Communicating to Your Investors – It’s More Important Than You Think…
Transcript
So much of being a great entrepreneur is about being a great communicator. As a leader of a company, you have to effectively communicate with your investors, with your customers, with your employees. It's such an important skill, yet something we rarely talk about. And it takes time. It takes time to work on the skill and it takes time to actually communicate concisely. One of my favorite quotes is Samuel Clemens who said, I would have sent you a shorter letter, only I didn't have the time.
being concise is hard. I'm going to talk for a minute about how you should be a
better communicator with your investors specifically because that's the thing I
see I'm the recipient of that all the time. The first thing you have to do is
set a regular cadence you want to decide how often do you want to communicate and
it depends on the stage of your business so in the earliest stages
companies we work with at Techstars for instance they're communicating weekly
with weekly updates to their mentors and investors.
Companies that are a little more mature communicating monthly.
Many companies, as they get later, Series B, Series C companies are communicating quarterly.
It's important that you are disciplined and consistent.
You see, if you've set the expectations with me that you're going to communicate monthly
and it's been 45 days or 60 days since the last time I've heard from you,
I'm going to be disappointed.
But if you had set the expectations that you're going to communicate quarterly
and it's 60 days, I don't expect anything from you for another month.
Be disciplined, be consistent.
You also have to decide how much you're going to share.
In those early stages of Techstars, typically companies are sharing
the nitty gritty details of tests they're working on, the results, who they've hired,
KPIs, all of that stuff, because they're looking for feedback
from their mentors and investors, and they have to share that information
to get that feedback.
As you get more mature, maybe you're a Series B or C company and you're sending out a quarterly
update, you're actually not really looking for feedback.
You're looking to communicate to the investors the progress that you're making.
That update will consist of high-level financials, probably a handful of KPIs, and maybe a written
paragraph about how the company's doing.
You're just trying to keep them informed of your progress.
It's all about managing expectations.
Either is appropriate, just make sure you manage expectations.
Speaking of expectations, the key to doing this well
is to always under-promise and over-deliver.
Because if you do that, you will earn the trust
of your investors, and when you need them,
when you ask them to step up for the next investment,
when you're planning the next year, they will believe you
because you have a habit of always under-promising
and over-delivering, and you will have happy investors.
Thank you.
One of the most important skills you can have as an entrepreneur is to be an effective communicator. How often and how much should you communicate to investors? The answer can depend on what stage your business is in and what you are looking to gain from your investors. Being able to manage expectations of your investors could be the make or break of your next fundraising round.
Originally published on the MATH Venture Partners blog.