Earlier this year, I wrote a post
about the advantages of entrepreneurs having a strong communications
plan for investors. The more engaged investors are in a venture the
stronger and more beneficial the relationship can become. Of course
every business and each investor is different. I have found that
customizing my communications strategies to the unique wants of my
investors and the needs of the company has been very effective. Here are
a few strategies that I have used in the past.
First, you can’t go wrong with formal communications devices like written monthly reports. Monthly reports containing P&L information are a great way to inform investors about the status of your company and where funds are being allocated. This is especially helpful in entrepreneurial endeavors because investors can recommend course corrections if they see any “red flags” in the P&L report. They also might be able to suggest connections that can help your venture. This type of insight and guidance is invaluable when starting a company. One last thing to note regarding monthly reports is that they don’t need to be but so comprehensive. As I will discuss later, monthly reports should give a detailed snapshot of your company at that time. There are more effective ways to provide a holistic view of the status of a company.
A second strategy that I have used is monthly conference call updates
with investors. Some of the investors that I have worked with in the
past prefer having the ability to ask questions about the report. I
still provide written documents containing financial information but
instead of just sending documents to read at their leisure, I review the
report on a conference call. This approach adds a personal touch to the
process. It shows engagement and the willingness to answer any tough
questions from investors. I also have found that starting a
conversation with investors can be great for brainstorming ideas. We can
share ideas and advice more freely than on email. Although I have used
conference call updates frequently, one tactic that helps make the calls
worthwhile is to create a script before so that I hit every point that I
want to touch on.
A third strategy is in-person quarterly or annual meetings. This is probably the most effective communication strategy. Investors often expect that companies provide time for them to share their knowledge and provide advice because that is one of their responsibilities as an investor. When they have the opportunity to meet with you face-to-face and to see the operational side of the company, they have a better understanding of where improvements can be made or where successes are being had. I can recall a number of great experiences during in-person, collaborative meetings with investors because we have been able to brainstorm ideas and identify growth opportunities.
These are just a few different strategies that have worked well for me. The key to any communications strategy in business is honesty. Investors are genuinely interested in the success of their ventures so being honest about the status of the company is crucial to its survival.
As I mentioned earlier, each company and each investor is different. What are some of the best communications strategies you have used?
Patrick Hull
First, you can’t go wrong with formal communications devices like written monthly reports. Monthly reports containing P&L information are a great way to inform investors about the status of your company and where funds are being allocated. This is especially helpful in entrepreneurial endeavors because investors can recommend course corrections if they see any “red flags” in the P&L report. They also might be able to suggest connections that can help your venture. This type of insight and guidance is invaluable when starting a company. One last thing to note regarding monthly reports is that they don’t need to be but so comprehensive. As I will discuss later, monthly reports should give a detailed snapshot of your company at that time. There are more effective ways to provide a holistic view of the status of a company.
(Photo credit: Wikipedia)
A third strategy is in-person quarterly or annual meetings. This is probably the most effective communication strategy. Investors often expect that companies provide time for them to share their knowledge and provide advice because that is one of their responsibilities as an investor. When they have the opportunity to meet with you face-to-face and to see the operational side of the company, they have a better understanding of where improvements can be made or where successes are being had. I can recall a number of great experiences during in-person, collaborative meetings with investors because we have been able to brainstorm ideas and identify growth opportunities.
These are just a few different strategies that have worked well for me. The key to any communications strategy in business is honesty. Investors are genuinely interested in the success of their ventures so being honest about the status of the company is crucial to its survival.
As I mentioned earlier, each company and each investor is different. What are some of the best communications strategies you have used?
Patrick Hull
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