Founders are constantly inundated with demands from clients, partners and potential investors. Maintaining good relationships with these people is an important skill for business people to hone – and that takes time and energy. As a founder of a business that other people are supporting with their dollars you have a responsibility to provide useful and timely updates to investors. But there are other (more self-serving) reasons to get into the habit of regular investor updates. The folks who have already written checks are your built-in X-Factor. They are the ones who are most likely to provide additional funds, make introductions to new investors and connect you with potential customers and other valuable opportunities – so make sure to ask your investors directly when you identify a need. Failure to regularly communicate with investors robs your company of this X-Factor and all of the benefits that come with it. Without regular contact, investors can feel alienated, undervalued and neglected. To avoid those negative outcomes and boost your communications with investors, regular updates can be a tremendous help.
At the same time, investors don’t want founders spending an inordinate amount of time and energy keeping them updated. They want you building the business, closing deals and growing the team. Fortunately, there are ways to keep investors up to date with minimal time investment. Resources like Foundersuite, Reportedly, Visible, and Supdate provide automated updates to investors and allow business people to add as much, or as little, information as they like. Some of these resources even help automatically organize information that investors value so that it can be presented in an easy-to-read and logical manner. These resources allow you to add investors, activities, contributions, set status reports and reminders to contact people, and even create re-usable investor update templates you can automatically send out every month. You can also see who the most involved and productive investors have been and chart your progress over time. Most of these resources offer free trial periods that will allow you to test the software before you need to make the purchase. By investing a little time and money in these resources, you will save a lot of headache, frustration and confusion in the long-term.
Although automated resources are valuable tools that can help you keep investors up to date on your progress, needs and overall financial situation, it is important to remember that it is ultimately your responsibility, as a founder, to manage the relationship aspects of the business. Don’t forget that the human element of managing relationships is one thing that automated resources, such as those above, cannot ever do for you despite the fact that they are useful in other ways.
Based in the Research Triangle region of North Carolina, Fourscore Business Law serves entrepreneurs and businesses in Raleigh, Durham, Chapel Hill, Wilmington, Charlotte and throughout the Southeast. We also represent venture capital funds and other investors who invest in companies located in New York, Silicon Valley and everywhere between.The idea of delivering maximum impact in a simple and succinct manner is what we’re calling the Fourscore Principle. And that is what Fourscore Business Law is based on. Our clients operate in a broad range of industries including tech, IoT, consumer products, B2B services and more. Questions? Shoot us an email or give us a call at (919) 307-5356. Your first call is on us.