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Raising funds to finance a business is similar to dating and marriage. It's true.
You woo potential investors, but once they do invest, it's easy to forget that a good, long-term relationship is one that's constantly cultivated.
What happens if you don't meet financial projections? What happens if you need to change your business model or business direction mid-stream due to changes in the marketplace or the introduction of new tech? What happens if investors feel under-served or left out of important events or decisions? Problems, problems, problems.
Keeping investors happy is an on-going process - especially if the road to success is bumpier than you (and your partners) expected.
What can you do to maintain sound investor relationships?
There are a number of steps you can take, but the focus is always on open, honest communication. Stay in touch with your investors. Update them on progress or setbacks. Be proactive and always provide information before investors ask for it.
Investors aren't interested in the day-to-day minutiae of your business so keep the focus of your reporting on the big picture including:
Also keep in mind that communication isn't a one-way street. Your investors are interested (very interested) in your company's success. Ask for help and guidance when appropriate. Make your investors feel needed, a key part of the company.
Ask these associates for networking contacts, specific expertise or to simply be sounding boards for planned changes and activities. Consider investors as more than capital-generating entities. This is human capital used for the benefit of all.
Asking for input also helps manage investor expectations. Investors who're asked for input are more understanding when the company delivers lower than expected results.
The bottom line? Your investors aren't mushrooms. They don't thrive in the dark. Great investor relationships are based on consistent and open communication and a true partnership.
Make your investors more than financial stakeholders and you'll have access to expertise, experience and new ideas.
You'll also maintain a stable investor base - one on which your company can depend.