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Business is all about fostering healthy relationships. Before you can even begin to think about curating a genuine rapport with clients or employees, you need to foster strong relationships with your investors.
Not only will investors provide that capital that allows your business to launch, but they can also offer valuable insight and mentorship. Once you find investors who align with your brand and believe in your product, you’ll want to do everything possible to maintain that relationship. Developing relationships early, communicating regularly, celebrating your success, and sharing your failures is essential.
If you aren’t sure where to start, these ten tips and tricks from businesses can help you connect with investors and build authentic relationships that will support your business for years to come.
1. Start Developing Relationships Early
Start networking and developing relationships early. The broader your network, the more connections you’ll have when finding investors for your business.
“Seek to build solid relationships before you even start looking for funding to launch your business,” advises Kris Cody, CEO of Paka. “When you have a strong personal connection with the people who choose to invest in your business, they are more likely to believe in you, share useful advice, and celebrate your success.”
Network at in-person events and connect with like-minded people in your field on social media. Most start-ups find initial investors among people they know. The more connections you have and relationships you curate early on, the easier the process will be.
2. Establish Yourself as An Expert in Your Field
Investors want to work with people they believe will succeed. Show them you are someone to believe in.
“Your personal brand is just as important as your company’s,” notes Susan Kim Shaffer, President and Co-Founder of Pneuma Nitric Oxide, “Create an online presence where you are an expert in your field. Publish articles on topics related to your business, speak on relevant podcasts, and share tips on social media. Investors are more likely to put their money behind you when they’re confident you know what you’re talking about.”
While you curate connections with others in your field, establish yourself as an expert. Write articles and find online journals or print magazines to publish your work. Have a presence on social media where you discuss your area of expertise.
3. Clearly Articulate Your Company’s Core Values
In initial meetings, you’ll be expected to present your company’s mission to potential investors. Take the time to clearly define your company’s mission statement and include it in your presentation.
“You want to work with investors who align with your company’s core values,” remarks Michael Baghoomian, CEO of Muscle MX, “In your initial meetings, present your brand’s mission clearly and repeat the message to ensure it sticks.”
Use your mission statement as a touchstone in future meetings. Regularly returning to your core values will ensure you and your investor stay aligned as you move forward together.
4. Set Clear Guidelines for What You Need From the Relationship
Before your first meeting with a new investor, get clear on your expectations for the relationship. What type of investor are you interested in working with? A passive investor can provide financial resources, whereas an active investor wants more involvement in your day-to-day operations. Make it clear what you hope to gain from the relationship from the very beginning.
“It’s essential to develop a trusting relationship with your investors from the start,” states Morgan Rogers, Director of Marketing at Luna Grill, “Think of what you’ll need from this relationship projecting two to five years into the future. What are the potential costs? Are there any roadblocks you forecast? Develop a financial statement to reference and communicate your expectations early on.”
Map out the potential costs over the next few years, and be clear about what you need. Remember, you’ll have to pay your investors back eventually. Have a clear plan on how and when that payment can be expected.
5. Communication Is Key
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Communication is an essential ingredient for any healthy relationship. Regular meetings with investors can help you discuss strategy and business developments on a personal level.
“The best way to maintain healthy and happy working relationships with investors is to keep a line of communication open. Schedule regular meetings either in person or on Zoom. Emails are a great way to share information, but having that face-to-face connection keeps your relationship more personal,” says Stephanie Venn-Watson, CEO of Fatty15.
Your business is most likely one of many companies investors are working with. Take charge of setting up meetings. Find what works best for both of your schedules, whether that’s checking in monthly or quarterly.
6. Share Updates Regularly
Before meetings, send investors reports and analytics you plan to discuss. Prepare KPI or key performance indicator reports and create a monthly newsletter that allows investors to peruse noteworthy happenings at your company quickly.
“Investors hope to see an ROI and will want to see your financial reports regularly. Be diligent about sharing KPI reports, noteworthy achievements, media mentions, and other relevant data,” comments Yusuf Shurbaji, Co-Founder and Managing Partner at Prism Fly, “You can send a newsletter monthly or quarterly to all investors or send them personal emails. Just ensure you set a schedule for reports and stick to it.”
Regularly presenting this information doesn’t just serve your relationship with your investors. It also helps you evaluate your goals to make the right decisions to stay on track.
7. Don’t Avoid Difficult Topics
It can be tempting to only share successes with investors, but they may recognize you aren’t being fully transparent if you avoid sharing challenges or mistakes with them. A healthy relationship with investors requires trust.
“In business, not all months or years go how you expect them to. You are going to make mistakes, experience losses, and encounter challenges,” reminds Saad Alam, CEO and Co-Founder of Hone Health, “Be honest with your investors and share your plans to move forward. Owning up to your mistakes is just as important as celebrating your success; it shows investors that you trust them with the truth and are always working to improve.”
Investors understand that being in business has its challenges. They want to see how you embrace setbacks, learn from your mistakes, and find creative solutions to power through.
8. Be Open to Advice and Feedback
When you develop a healthy and trusting relationship with your investors, you are more likely to receive helpful advice and feedback. Many investors have been in your shoes at one point or another and experienced very similar struggles.
“When you have strong relationships with active investors, you can utilize their expertise,” says Brandon Adcock, Co-Founder and CEO of Nugenix, “An investment of mentorship and ideas can be just as valuable as the capital they provide. They likely have encountered similar challenges to the ones you are currently facing, and their feedback can help you find a creative solution faster to get your business back on track.”
Be open to receiving advice and insight from your investors. Ask for their advice during monthly or quarterly meetings. Allowing them to provide value beyond their financial investment will only strengthen your working relationship.
9. Remember, You Are the Boss
While investors often offer sage advice, know they are not telling you how to run your company. They are simply seeking to point you in the right direction. You are the leader, and final decisions always remain with you.
“Set clear boundaries with your investors early on,” states Jaedon Khubani, VP of Business Development at Copper Fit, “Many times, investors offer advice and can provide valuable insight. Remember, you are the boss. You know what’s best for your business. The decision of what to do next lies with you and you alone.”
Being open to receiving advice and ideas from investors doesn’t mean they have the final say. When you ask for advice, make it clear to investors that, ultimately, you’ll make the final call. Investors want to see that you take ownership of your business and know how to take charge.
10. Get to Know Them Outside the Office
Curate a relationship with your investors that goes beyond the workplace. Get to know them as people and seek to establish a genuine friendship.
“Get to know your investors outside of the office,” says Will Blum, Founder and CEO of Bluebird Hardwater, “These are people who believe in your brand and whom you’ll be working with for years. Take them out to dinner, ask them about their families, and discuss topics beyond work you both enjoy. Cultivating a genuine connection beyond business is critical to building trust with your investors.”
Your investors are people first. When they see you genuinely care to get to know them, it will establish a bond beyond monthly financial meetings. When you curate authentic friendships with the people you surround yourself with, they will likely want to continue working with you and help you extend your network.
To Conclude
As with all relationships, fostering a solid relationship with investors requires time and attention. Heed the advice from the CEOs who have spent years curating healthy relationships with their investors.
When you start your relationships early, develop authentic friendships, and provide regular updates, you will develop long-lasting relationships with investors.
