands of decisions, and managing teams – including the board. On top of that, running a successful mining operation tacks on interacting with shareholders, regulators, government bodies, outside authorities, and dealing with industry woes. As the head of the company, it’s your job to wear all the hats you need to in order to get the job done, but the reality is, there are people who can help reduce the strain. With my more than 30 years of experience, and 10 years as Chairman of Red Cloud Mining I’m offering a few lessons that I’ve learned along the way.
1. PLAN AHEAD, PLAN VERY AHEAD
The rule of thumb I tell CEOs is from the moment you want to do a financing to the moment that you close, you should plan that it will take about six months. Companies often approach us with short timelines that are often unrealistic. Even in the hottest markets, with the most compelling value proposition — it can take months to raise money.
2. DON’T BE GREEDY
When the time comes to look at M&A proposals, it not only will be extremely time consuming, but you need to constantly check in with yourself to make sure your judgement isn’t clouded. There are often hundreds of ideas that will be put in front of you before you find something worth moving ahead with. Ian Telfer, of Wheaton Precious Metals once told me that “any deal can be closed if you throw in some warrants”. This way there’s upside left for the vendor.
I’ve also learned to make sure that the board member from both sides of the equation are on side from the very beginning. I’ve had lots of deals fail in situations where we thought boards were on side, but in the eleventh hour they decided not to do a transaction. Be realistic to make sure the transaction is fair for all parties.
3. DO YOUR DUE DILIGENCE
80% of M&A transactions fail because of due diligence issues – from technical, to legal to financial. Once you’ve agreed on terms, make sure you kick off that process as soon as possible – do it rapidly, surgically, and methodically.
4. CONSISTENT AND PERSISTANT
Work on your story, find what makes you different, refine your messaging early on, then stick to it. Market your story in good and bad markets – when you have no news, not just when you have ground-breaking numbers. If investors don’t see you, they think you’re not busy, and if you’re not busy, you’re not creating value. Strike a balance to make sure the right eyes are on your story with a cadence that makes sense. For some groups, every six months is just right, while for others it could be overkill. Understand the reality that companies don’t always have good news – make sure that if you’re hit with a negative narrative that you deliver this news quickly and stay on your messaging.
5. MARKETING ISN’T ONE SIZE FITS ALL
The truth is there’s not just one method or one market or one region that works all the time. You must market to a variety of different investors in different locations in a variety of formats (from webinars to in-person events). Go into events with a humble perspective that not everyone is going to care about your story, and that if you are lucky 50 per cent of your audience is going to listen intently. Again, be consistent with your messaging, and consistent with your marketing strategy, because the diversification of avenues can have ebbs and flows of success. We recommend public mining CEOS devote a week every month to marketing. Always remember: Once you have the capital you need, your due diligence is done, and your marketing dates are booked – the most important person is the investor that took a chance on you. Build trust throughout the process with all your stakeholders and use your trust to educate potential investors who may be new to investing in mining companies.
If you can deliver on your promises, then you just might have a shot at getting more money in the future, and if you’re open and transparent, you’ll win loyalty over and over again.
At Red Cloud we specialize in financing, M&A, and marketing and media. If you’d like to explore any of the areas mentioned above with our teams, contact us at redcloudsecurities.com or redcloudfsstag.wpengine.com For the original video of Chad’s presentation visit: https://www.youtube.com/watch?v=IwPwRPhJU58