Once you’ve established your investor relationships, it is important to communicate progress and keep your investors on board.
Showing momentum is everything
This seems pretty obvious, but it bears repeating: good news will drive engagement. This doesn’t mean hyping everything you do, but it does mean portraying yourself in a positive light. Ideally, you want to touch base with a potential investor at least once a month, with some real tangible progress. After a while, people will join the dots and assume that your business is gaining traction before you even start talking.
Things worth communicating
The golden rule for founders here is:
Value your potential investors’ time
Don’t waste it with things they won’t care about. Here are some of things we’ve learnt go down well:
New team members – especially if they have strong expertise
Product sales/partnerships – with potential to scale
Product features – big, relevant updates
Changes to the market – particularly legislative, macro-investments
That’s not to say there aren’t more, but this is the level of ‘news’ that is worth sharing – meeting up with someone to tell them you’ve hired a new junior developer is not really big enough.
On top of that business-related ‘good news’, you can then work your own network to find something hyper-relevant to their interests. For example:
A link to an interesting rival/market report
A connection with a potential partner
A sales lead they can immediately action
Showing you can add value to everything else they do is a demonstration that you know how business works – that you can hustle.
Making the connection
Now you have some good news to share, here’s an example of how you could plan to pitch a connection for a second time:
Intro Email –
Hope you’re keeping well?
I bumped into Fred (CEO of Company X <weblink>) the other day and he mentioned they were looking at their CRM system. I mentioned your CRM, and he said he’ll take a look at it. Do you want me to do an intro email?
Nudjed is taking up most of my time at the minute, we’ve just taken on 3 new devs to handle our B2B customers.
If you have a spare slot in the next fortnight, I’d love to sit down for a coffee (hint – I’m probably going to pitch you for investment!). If that sounds like something you’re into, we’d love to have you on-board!
Let me know what you think?
All the best,
If Bob decides to message back in the positive, move to step 2. If not: apologise, re-validate him as an investor, and connect with him in a month if it’s still worthwhile.
Remember the rule, though –
Value your potential investors’ time
At the meeting
When you do sit down to talk about investment, be prepared. In fact, be over-prepared. 90% of the work you’ve done may never get shown in the meeting you make it for – but three weeks later, in another meeting, someone will ask about your projected cost of acquisition in year 1, and you’ll be able to pull up a spreadsheet and play with the figures in front of them.
There are two reasons you won’t close a deal:
Do everything you can to ensure it’s never you who is not prepared.
Full Disclosure: At Nudjed, it’s almost always been us who were not ready. That’s why we’re sharing this roadmap with you; so you can learn from our mistakes.
Things you should definitely have ready for every investor meeting:
A 2/5/10/30 minute pitch: tell your story, explain the product.
Rough financials –
A reason to invest immediately. Hint: Make them feel like you can do it without them.
An investable plan –
Always answer honestly; even if you’re ashamed of it. If you’re embarrassed, improve it. And always, always ask the awkward questions – the ones you’d prefer to avoid.There’s nothing more important in an investment relationship than full disclosure.
You can find the previous part of The Startup Starter Kit, ‘Building An Investor Network’, here.
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