Scaled.

Relationship Management: The Top 3 Ways Founders Can Show Investors Some Love

Written by Kristin Luck | 2/14/20 3:30 PM

One of the most important relationships for a founder, and at times the most tenuous, is the one with their investors. Whether you’ve raised money from friends and family, angel investors, or a Venture fund, here are our top three strategies for building and maintaining strong relationships.

1. Establish Clear Expectations and Communication Cadence

Investors, particularly less savvy ones, should have a clear (documented!) understanding of their expected involvement in the company (if any) post investment and how often they should expect an update on their investment.

2. Look for Synergies Beyond the Financial

The best investors, in our experience, are the ones that bring more to the table than just money.

Do they have experience in your industry that will be helpful to accelerate company growth? Are there key connections to clients or partners that they can offer? When considering potential investors, understanding what they bring to the table, in addition to funding, is paramount.

3. Celebrate the Good, But Don’t Hide the Bad

Often management teams are quick to update investors on big wins, but slow to disclose failures or roadblocks. Investors can be fantastic brainstorming partners when the going gets rough... so trying to muscle through the tough times without giving them the opportunity to provide input can be a major misstep.

The founder/investor relationship is much like a marriage. Like any long-term union, there are ups and downs, and it requires effort and commitment to maintain a strong and lasting relationship... ideally from seed to A, B or C series and beyond!