Getting a funding is not an easy job, but when you have raised your seed funding, the real work begins. It’s one thing to show your plan and make the investors believe in your startup. It’s something completely different to achieve milestones and generate traction. The pressure of the investor is big.
Here are four tips for managing the investor’s expectations before you create cause for concern:
Communicate early, often and to everyone
It’s important to engage the investors. To engage your investors, whether current or future, you want to be consistent and honest. If you are undergoing a colossal failure or your burn rate has grown to three times what you had projected, your investors should be the first to know. The biggest failure in building a relationship with your investors is not sharing everything that might affect them. An investor never wants to be surprised. If you hit a wall, they would rather hear the news from you and as quickly as possible.
Structure board meetings before you have a board
One way to structure communication formally and in a way that investors will appreciate is to schedule monthly board meetings before you have a formal board of directors. Invite all current investors to join this meeting/call, send an agenda in advance. Ensure that any items discussed during the meeting are followed upon in as timely a fashion as possible. Show your investors that you know how to work with them, and value their time.
Engage your investors for assistance
By engaging your funding investors for operational assistance, you build stronger champions for your vision. Empower them to better advocate on your behalf with the outside world. If they invested in your company, they have likely found personal and/or professional success themselves, and appreciate using their credibility to propel your company forward.
Know when to say "no"
Saying “no” is difficult, especially to your investors. Your investors come from all walks of life and have varying motivations for involving themselves with your company - not all selfless. Often, you will receive guidance that does not agree with your business model, other valued opinions, or common sense. In these moments, it is important to voice your opinion, backed by evidence, to ensure that the direction you ultimately take is a sound one for the company.
Trust and honesty is important. Make sure you communicate in a professional way and often enough. Use your experience and the experience of your investors to take your startup to a scale-up.