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You’ve got the funding. Now what? 5 ways to keep your investors happy
Never underestimate the importance of keeping your investors happy. It’s a long-term relationship and you’re going to need to support each other. – Goncalo de Vasconcelos
Every growing business gets to a point where investment appears to be the most viable option to piercing through that growth ceiling and catapulting themselves into the next cycle. So, you decide to seek funding. You work hard. You elect a team of supporters to help get your house in order. You pitch and perfect. You soar through roadshows and you finally land with an investor (or two) who believe in what you can do and who are willing to put their funds behind you.
Doesn’t that feel great?
While business leaders enjoy the glory of soaking in the pleasure of successfully receiving investment, the most critical business relationship to make or break that glory is about to begin.
Keeping funders happy.
We share 10 tips to keeping your investors happy.
1. Updates that give value
Alicia Syrett, Founder and CEO of Pantegrion Capital, is a serial investor into early-stage growth companies. She writes, “As an early stage investor, I like to stay in touch with my portfolio companies regularly, but I don’t need to see extensive reports on a daily or weekly basis. A clear and concise monthly or quarterly update keeps me in the loop and gives me the opportunity to contribute to the business as needed.” And part of the things she expects to see from the companies she has invested in includes milestones achieved, cashburn & runway, major metrics which give a snapshot of the business and its place within the industry, team changes and any relevant areas where her help is needed.
As an investible business, find out what the critical updates are that your investors expect of you. This includes how often they want to know about it, how involved they want to be in the day-to-day, and how they can contribute to help drive your business forward.
2. Disclose to keep close.
Nothing worries investors more than hearing bad news about their investment. But that doesn’t mean you should hide it. Surround them with positive news that balances out any negative press your business may be experiencing, and is completely relevant to expanding your growth and progression forwards. And when the bad news does break, be sure to keep them informed as soon as possible. Finding out via 3rd party sources never creates a great impression. And when the bad news has to be shared, be sure to follow it up with a clear action plan as to how you plan to rectify the situation.
3. Seek their Counsel.
Nothing makes an investor happier than feeling involved and a critical part of a business growth plan. Take as many opportunities as you can, when appropriate, to seek their counsel – especially when it comes to strategically planning your next steps, managing ongoing risk, sharing their own experiences from being in the very same position you find yourself in now.
But be careful of appearing needy – although they want to feel involved and valued, be careful not to create the impression that you’re unable to move at all, without their input.
4. They’re business partners. But they’re not your problem-solvers.
All too often, a critical mistake made by first-time fund-receivers is to run to an investor for help before they’ve tried to rectify the issue, or seek a solution first. They are not the people to step in when your plate is full – they’re there to see how you intend to grow your business, with the capital help they’ve invested to help you get there. Having said that – they’re anything but hands-off. Remember, they have most likely been where you’ve been – and they understand the risks and challenges of growing a business. Alongside their capital input, they bring a wealth of knowledge and experience that you can tap into. If you only see them as a fixer – you’re missing out on a critical success point – and you’re in grave danger of alienating one of your most important stakeholders.
5. Be Organised
This may seem all-too-simplistic – but it’s one that we want to bring to your attention even so. Your investors are busy people. They have snapshots of moments in which they can engage and advise. Flooding them with unnecessary, disorganised information not only results in frustration, but non-action too. If you’re emailing them about something you’ve sent them previously, share it again. If you’re sending them updates, send a high level version, but give them an option to delve into the detail if they need to.