Investors – a pain or a pleasure?
At some point many startups decide to involve investors in their business. The investors provide capital and knowledge – do you give them what they are looking for? Here is our best advice to establish a long-term relationship.
Startup founders have full focus on their business – just as it should be – and it’s not unusual that they forget to take other people’s agenda into consideration. In the worst scenarios founders use people as simple pawns in the achievement of their business goals. It’s sad and sometimes it works well anyway, but sometimes those founders run into people that won’t accept that treatment. It can cost them dearly. In cooperation with investors, it’s important to understand their agenda to make sure you build good relationships for the future.
Understand the investor’s agenda
Why do a person decide to invest in a small shaky startup? From many perspectives, it’s a really crazy decision. Spending a lot of money that can be lost in the blink of an eye. Wouldn’t it be smarter to just buy another luxury vacation cabin, start to collect art or fancy sports cars? No, that’s not the personality you are dealing with here. The people who get involved in startups hope for two things – being part of a cool and mind-blowing journey and of course, getting a big payoff on their investment. Some also want to see themselves as mentors and they feel good about being able to give advice. Isn't it fair enough that you respond to at least one of those wishes? The guarantee for a great payoff on investment is hard to give, but guaranteeing an exciting journey with all its ups and downs, all uncertainties and lucky strikes is much more easy.
No time is no excuse
As we all know, the lack of time is a challenge. Ask any startup founder and their greatest wish is more hours in the day (and more money of course). So, how to – on top of all other work – be available to the kind investor that believes in you and has given you a large amount of money so that you can realize your dream? Just do it, Nike would say. Find ways to give them the feeling of being important (because they are). If you don’t have time for extensive reports every month, create small weekly updates and send them by email. It doesn’t have to be any fancy design, the most important thing is that you involve them in your business. In the same email, ask for advice and reach out for help. Another good advice is to remember the investors – those who are ok to be public – when it’s time for Summer events or Christmas parties. Send them an invitation to show them that they are highly appreciated.
On the day of success – who do you credit?
After more than twenty years in startup business, we have met many different startup founders. Some understand immediately the importance of keeping the investors happy, others treat them as a necessary evil. The latter is a risky path to choose. As we all know – it’s a small world. Always keep in mind who helped you along the way, who supported you with the necessary capital as well as good advice and encouragement. Express your appreciation and we will stay loyal to you. No one knows what the future will bring. Good manners are always a good choice.
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