Maintaining a good relationship with your investors is just as crucial as maintaining good relationships with your clients... sometimes even more so. Your investors may be able to assist you, provide advice and experience, and are just as invested in the success of your business as you are. Consider them as your allies.
Investors' support extends beyond financial considerations to include moral support and a personal interest in seeing you succeed. You need to be proactive in maintaining this relationship as your investors will expect you to keep them up to date on all that is happening inside your startup. This isn't a difficult task if you know how to approach it correctly. Sure, keeping track of emails, meetings and calls takes time and effort, both of which may be in limited supply during the early phases of your startup. However, this is where the mentorship and experience of investors may be quite beneficial, which is why you should begin building that exact relationship as soon as possible.
1. Two-way communication is important
Initiating and fostering discussion with investors is an excellent method to learn about the risks they are willing to face in the future or when you have a new “crazy” idea on your mind. Investors always draw logical inferences based on their knowledge and expertise. You can understand their thought process and align your thinking correctly by listening to what they have to say. Knowing their opinion on a specific case will help you make that decision.
Keep them informed. Investors will never mess with your company's day-to-day operations. They will want you to lead without relying on them for guidance all the time, if necessary, they will offer advice or assist you in getting out of a bind. They do, however, want to know what's going on and how your business is progressing. Don't misinterpret that for anything else, and always allow for two-way communication.
Keeping a synergistic relationship with your investors is no different from maintaining a synergistic relationship with any other important business partner or client. Respectful communication and a positive attitude are always preferred.
Always respond to your investor’s requests and emails. If they don’t hear from you, that's a bad sign.
2. Information flow
As the business environment is constantly changing, it is critical to keep your investors informed and up to date. This is why you should supply them with well-timed and relevant information.
For example, public companies are expected to offer information to their shareholders, which is why financial reports are published regularly.
It's the same with your startup. You must keep your investors up to date on your financial situation. A monthly KPI update and a quarterly financial report is a must in our portfolio management process, which helps us track your company’s performance.
3. Regular meetings
The easiest way to keep a solid relationship with your investors is to meet with them or have a Zoom call frequently. Even if both sides are too busy to quickly catch up every week, you should have a meeting once a month to share information that will help your business succeed.
These meetings allow both sides to ask questions and discuss several topics at the same time. Written communication might be useful but having someone in the same room as you - talking about strategies, development, and problems on a more personal level can help you get far more insight.
While VCs have a portfolio management process in place, keep in mind that your startup is not the only one they are assisting in their growth, so be proactive and set up meetings.
Emails are a typical method of keeping in touch with investors, achieving three basic goals:
- To let them know how you're spending the funds they put into your startup.
- To let them know if you're having any problems and ask for their help or suggestions.
- To show your traction and instill trust by providing a compelling cause for them to continue to invest in your company.
What to include in your emails:
Problems and challenges
One strategy to keep investors informed is to send out email newsletters that include links to corporate news, events, and press releases. They are, however, less popular than email updates, which allow investors to reply instantly and act if necessary. Customers are more likely to get newsletters as part of content marketing campaigns. Industry reports and articles, special deals, company milestones or awards, links to company social media accounts, or new product releases are all examples of educational and promotional content found in newsletters. However, all this information is valuable to investors as well and they might choose to subscribe to it if they find it useful, which might save you a lot of time.
6. Socializing outside of work
To make any relationship work, you must first get to know the person with whom you are communicating. Socializing with your investors outside of office hours is always a good idea. And don’t only talk about work; no one enjoys talking about work all of the time. Learn about the people who believe in you and why they believe in you. Invite them to your company's gatherings and events or get your team and join theirs. You can ask both teams out to dinner and for drinks. A deeper conversation is the best way to strengthen personal connections and relationships.
Create a template and a schedule that includes all key information to streamline your process and ensure consistency in your contact with your investors. Keep in mind that investors need to know both the positive and negative news. They are the people who can assist and support you, and if you do not make an effort, your business may suffer. Every update reassures your investors that things are going well and that you are committed to the success of your startup.