Our approach to the fundraising journey has one clear goal in mind: reducing the time and effort required for startups to raise capital by building relationships with investors and making every transaction a win-win.
We do this by using a systematic, 6 step approach to supercharge capital raising, which you can learn more about here.
As you may already know, investors can play a major role in supporting your startup, so it's essential you know how to be proactive in this process through nurturing investor relationships. While cultivating a relationship may take time, they can ultimately shape how your success is paved!
To help, here's your pocket guide to nurturing investor relationships.
1. Start Investor Relations Early
(The worst time to get to know someone is when you actually need them!)
The ability to foster multiple meaningful investor relationships is a crucial aspect for raising capital and cementing your business. Beyond funding, a whole range of other benefits exist such as:
- Accelerating investment timelines.
- Networking with other investors and industry professionals.
- Greater access to feedback from experienced investors.
There are many sure-fire ways to increase your business network, with the majority of opportunities across digital platforms, such as:
- Contribution to media outlets: including industry specific blogs or groups to showcase your business to potential new investors.
- Looking beyond mainstream online hubs: research what forums or events are popular that will help you grow your business investor base.
2. Personal Preparation
Your time with investors will be limited, so be sure to have your investable points and Pitch Deck easily accessible. We recommend using this template to wow investors and help you stand out!
There is no such thing as being too over prepared. The more detailed your answers, the more confident investors will be.
Know your stats and your industry, ensuring you memorise key metrics and how they'll change with funding such as:
- Customer conversion rate
- Customer acquisition cost
- Average revenue per customer
- Average customer lifetime value
Also, remember to explicitly state what the investor's money will be used for, to reassure them you have everyone's best interests at heart. Studying the competition will also help to further differentiate yourself from the pack, find your edge and make sure the investor knows about it!
3. Know your Investor(s)
Investors have different experiences and interests, which will ultimately shape the value they can bring to your company and any biases, qualities or metrics they prioritise. Individual investors representing VCs or organisations may align opinions differently to your perception of the organisation, so research is essential.
Keep these questions in mind when you're searching for the right investor for your startup:
- What sector have they/do they currently invest in?
- Do they have any current special areas of interest? (check their blog or recent news articles)
- What stage of the business do they typically invest at?
- How much do they usually invest?
- How many investments have they made this year?
- How many successful exits have they had in their portfolio?
- What is their expectation of returns from their investments?
With this additional information, you can tailor your communications accordingly, giving you the greatest possible chance of wowing them!
4. Give & Take
A relationship is mutual, so don't be afraid to ask for help from your investors; but always keep in mind how you can give back to them.
How can value be mutually shared with an investor?
- Even if a potential investor declines to invest, you can still cultivate a relationship - ask for their advice or feedback for improvement. Coachability is a desirable trait in the eyes of any investor, and can lend itself to further conversations.
- Investors may need help with the success of their portfolio. Offer to help them or their companies in any way you can.
- Investors appreciate connections with other high value investors, advisors and founders. If you know someone amazing that could help them, off to make an introduction.
- Investors can often direct you to appropriate contacts within their business network, which will undoubtedly benefit your startup in the long term. A push in the right direction can be just as useful as a direct referral.
In return, you can look to keeping your investors up to date about events in your network, interesting articles or relevant industry reports. Let them know you're willing to return the favour!
5. Building Trust
Once you've established a connection with an investor, the most important step towards securing the relationship is building trust. Here's how you can go about strengthening it:
- Treat the investor like an extended team member, by keeping them in the loop and asking for their advice. A shareholder update like this is the perfect way to let your business network know exactly how your startup is progressing.
- Being open and transparent about what is happening with your startup is crucial: don't be afraid to let your investors know about any changes or shocks you're facing.
- If your forecast looks rocky, let your shareholders know in advance, but end the communication on an optimistic note. Keep your shareholders up to date and confident in your ability.
6. Persistent But Measured Communication
Regular communication with your key investors is necessary and how you go about doing this is important. Do not, however, spam investors with random information evey day as you do not want to be perceived as desperate.
Many of your interactions will be online, so follow these tips to ensure your messages are worthwhile:
- Don't underestimate what can be achieved through online channels. Remember to stay professional and maintain a high standard of digital etiquette: make a point to personally respond to emails in a prompt matter.
- Make sure you follow up any face-to-face interactions with an email. If an investor has helped or given you their time, always thank them and let them know of the outcome.
- Avoid communicating through too many channels: keep your addresses succinct and followable.
- While persistence is important, patience in waiting for responses will get you a long way! Don't be afraid to follow up, but give the investors time as they are often extremely busy and fielding a lot of incoming communications.
For more detailed information about how best to Nurture an Investor, including an in-depth guide: