Dropping the Ball
Most startups today have solid plans for customer discovery, going to market, their business development, fundraising, and account management.
But what you don’t hear about very frequently is a startup’s plan around how to manage their investors, because a lot of startups feel like they no longer need help from their investors once they’ve finished fundraising. But I would argue that this is exactly when startups should be engaging their investors the most, keeping them excited about what you’re doing and filling them in on what’s next.
There are many reasons for this, as most of your investors:
- Know other investors and can help connect you with them the next time you’re fundraising.
- May be able to participate in your next round of fundraising.
- Can act as a reference for you for other investors or when you’re trying to sell a large client.
- Want to provide advice when you need it.
- Like to step in to help when you’re in an emotionally difficult time or financial crunch.
- Will connect you with other startups or large companies who can be helpful to your business. For instance, at GAN Ventures, we had over 1,000 startups approach us for funding last year, and one of our favorite things has been connecting our portfolio companies with other startups who approach us to see how they could do business together.
But here’s the thing. If you don’t consistently keep in touch with your investors and decide to call them up a year after your last contact, they won’t be able to help you. Not because they don’t want to. But because they won’t have the needed background to help get you where you need to be. And they’re people, too. When you call them in a crunch, they’ll probably just feel like you’re only calling when things aren’t going well and will end up feeling somewhat used.
So in order to have a relationship with your investors that builds trust and establishes a rapport that gets them excited to help in good times and bad, here are some of the things I recommend all of our investments do. Added bonus: These are great ideas for relationships beyond your investors, too.
Keep Them Connected
Share a Monthly or Quarterly Update
My partner, Reilly, and I have come to expect a newsletter specifically geared toward all of Western Rise’s investors every month. They’re one of the GAN Ventures portfolio companies and the newsletter includes how their sales are going, any changes to the team, marketing statistics, and high-level, important issues. It might seem counter-intuitive, but because we know any challenges they’re facing, we actually feel more emotionally invested in them, and it allows us to know how we can help. Another one of our investments, Nicolette, sends us video updates with the same information, which is just as effective as the newsletters.
Demo Your Product
Your investors are constantly talking about you to their LPs, community, and friends. They’ve invested in you, which means you are the reason they get up and do what they do every day. So when you have something exciting to share related to your product, make sure to specifically share it with your investors. Last week, Dev/Con Connect launched its product and had a specific demo just for all their investors. And it did three things: 1) Got us even more excited about their product, 2) gave us a talk track to talk about what they are up to, and 3) allowed us, as investors, to see who else invested in the company, which created a bit of a community amongst those of us who had invested.
Share Great News Before Anyone Else Hears It
Think about a good friend. If she announces on social media that she’s going to have a baby and didn’t call you before she posted it publicly, you might be a bit perturbed. The same idea goes for your investors. They want to know when something is about to happen before everyone else does. This past week, Nicolette had some awesome news, and Reilly and I were the first to know. It made us feel like we were part of their team.
Share Tough News Before Anyone Else Hears It
Another one of our portfolio companies is making a substantial change to their business model. And the best part about it is that they’re three months away from rolling out the new product. They let us know about it even before they started building it, just to get our advice. They didn’t have to share that with us; we aren’t Board members. But they did it so that they could get our buy-in, giving us an opportunity to share our input. And whether we completely agree with the decision or not, it made us feel invested in their success because we’ve been “at the table” as they’ve been transitioning the product.
Have a Yearly Check-In Call with Each Investor
You would be surprised how often this doesn’t happen. But a yearly check-in allows you to do what you’re already doing in your monthly or quarterly update, but with an immediate feedback loop. We just had a check-in with Work Today. We were able to hear how their next fundraise is going and got filled in on exactly how we could help. Plus, it reminded me to hang out with one of their team members, Joe, when I was in Los Angeles last week and it turned out to be the highlight of my trip. One other thing I recommend doing during a yearly check-in: Share any expectations you have for the investor and ask what expectations they have of you. You’ll both walk away happy with how the relationship is going.
What Else Are You Doing?
While this list might seem simple, I think these are some of the most helpful things you can do to keep a solid relationship between you and your investors. But of course, I’d love to hear anything else you’re doing. Tell me how you’re keeping your investor relationships solid for the long-term, and I would love to share those in one of my future notes to the GAN Community.