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How To Keep Investors Happy After Raising Capital

Part of being in a healthy relationship is having good communication and the entrepreneur-investor relationship is no exception. After you’ve raised capital, you might forget what it takes...


After you’ve raised capital, you might forget what it takes to keep investors satisfied. Investors want to know how you are tracking to meet short-term goals, how far product development has come and how you’ve dealt with that issue you faced a while ago. They are—just as your customers and employees—a part of your company.

So, here’s a look at four smart ways to keep investors happy.

 

  1. Send regular updates.

    This is the most obvious one and the basis for a good relationship with investors. Keep investors informed, tell them how things are going. Once a month is adequate for most investors, along with additional updates pertaining to noteworthy events. Check with your investors and ask them what frequency of communication they prefer. Give them a short and to-the-point overview of the state of the business. Don’t write a two-page story. And use data to support your points.

  2. Share good, and bad, news.

    It is great to share good news with investors to proudly present them what you have achieved. However, don’t hesitate to share negative news. Be honest, even though they are not going to like what they will hear. And, if possible, present a solution at the same time. This shows you are not reluctant to admit something went wrong, but that you’re able to cope with setbacks and roll with the punches.

  3. Share business challenges.

    Besides the capital investors brought to your business, they will also bring a lot of knowledge and experience. So, don’t hesitate to ask for advice if you’re struggling with something. They care about your business too, and have backed it up with cold-hard cash, so they will more than happy to help you overcome business challenges.

  4. Be organized.

    The life of an investor is extremely busy. Steve Blank, a Silicon Valley serial-entrepreneur and academician, attests to the time-crunched nature of most investors and high-profile entrepreneurs. It can be hard to get busy people to see you he explains. But when he does take meetings he suggests, “I’m having these meetings because someone is asking for something from me – my time – and they think I can offer them advice. If I’d had infinite time I’d take every one of these ‘can I have coffee’ meetings. But I don’t.  So I now prioritize meetings with a new filter: Who is offering me something in return.”

    Therefore, it is your task to make sure correspondence is organized and available when your investor needs it — offering them key information at a high-level view. If you refer to an email or a document you shared a couple of weeks ago, include that in your email too. Don’t make investors search for answers. Keep documents, a running list of status updates, financial figures and other information in one place where they can easily access it.

 

This article has been edited and condensed.

Daisy de Vries is the Content Manager at Equidam, an online value management tool for small businesses. Her passions are startups, writing and technologies. Keep investors up-to-date in a consistent and efficient way with the Equidam valuation report. The report gives a clear overview of the performance of your company and enables you and your capital providers to understand and manage the value of your business. Connect with @equidamtweets on Twitter.

 

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