Chapter 4 - Investor Relationships
IN THIS LESSON
The Art of Building Investor Relationships: The Seven Touches to Secure Funding
Allow us to share a valuable secret that will bring you both peace of mind and confidence during your fundraising endeavours. Brace yourself for this truth: on average, it takes a determined start-up founder or CEO about seven meaningful "touches" with an investor before successfully securing the much-needed investment dollars for your company.
Now, let's unpack what these "touches" entail. A "touch" encompasses various interactions, including face-to-face meetings, phone calls, emails, video conferences, or even exchanges on social media platforms. While the goal is to secure a face-to-face meeting early in your fundraising efforts, it's important to note that skilful execution allows you to conduct most of these touches via phone or online channels.
Nurturing the Relationship Over Time
Just as you nurture a customer relationship through strategic marketing and sales interactions, fostering connections with investors demands a similar approach. This involves actively managing your investor pipeline through well-timed and relevant communications, as well as thoughtful follow-ups. While this process demands dedication, planning, and effort, it yields favourable results.
Dispelling the Illusion of Instant Investment
Let's set the record straight: securing investment dollars doesn't happen after a single meeting. Investors need time to reflect, conduct research on your company and its market, and evaluate the potential. This is your opportunity to engage in further discussions, provide additional information, address queries, and even pose questions to gauge their evolving interest. In essence, view this stage as a chance to exert influence and guide the narrative, placing more emphasis on building a strong rapport.
Progressing Touch by Touch
The initial touch is often initiated through an email, phone call, or perhaps a warm introduction. Following that, your aim is to schedule a face-to-face meeting as soon as possible. Subsequent touches can be accomplished using a range of communication methods, each pushing the relationship forward. Remember, if you find yourself with only three touches and the investor seems hesitant, don't be disheartened. This isn't the time to throw in the towel. Instead, mark your calendar for your next follow-up and persist. A "no" can stem from numerous reasons, and oftentimes, it's merely a "not yet." As your opportunity grows more compelling, they might return later, even if it means agreeing to a higher valuation.
Consistent Communication Yields Results
Persevere in sharing your story and communicating with investors until you see the funds safely deposited into your bank account. This journey requires tenacity, dedication, and a willingness to adapt. Remember, the power lies in your ability to maintain the dialogue, adjust your approach, and showcase the evolving potential of your venture.
In essence, embracing the journey of securing funding is akin to nurturing a growing relationship. Just as in any successful relationship, consistency, authenticity, and patience are key. Through these seven meaningful touches, you can navigate the path to funding success with confidence, knowing that each interaction contributes to the building of a solid foundation for your start-up’s future.