How To

December 8, 2022

How to manage investor relations

Here's how to keep investors in the loop, manage their expectations and keep them on side in case you need help

Image of Anh-Tho Chuong Degroote, who thinks startup pivot culture needs to change in Europe
Anh-Tho Chuong Degroote

Anh-Tho Chuong Degroote has written a lot about the trials and tribulations of running a startup and the role investors play in that journey. She is the founder and CEO of open source billing platform Lago, a startup that took part in the prestigious US accelerator Y Combinator in 2021. She was previously the first employee and VP of growth at fintech Qonto. In our Startup Life newsletter, Anh-Tho gave us her top tips for managing investor relationships.

Set boundaries with your investors

... before you accept money from them. When fundraising, be clear about the type of relationship you expect to have with your investors. If you can, choose investors based on their communication expectations — how often do they want to hear from you? What do they want to know? How much detail do they expect? Speak to other founders in an investor’s portfolio to get a better idea of how they work and the role they will actually want to play (not just say they want to play) in the company. We wanted investors who were not pushy with advice unless it was requested.

Send regular, consistent updates

Investors own a part of your company so they need to be kept in the loop. Sending updates — monthly is standard — builds trust, provides a regular communication channel to ask for support and stops them panicking about whether things are going to plan. Putting together an update should take an hour or two of the CEO’s time. Provide a similar structure each month so it’s easy for investors to track your startup’s progress. Our template looks like this:

  • We need your help. In this section, we ask clearly and concisely for what we need.
  • Traction. How many new clients have we signed up? What does our funnel look like?
  • Monetisation. How are we making money? Any new forms of income?
  • Go to market. How’s our strategy going? Anything new?
  • Product. Any updates, new features, things we’re testing or getting rid of.
  • Cash in the bank. 
  • Bad news.
  • Good news.
  • Once again, we need your help… This section goes after the email signature as a little prompt to investors on previous requests.

Send 1:1 updates to some investors

Identify investors who can help you with specific challenges you’re facing. Send them a personalised and in-depth email — it’s harder to ignore a personalised one-to-one email than a group update. For example, one of Lago’s client segments is fintechs. One of our angel investors sits on the board of more than 20 fintechs. We regularly tell him how we’re evolving — he knows exactly how he can help at any given point.

Have a database of investors and their areas of expertise. In your mind, also keep track of who is connected to who.

Make it simple for investors to help you

Could it take them just one click? Be very specific about the type of help you need. For example, if you’re hiring, provide them with the job description, an outline of who the ideal person would be or maybe some names if you have people in mind and a clear call to action:

  • Can the investor share this on socials? Provide them with some example tweets and posts they can copy and paste.
  • Can they introduce you to specific people? Provide them with an example email.
  • Can they help with the interview process? Provide them with time requirements and potential dates.

Use a tool to make reporting easier

You can use an investor management platform like Visible to keep on top of your investor relationships. These tools can remind you to write your report, provide email templates, track engagement and visualise data. It also makes it easy for investors to have all reports in one place.

On the subject of... managing investors

😇 Don’t forget about angels. High-net-worth individuals often put cash into companies because they want to be involved and learn more about a particular industry. But figure out their motivations before they invest so you know how to manage the relationship moving forward.

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How (and how not) to run a startup.

👐 Open communication is key. Investors will ask you questions to try to expose your vulnerabilities — although this may be to satisfy themselves that you are working on creating shareholder returns, the answers can help you build a stronger, more resilient company, according to the Harvard Business Review.

📝 The different types of investor updates. Investor management platform Visible has pulled together a bunch of investor update templates from accelerators, funds and startups that you can draw on as inspiration for your own.

👉 The investor relations field guide. Data management platform Calliper spoke to more than 100 investors and startups to figure out what the best practices are for communicating with investors.

👌🏿 The 10 rules. Has this Twitter thread figured out the best way to write an investor update?

Anisah Osman Britton

Anisah Osman Britton is coauthor of Startup Life , a weekly newsletter on what it takes to build a startup. Follow her on Twitter and LinkedIn