How to Keep Your Investors Invested

Share Button

We all know what importance money has in any business. Be it the beginning of the startup or the enhancement phase, money is required for everything and anything. There are a number of ways by which you can “Raise capital for your startup“. But what to do next?

You did it. You secured your funding. Good for you. You now have investors in your kitty but the task is not done. Having investors is certainly not enough. You’ll have to make constant efforts to retain them. There aren’t any great rules to keep investors but some etiquette and learnings that might serve you well:

1. Control the excitement:

It’s quite natural for anyone to get all excited and cheered up on closing a deal with an investor. But you should always maintain your poise and stay calm atleast for the next 48 hours. Don’t announce your financing, sign a new office lease or expand your team before the money is in the bank. Doing so would make the investor feel that you do not know how to manage finances or business deals.

2. Spend Smartly:

Just because you’ve raised a big round doesn’t mean you can mindlessly spend your cash. When it comes to making initial purchases, spend it on things that matter, things that will help your team work productively and comfortably. Computer hardware and an inspiring work space are worthy investments.

The CEO does not need to be the highest-paid person at your startup. When it comes to your own salary, make a statement. Sacrifice is leadership. No investor appreciates a founder who gets rich, irrespective of the company’s actual performance.

3. Maintaining the Relationship:

Investors want to know how the company is doing, so keep them in the loop. Regular email updates and phone calls to all your shareholders should inform them of new material developments, major business trends and upcoming news you’ve heard on-the-ground as a startup founder.

Always try to sound optimistic to your investors. Even if you’re not sure of how your company would face various challenges, do not reflect that to the investor. Always try to end the conversation on a positive note.

4. Trust is the key:

The risk your investors take with your company is different from the risk that you take as a founder. They invest much more than capital on your company. Be it reputation or time, an investor does that on the name of faith; therefore you should never break their trust. Try to be as much transparent as possible. It’s because of them that you get a chance to rise. Do your job with great dedication and honesty and nothing can ever steal your investors away!

Share Button