Why Communicating with Your Investors Is Essential

I haven’t heard a peep since we closed, I thought.

There is always a flurry of activity associated with fundraising. The entrepreneur starts the process by putting together a presentation which shows just how amazing the investment opportunity might be for the investor.

Dissolving Abandonment Fears

The investors who are interested are then filled with questions about the people, the business, and the market. Due diligence and documents are completed. There is the mad scramble for signatures. Finally, the money is transferred to the business.

By the time all this activity is completed, everyone is exhausted and ready to move on. The entrepreneur, his team, and even the investors want everyone to get back to business.

But as an investor, here is how I feel after the money is transferred. Abandoned. I just wired the funds. I am alone with my thoughts. All I can think of is, Did I do the right thing? Just before I gave the bank the wiring instructions, I was excited about how much money I’d make on this deal. After wiring the money, I am concerned I’ll lose it all. Crazy. Right? But this is how I feel.

Where Are the Flowers?

Now I know how Kathy, my wife, felt after we were married for a couple of years. She wanted to know what happened to the guy who was sending flowers every week. Bringing gifts. Calling every day. Telling her how much he loved her at every opportunity. She said, “Now that we’ve been married a couple of years, it seems none of that ever happens.”

The same is true for investors. The entrepreneur loved me like no other before the closing. Now that he has my money, it appears the passion of our relationship is gone.

Entrepreneurs should remember investors are people, too. We are the bride in this deal which just closed. Keep the love and communication coming. Once you take an angel’s money, you are married. You aren’t going anywhere, and neither is the angel. We are in this business together until it fails or succeeds. That’s the deal.

3 Ways to Keep Your Investor Romance Alive

1. Call or Write a Thank You Note

The deal is done. The money is in the bank. Write a short thank you note. Tell them how much their investment in your company means to you. If you are not a note guy, give them a call, not an email. A call today is just as valuable as a personal note.

Reaching out to the investors after the deal sets the closing date in their minds. This is an important time in your company’s history, in our history. You are now funded. People believe in you and have contributed the working capital you need to build a great company. Call the investor and tell him you appreciate him.

2. Meet with Your Investors

Be sure to set time aside to meet with the investors who are not on the Board of Directors. The investors on the board will be engaged. But the investors not on the board are just “out there.”

Angel investors, even the passive investors, want to feel like they are a part of your new, exciting company. A simple way to keep them engaged is to meet with them on a bi-monthly or quarterly basis. I know you are busy, but you did take their money. Now you have the new responsibility of shareholders.

When you do this, you are extending the culture of your company to the investors. They get excited and talk to other people in their network about you and the company. You never know how the investor network might potentially grow your business.

Also, they get to see you grow as a leader. Some of these investors might actually become a mentor to you. Not only for the business but your family and faith. These could be rich relationships, but you have to reach out and meet with them to allow that to happen.

3. Write a Monthly Investor Update

The angel investor wrote a check, so he deserves to be updated. Public companies are forced to do this quarterly and annually. In fact, they go above and beyond the SEC requirements and even publish a four color annual report.

As a private company CEO, get in the habit of writing a monthly update to investors. They want to know what’s going on and how their investment is looking. And as I said earlier, you want them talking about you to their network.

Keep Investors Close

These are the men and women who trusted in you and your idea enough to invest their hard-earned cash. Value this trust with the due care which can only come from a personal relationship. Be there for them, and they will be there for you.

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