What is the purpose of a roadshow in capital market transactions?

The primary purpose of a roadshow in capital market transactions is to showcase the issuing company's value to potential investors. During a roadshow, company executives present detailed information about the company's financials, business model, growth prospects, and market position. This allows potential investors to better understand the investment opportunity, assess the risk/reward profile, and evaluate whether to participate in the upcoming offering.

Additionally, roadshows help generate interest in the securities being offered, allowing the company to gauge investor appetite and, ultimately, set the pricing strategy for the offering. Engaging directly with potential investors also facilitates a dialogue that can clarify any questions they may have, reinforcing the company's message regarding its value proposition and future potential. This direct interaction is crucial in building trust and confidence in the offering.