Data room: 4 tips for communicating with investors
When you’re running a start-up in its early stages, knowing how to build and nurture your relationships with investors will often be the difference between success and failure. It’s vital that your communications with investors are transparent, and ultimately reassuring for the people who could make or break your business.
Investor communications don’t have to be a minefield, though. In today’s blog, we’ll be providing you with some tips for staying on the good side of your investors. Having confidence in your business, combined with tools designed for stakeholder communications, such as virtual data rooms, are ultimately the key to communicating successfully with your investors.
You don’t need to be particularly cynical to assume that the biggest goal of your investors will be ROI. But money-making potential isn’t the only reason people will decide to invest. You also need to factor in ‘hot buttons’.
What’s a hot button? It’s essentially a proposal that correlates with the worldview of your investor, in an emotional sense or a rational sense. For example, if your investor has a long history of philanthropy, then they’ll probably be more likely to invest in a charitable project. In most cases you’ll need to be triggering at least one hot button in order to get an investor on board.
Gain the Trust of Your Investors
Investors are only going to take a chance on your start-up if you and the other founders are transparent, organised, and most importantly, trustworthy. If your prospective investors hadn’t heard of you prior to acquiring your pitch deck, there probably won’t be much in the pitch deck that’s going to convince them of your potential. One of the most effective ways to maintain interest is by being honest with your investors.
If your business is experiencing a setback, don’t keep them in the dark. They’re far less likely to place their trust in your business if you’re portraying that business as unrelentingly perfect. If you’re honest to investors about the hurdles your start-up is facing, they’ll appreciate it and remember it. They’ll probably leap at the chance to help your business solve the problem, and their actual value to the start-up will be activated.
Have Patience While Generating Funds
Generating funds for your start-up is a process, and one that requires discipline. While it can often be frustrating to have so many lines cast with not a single bite, it’s important not to let those frustrations show when a prospect is showing promise. And remember: if an investor doesn’t seem to be taking an interest in your business, it won’t necessarily remain that way forever.
Ensure Communications with Your Investors are Concise and Professional
One of the last things your investors want is for your communications to be haphazard and unprofessional. Make sure to establish a pattern of communications, be it through face-to-face meetings, over the phone, or on video calls. Don’t rely exclusively on emails, either- that’ll just slow everything down.
All of your investor communications will be more efficient with a virtual data room. Looking for an easy-to-use VDR for communicating with your investors? Book a demo today to find out why Engage data rooms from Perivan could be crucial for your business.