Building better relationships with investors is crucial for any fundraising process. Whether you are seeking seed funding, Series A, or beyond, you need to establish trust, rapport, and alignment with potential and existing backers. In this article, you will learn some practical tips and best practices to improve your investor relations and increase your chances of success.
Before you reach out to any investor, you should do your homework and learn as much as you can about them. What is their investment thesis, focus, and criteria? What are their portfolio companies and exits? What are their values, interests, and pain points? How do they prefer to be contacted and communicated with? By doing your research, you will be able to tailor your pitch, avoid wasting time, and show respect and professionalism.
-Audit target investors' websites to identify their mandates, criteria and focus areas. -Review portfolios to understand what types of companies, industries, business models they prefer. -Research notable exits to gauge expected return thresholds and investment hold periods. -Find common portfolio themes around technologies, geographies, founder demographics. -Understand their values and issues they care about through published content. -Note communications policies and guidelines on outreach methods and processes. -Follow social media to observe engagement preferences and personal interests. -Use tools like Signal to identify referral contacts and warm introductions.
Prioritise transparent communication, providing regular updates on company progress, and being honest about both successes and setbacks. Clearly articulate your business strategy and consistently meet performance expectations. Foster personal relationships by attending industry events and responding promptly to inquiries. Understand investor goals and align strategies accordingly. Address concerns promptly, value feedback, and provide detailed financial reports. Emphasise a long-term vision for sustainable growth. Educate investors about the industry and celebrate successes together. Building strong relationships requires ongoing communication, transparency, and a commitment to shared success.
Investors are not just sources of capital, they are also potential partners, advisors, and advocates. To build better relationships with them, you should aim to provide value and feedback whenever possible. For example, you can share relevant insights, introductions, referrals, or testimonials that can benefit them or their portfolio companies. You can also ask for their opinions, suggestions, or feedback on your product, market, or strategy. By providing value and feedback, you will demonstrate your expertise, generosity, and willingness to learn.
-Build rapport by sharing meaningful connections, insights and opportunities. -Introduce portfolio companies to potential partners, customers or talent. -Highlight emerging trends or developments in investor's sectors of interest. -Offer to review or provide feedback on target companies as an industry expert. -Ask thoughtful questions to tap into their experience and lessons learned. -Seek guidance around challenges related to their expertise. -Express vulnerability on areas for improvement to show learning mindset. -Establish reciprocal value exchange through advice, mentoring and problem-solving. -Keep providing support over time without immediate expectation of reward.
Communication is key for any relationship, especially with investors. You should communicate clearly and consistently with your potential and existing investors, keeping them updated on your progress, challenges, and milestones. You should also be transparent and honest about your numbers, assumptions, and risks, and avoid exaggerating or hiding any information. By communicating clearly and consistently, you will build trust, credibility, and confidence.
Investors are busy people who receive hundreds of pitches and requests every week. To stand out and build better relationships with them, you should show appreciation and gratitude for their time, attention, and support. You can do this by sending thank-you notes, acknowledging their contributions, celebrating their achievements, or sending them personalized gifts or tokens. By showing appreciation and gratitude, you will create a positive impression, foster loyalty, and strengthen your bond.
-Express gratitude in writing for time and mentorship investors provide. -Send personalized thank you messages noting specific instances of helpful support. -Highlight investor contributions publicly with their portfolio founders and wider network. -Acknowledge advice that led to key introductions or business breakthroughs. -Celebrate when their portfolio companies receive notable awards or funding rounds. -Recommend investors for accolades and leadership roles boosting their personal brand. -Surprise VIP supporters with small gifts or handwritten notes on special occasions. -Promote investors' thought leadership by sharing social media posts or content. -Reciprocate generosity through referrals, events invites, reviews as an advisor.
One of the best ways to build better relationships with investors is to ask for referrals and introductions to other investors who might be interested in your venture. This will not only expand your network and reach, but also signal your confidence and credibility. Investors are more likely to trust and invest in startups that are referred or introduced by their peers or contacts. By asking for referrals and introductions, you will leverage your existing relationships and create new ones.
-Leverage relationships by asking investors to connect you with aligned contacts. -Seek warm introductions to peers interested in similar sectors, stages, models. -Request referrals to other investors in their network open to pitches. -Ask for insights on what factors to highlight when contacting recommended leads. -Offer to facilitate introductions or share referrals in your community in return. -Share when referrals lead to valuable conversations, opportunities, or partnerships. -Express gratitude and update original referrers on promising connections. -Build credibility through investors vouching for you to their trusted circles. -Expand reach exponentially through referral chaining over time.
1. Networking 2. Know what you want 3. Understand your investors motivations 4. Seek advice and feedback 5. Ask for referrals
The last but not the least tip to build better relationships with investors is to follow up and follow through on your promises and commitments. You should always follow up after any meeting, call, or email, and reiterate your key points, next steps, and action items. You should also follow through on your deliverables, timelines, and expectations, and keep your investors informed of any changes or delays. By following up and following through, you will show your professionalism, reliability, and accountability.