Chapter 5 - Investor Management
IN THIS LESSON
Keep VCs Updated Even as You Talk about Potential Funding
Some entrepreneurs have the misconception that after they pitch a VC about the accomplishments of their company and start talking specifics about possible funding that the conversation should remain solely on financials and funding. However, that is not true.
While you are going back and forth with a potential investor about funding possibilities, you should continue a parallel track of updating the investor on what you and your start-up are accomplishing. This is important to call out because once you get into the numbers, it is easy to forget that providing a steady stream of updates simultaneously is a subtle way of applying influence.
You could find yourself in a situation in which a VC is on the fence about investing in your company. You and he are going back and forth on email about funding. You may think that you have provided all the highlights of your company to the VC and that’s what they will base their decision on to either fund or not fund.
But it could be weeks after your meeting when your company accomplishes something significant. By updating the VC amid funding negotiations, you could use the major accomplishment to get the VC to close on your investment proposition.
This is particularly true when the VC is on the fence. He/she may like a lot about your company, but also have a few reservations or doubts, given market conditions and a crowded space. But when you put one major win or accomplishment in front of them and it can be a game-changer. So, keep VCs updated over time and be your start-up’s best promoter.