Building relationships with Investors
Building relationships with investors is the most important part of raising funds for your growing business and probably the hardest. This is not something that can be done overnight, it’s a slow-burning relationship and that requires finesse, planning, and all of your time. Below are several strategies for building deeper connections with investors that can lead to success in fundraising.
Introduce them to other organizations
Because they are continuously meeting people in similar networks, it’s especially helpful and interesting to be introduced to people in different circles and networks, which allows them to potentially branch out.
Provide useful feedback
Let them know how they’re doing and ways that they can improve. Typically, companies they work with want to do well with them and don’t want to upset them, so the investor/donor rarely gets radically candid feedback.
Support Investors in filling their open job descriptions
Aiding in their search to find the right people to join their team will add tremendous value.
Become known as someone with whom investors want to work.
An engaged investor base will help with introductions, referrals, and advice. Have a disciplined management reporting approach and you’ll differentiate yourself from most other entrepreneurs.
Continue communicating with investors that have turned you down.
Even if you haven’t fully closed the deal with a specific firm, it doesn’t mean you should give up the fight. Keep growing your relationship with all investors you have contact with because you are building a lifelong network of support that you may need in the future.
Update them Monthly and Start doing this Early:
Your goal is to have each one invest in your next financing round. Start with the bad news and end with the good news. This gives your investors confidence in the rest of the updates you provide.
Remind them of your previous targets and state whether they were reached.
- Share exciting news like product releases, big deals signed, new hires made, editorials published, and news articles about you or your company.
- Share monthly and quarterly financials and core KPIs, and then give context around the good and bad of those numbers. If you can, provide actual versus budget comparisons.
- Share strategic objectives to help them understand where you’re going and the challenges you are and will face.
- Ask for help if you need it. They want you to succeed.