Summary: When adequate funds are the only thing that is stopping your startup from becoming successful, you might want to think about establishing good relationships with your investors.
Entrepreneurs put in their immense effort and hard work in pitching their business idea to angel investors to bring them on board because the key to success for most startups is having funds for the growth of their business.
However, a deal is never done when it comes to dealing with investors. If you have wooed your investors once, it does not mean you won’t need them again in the future. Investors with their lots of experience can offer incredible insight and resources that can get your startup business on the right track.
According to experts, nearly one-third of the startups shut down because of a lack of planning about the proper usage of their funds. This leads to investors losing interest and credibility in their business venture at the very early stage. Many entrepreneurs often hire a business coach to help them navigate the rough waters of the business world.
Managing investor relations can make a huge difference to your business. As an entrepreneur, it is your responsibility to strengthen ties with investors to position your current business for success. While a strong relationship can help the startup to grow rapidly, one wrong move can end the game for you.
Therefore, it is highly essential for you to maintain a working, productive, and winning relationship with your investors, even if they are not friendly.
Here are six pointers that will help you to build a strong and cordial relationship with your angel investors:
1. Don’t Choose Investors Solely for Financial Purpose
Investors can provide not just funds, but also their valuable guidance and experience to accelerate your business. Acknowledge the relationships and expertise investors will bring to your business by giving them a voice. Listen to their underlying apprehensions and concerns. Encourage open conversation and clear dialogue so that you can learn more about their risk-taking appetite. You can consult with a business coach as well to understand how you can maintain dynamics with your investors.
2. Set Clear Expectations in the Beginning
An entrepreneur and investors need to be on the same page as nobody likes surprises in the business. Thus, it is vital to set the goals, nature of the relationship, degree of control, vision, the scale of growth, and exit strategy that is acceptable to both parties.
3. Be Authentic & Respectful
Investing in any firm is not a matter of a “fund it and forget it” scenario for any investor. In fact, they would like to stay updated with the latest ongoing in your organization. And when you are looking to strengthen your relationship with investors, it should be rooted in authenticity and respect. As entrepreneurs are coming into the market with their ideas, they should also respect their investors` opinions, suggestions, and feedback.
Despite the disagreements, they must behave respectfully towards each other. Discussions should happen openly to arrive at a mutually acceptable solution.
To gain investors' trust, startups must engage with them regularly, instead of treating them as an obstruction that needs to be dealt with.
4. Share Challenges & Achievements With Investors
Every investor wants to stay updated about the current progress of the venture he has invested in. Hence, update your investors regularly with the latest figures, and charts prepared by the startup team weekly or monthly, if not daily.
Also, be transparent with your investors. Even when there are failures or mistakes, be forthright with your angel investors. Keeping your communication channel open with your investors helps you build a positive image of the startup.
5. Pay Respectful Towards your Investor`s Input
Investors can guide your startup business with their expertise and insights gained from years of experience in the market. You don't have to agree or incorporate every suggestion, but paying heed and valuing them will give your investors a sense of involvement and validation.
6. Address their Concerns
Investors might have concerns about your plans, strategies, or any other aspect of the business. You should make a conscious effort to address those concerns through open discussion, dialogue, and reasoning.
As founders seeking capital quickly learn, finding the right investor is often all about who you know.
If you are facing the biggest challenges from your investors, we can provide you with amazing solutions with our business coaching program. You can learn from the top industry experts how to take your business ahead in the market. Kick start your entrepreneurial journey by clicking here: www.badabusiness.com