Most startups don’t have a formal investor relations process unless they’re actively raising money. But the real work in nurturing your investors takes place before and after you accept capital.
Here are five tips for maintaining good investor relations.
1) Email Updates: Status or Newsletters
The number one component to keeping good relationships is communication, and making sure your investors have up-to-date information. One of the best ways to do this is to send out periodic updates to investors or potential investors. This can be done with an email newsletter that includes recent company press and events, or you can send specific updates to current investors detailing your progress toward reaching milestones and ongoing projects within the company.
If they know about them in time, investors can often help you with issues you’re facing. They may also refer other investors to your company later on.
Email is not dead and can make a good reference later on, when you need to have board meetings or measure long-term progress.
2) Keep a Unique Contact List of Investors
Most seed and series A-funded companies end up with some form of spreadsheet of investors, categorized either by the amount invested or by their connection to the company. It is important to keep these contacts separate from others for any hope of organized “investor relations” to exist.
One way to do this would be to set up an email address linking to all current investors such as investors @yourcompany.com. You can also set up a separate contact list in Mailchimp or another email marketing program. Try to have as much information on hand as possible, and update the list monthly.
3) Be a Contributor to Investor-Friendly Media Outlets
Often investors or potential investors want to hear your thoughts or follow what you do online, but if you only focus on your industry-specific area or popular tech blogs you could be missing potential fans and investors as readers.
Try to figure out which media outlets are being read by both current and potential investors and see if there is something you can contribute there.
4) Help Investors With Deal Flow
One area that venture capitalists and private equity investors struggle with is finding really good deals, or diamonds in the rough. Word of a good deal or investment opportunity can easily create a herding problem and a so-called “hot round,” which can then spike a company’s valuation based upon speculation.
Meeting frequently with investors to discuss how a particular company is doing or insights into different industries can be helpful to both parties. If you can figure out which types of things interest certain investors, try to help them by scouting new deals or forwarding introductions. Founders often know more about dealflow than they realize, because their focus is on building companies, not evaluating them. Don’t be shy in making introductions or giving an investor a heads-up.
5) Share Your Ideas with the World!
Slideshare could not be any more underestimated as a research and promotion tool, and as an effective way to show off your ideas and knowledge. Blogging about variances and differences in funding from your founder or business owner perspective can be a therapeutic chance to communicate with like-minded investors.
The key is to attract what you want by not holding back. For me, this meant honing in on a key term like “Product Market Fit” and publishing my experience with it.
Maintaining or having investor relations is not as complicated as it may sound. It’s not only for big companies, but for growing one. Clear communication with the investment community doesn’t have to cost a fortune and can improve your amplitude as a founder.