Building Relationships with Investors
For The Busy Startup Founder
I think you’re going to have to get the funding before you can worry about strengthening relationships with potential investors. I’m not saying it’s impossible, but it’s a very tough challenge.
Once you have a funding round in the bank, then you can start thinking about how to strengthen your relationships with your investors. But if you’re trying to do that while you’re looking for funding, I don’t think it’s possible.
It’s a Catch-22. You can’t really be in a position to strengthen your relationships with investors if you don’t have funding, and you can’t get funding if you don’t have strong relationships with investors. It’s just very hard to do.
As an entrepreneur, you need to put your head down and focus on building your company, creating a product that customers want, and getting customers to pay for it. If you do that, eventually the funding will come.
It might take longer than you want it to take, but at least then when it does come, you’ll be ready for it.
You might be able to help potential investors see the value of your company by doing these things:
Make sure that people outside of your immediate circle of friends and family know about your company and are using your product or service. Do they like it? Would they recommend it?
Be sure that they are willing to act as references for you if necessary. If they won’t do that, then find some other people who will. You want some people outside of your inner circle who can talk about how awesome you are as an entrepreneur and how much they love using whatever product or service you’re offering.
Get testimonials from people who’ve done business with you recently or even in the past — especially if those testimonials came in written form (email is fine).
Make sure those testimonials are well written and impressive enough so that potential investors will believe them — even if those investors haven’t met those people before.
Do this even if the testimonials aren’t from happy customers — they could still help build credibility for future customers who do become happy customers later on down the road.
If possible, create at least one success story (with numbers) of a customer or client who was able to solve a problem through use of your product or service (a happy customer is best).
The more data points showing positive results with real numbers behind them, the better.
Even better would be customer revenue growth data showing increased sales month over month since starting work with you or using your product/service — but don’t make up numbers here!
Get endorsements from industry experts who can vouch for the quality of what you’re doing (not just anybody can say they endorse what others are doing).
Make sure their endorsements are professional-looking as well as meaningful enough so that potential investors will take them seriously when considering investing in your company — don’t make up endorsements either.
If you can, get some articles written about your company and your business that are positive in nature. I’m not talking about puff pieces here, but rather real articles that look like they were written by an actual journalist who knows what he or she is doing.
The more positive articles out there, the better — as long as they’re credible and accurate.
Make sure you have a great website that has a good design, a lot of useful information for potential customers, and a great-looking video presentation showing what you do and why it’s so great.
You can hire someone to create this for you if you don’t have the time or skills to do it yourself. Be sure to get good SEO for your website so that people can find it easily online (Google likes well-designed websites with lots of quality content).
Make sure your website has a lot of positive testimonials from real customers who have had good experiences with your company.
I could go on forever here about how to position yourself in the eyes of potential investors — but I’ll stop now.
The above list should give you some ideas for how to start building credibility with investors before you even think about approaching them with an investment pitch or looking for funding from them directly.
As I said before, getting funding is never easy — and if you’re not ready when it comes along, then you might end up losing out on opportunities that could be very beneficial to your business down the road.
Take some time now to start building credibility with potential investors so that when the time comes later on down the road when they do want to invest in your company, they’ll be much more likely to say yes.
About the Author
I am the Founder of Cudy Technologies (www.cudy.co), a full-stack EdTech startup helping teachers and students teach and learn better. I am also a mentor and angel investor in other Startups of my other interests (Proptech, Fintech, HRtech, Ride-hailing, C2C marketplaces and SaaS). You can also find me on Cudy for early-stage Startup Founder mentorship and advice.
You can connect with me on Linkedin (https://www.linkedin.com/in/alexanderlhk) and let me know that you are a reader of my Medium posts in your invitation message.