7 Tips To Build Strong Relationships With Your Investors

by Richard

Your investors are the most important people within your company. They are allowing startups to hire three million workers every year. They are the fuel that allows all this to happen and they will allow you to survive your first year of entrepreneurship. They are the people enabling you to achieve great things. Your team can be the most talented in the world, but without investment, you’re going nowhere.

What you need to know before pitching investors is that you don’t have to be soul mates. All that matters is the business side of things. But it doesn’t hurt to have a good relationship with them.

So how are you going to build strong relationships with your investors?

Look Beyond Finance

If you have to decide between an investor who will give you a huge amount of money and one that will mentor you, go with the latter. Investors bring far more to the table than finance alone. They come with expertise and experience that you otherwise wouldn’t have access to.

Give them a voice and make sure that you demonstrate that you value their opinions and experiences to benefit from the power of mentorship and finance. Investors don’t like to be thought of as cash cows.

Listen to their Concerns

Investors are always going to have concerns regarding the way you are running your business. This isn’t meant as an insult. They are simply bringing their thoughts into the open. They are revealing what they really think. It’s your chance to prove them wrong.

By understanding their point of view you may even discover ways in which you can improve.

Share Your Passions

Remember that your investors are actually investing in you. They want to build a relationship with you as much as they want to build a relationship with the idea. Show how passionate you are about the company and the idea. Let your natural enthusiasm shine through.

Investors are people too and they are just as passionate about your business as you are.

Set Some Expectations

One thing you need to know about investors is that the number one reason for broken relationships is a lack of a shared vision. You need to be connected when it comes what you expect from this venture. The worst thing in the world is ‘irreconcilable differences’.

Discuss with any potential investors what they expect from you. And then you can communicate what you expect from them.

Communication is the Key

The vast majority of investors will not take an interest in the day-to-day affairs of your company. But that doesn’t mean they want to be completely detached from your operations. They want to hear about your progress and how close you are coming to a major breakthrough.

Go beyond the usual investor calls about performance and discuss some noteworthy customers or new partnerships with them. They want to be on the inside.

Be Respectful and Real

Every good relationship is built on mutual trust and respect. You will never make it far if all you can offer is youthful bravado. Be honest with investors when you need help and when things aren’t turning out how you wanted. It will all come out into the open later, so never try to hide anything.

Your investors are there to help you they are not there to judge you. They have as much of a stake in this as you do.

When You Should Cut

What you have to remember is that sometimes relationships don’t work. Not every investor-entrepreneur relationship is a match made in heaven. It may be difficult to turn down the prospect of outside investment, but sometimes this can be for the best. It can be of great benefit if you are willing to be honest with yourself when you are not on the same page.

Most investors will appreciate your honesty and may even direct you to someone else who could be of more use. At the very least, you will not have to deal with a toxic relationship later on.

Conclusion – Working with Investors

Working with investors shouldn’t be taxing. They should be adding to your company not taking away from it. You have to start by deciding what type of investor you want to work with. You may want to bring someone in who can provide you with mentorship, or you may just want the cash.

Just make sure that you get off on the right foot and ensure that you are making a conscious effort to manage investor relations.

Leave a Comment

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept