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The Science Of Getting The Most Out Of Investors

What if we told you Investors can provide you with a lot more, than just money? One cannot disregard the fact that running a startup often becomes overwhelming. With so much to do at hand a person is bound to get perplexed and anxious, so in a situation of dismay who should you turn to for advice?

Friends? Family members? The nosy relatives? That friendly neighbour who keeps showing up at your door for free sugar?

Or maybe you should just read a tonne of articles and research, figure it out on your own?

Well, if you were to as us, you have to do none of the above. In fact, your source of advice has always been in front of you, just unnoticed.

It’s your investors!

Now before you go on your trail of thoughts and accuse us blatantly of talking nonsense, hear us out.

Entrepreneurs have a tremendous backstop of management experience and reasoning accessible to them that, too often, they resist. Why don’t startup founders make more benefit from their investors?

Many entrepreneurs are reluctant to ask guidance from funders. What if it indicates weakness?

 Conversely, It is believed that investors wish the leaders of their portfolio companies to be more transparent about challenges they are encountering and ask for assistance.

In fact, if you were to look it this way, you have already sold them on the business and have their money. Now they are an I.partant part of the dream that you saw your startup as.  It’s now their firm’s job to help you succeed or isn’t it?

Consequently, the success of your venture also bores them fruit so it is not that you are asking them for something impractical

According to a Harvard study, In an informal Twitter poll formerly performed, 56 per cent of entrepreneurs who reacted said their most widespread ask of their investors is for hiring help. Following that (31 per cent), are asking forewords to potential partners or customers, and a small percentage (13 per cent) hit up their investors for financial management advice.

But if you are an entrepreneur yourself, you surely know startups often run into questions and issues outside those varieties as well, everything from what to ask probable hires in a job interview to evaluating sales funnels.

Skilled investors have likely run into those issues many times over, they obviously have a lot more experience than an emerging startup would have and are happy to share what they’ve learned.

So let us break it you, the science if getting most out of your investors.

What to ask?

 Hiring

  • Seek examples of job descriptions and criticisms of those you’ve written. At the end of the day, most investors were operators once. As a result they have a good sense of how to write a good JD. Investors may also have a recruiting arm at their corporation who can solicit you on specific searches.
  • New to hiring? Process interviewing candidates with investors or their associates before getting actual candidates in for the real interview.
  • Resume screening can be an easy task and a quick job for someone who has seen 100’s and 1000’s of resumes. Professional eyes can point out abrupt red flags and give you specific areas you may want to examine for a specific candidate.
  • Finally, but make sure you are very careful about this one, investors may be able to help you get backdoor references on potential hires .Backdoor references can be helpful, but only if done correctly.

Product

  • When asked (or sometimes even when not asked), investors are never short on advice on how your product can improve. But there is a catch, one has to remember, you are in it every single day, they, on the other hand, are not. So, always weigh that advice against what your team is learning with your customers and headway accordingly. Consider their advice. Of course. but do not follow it blindly.

Finances

  • It’s never too early to get into “budget religion,” particularly if you are part of a capital-intensive business where one needs to figure out working capital, financing with manufacturing and so on.
  • Ask for a recommendation on how to manage your funds in the best possible way and how to track, burn, and equip data for future financing to make the perseverance process easier for fresh investors.

Other than financial areas, product analysis and hiring procedure, investors can be helpful in ways to think about marketing spend as a ratio of investment in engineering or sales/revenue, pricing models, and tax considerations.

Now let us come to the overlooked elephant in the room.

How to ask?

First thing first, stop being so awkward about it. They are now a part of your startup as well. They will not be upset about it.

They would not think of you as weak.You did not ask them for their kidney! It’s a piece of advice, free advice. Stop overthinking already.

Now with all that out of the way, here are some useful techniques:

  1. Investor update emails are always a good vehicle for asks. If you’re not sure if anyone on the investment team can be helpful, be specific: “Looking for advice on digital marketing strategies” or “Would love to talk with someone in your network who can advise my team on HIPPA compliance.”
  2. Routine one on one calls or meetings is a necessity. This gives rise to a good touch point with investors to create a good rapport and connection, try to catch up informally instead of waiting for a crisis or issue to arise as a reason for a call. We suggest you always have at least one ask for these meetings and always follow up with a quick email with that ask in writing.
  3. Identify at least one domain area where each investor may serve you best.

Finally, understand that your investors are not a walking ATM machine, they are not there just for the cash. When they invested in your company they invested in the success of it. Now it becomes a moral obligation to aid you as far as they can to reach that apex.

Do you have any other ideas of how one can get most out of their investors? Tell us in comments down below!

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