Closing your first funding round is a major milestone, but the relationship doesn’t end when the money is in the bank. In fact, it’s just the start. Angel investors are now your partners and managing these relationships can unlock value far beyond their capital. A good relationship provides strategic guidance, opens doors and generates follow-on funding.
Regular communication
Communicating well is important for a strong founder-investor relationship. Be proactive, rather than waiting for them to reach out. The first step is to send out a monthly email update. This practice sets clear expectations and allows you to focus on running your startup. You’re not writing a novel, so keep it brief.
Updates should also be honest, covering recent achievements as well as any challenges. Sharing bad news builds trust, giving your investors a chance to offer help when you need it.
Keep it well structured, with KPIs, revenue, wins, challenges, plus a clear ask for help. This keeps investors engaged and makes it easier for them to offer relevant support. Asks should be front and centre, at the top of the email.
Maximise their expertise and professional networks
Your investors chose to back you because they believe in your ability to build a business. Make the most of them and their networks. Be specific with asks, e.g. an introduction to a specific individual at a company. This makes it much easier for them.
You can also build out an informal Advisory Board to keep investors engaged. If you’re able to involve them in key decisions, they’re more likely to stay committed when the going gets tough. If you’re able to facilitate investors connecting with one another (say, through an event), they can help open up even more opportunities.
Manage expectations and respect their time
It’s important to remember that investors usually have other things going on, whether that’s a full-time job or a large portfolio of startups. If you’re able to respect their time too, it’ll go a long way to building a productive long-term relationship.
Having a large number of investors on your cap table is totally fine, but if your gut tells you that something is off, it’s usually best not to take their money. Once someone has invested, you can’t easily get them off your cap table.
If you’re able to treat your investors as long-term partners, you can grow a support system that will help you accelerate your startup with more than just capital.