13 Rules for Communicating with Investors

Raising money from investors is a lot of work, hard work. Any amount of efficiency, focus, and know-how you add, will leverage your success and speed up your capital raise. We've accompanied countless early-stage startups on their capital raise and observed what works and what doesn't. 
Here are thirteen key principles to help you effectively communicate and follow up with potential investors.

1. You're the Expert and Visionary

You are building a unique solution to a real-world problem. You are an expert in the niche you are operating in. Building a solution means you have a vision of how your venture will make the world better, and where we are headed.
Let that show in your communication with investors. They will respect you for the value and knowledge you provide them. If they believe in your vision, leadership, and expertise they will want to join you. 

2. Keep it Short and To The Point 

Most investors have limited time and numerous pitches to consider. Be brief and focused in all of your communications with investors, starting with your first message to them. Make your presentations brief, to the point, and impactful.

3. Have Empathy

Show that you understand the investor's perspective and needs. Learn about them, and truly listen to them. Ask questions. Think about their point of view and concerns. Be sure to understand and communicate how investing in your startup will benefit them - how will they make money, and beyond. 

4. Maintain Their Curiosity

Don’t reveal everything about your venture upfront. Keep the investors curious to learn more about your startup, so that they have a real incentive to meet you, (or move on to another meeting from the one you're at).  

5. One Step At a Time

Every interaction should be a step forward, with the immediate goal of piquing the investor's interest for the next conversation rather than sealing the deal right away. When you first reach out, you want them to respond and express initial interest. Then you want them to provide their email. Then get on a meeting. Then have another one. And so forth.

6. Be Honest and Genuine

Be genuine in your interactions and avoid manipulative tactics or "closing" or pressuring techniques. They don't work and are likely to backfire, and make the investor feel unsafe, and therefore unwilling to invest. Respect the investor's intelligence by being truthful and sincere, and simply being yourself. It will pay in the long run.

7. Be Professional and Contained 

Whether you're reaching out initially or following up, always be respectful, patient, and composed. Avoid coming off as demanding or needy. On the flip side, don't try to hype things up or look overly excited. Be an expert and present yourself as one. 

8. Document and Keep Track

Keep track of all your interactions with investors, including their contact details and key takeaways from your discussions, using a CRM or spreadsheet. Use the information to follow up emphathically. 

9. Keep Your Cool

Understand that fundraising can be a challenging process filled with rejections and unfulfilled promises. Stay focused and patient. This is a long and bumpy journey, stay the course. 

10. Build Long-Term Relationships

Shift your perspective from being transactional to relational. Aim to build lasting relationships that can yield significant benefits, even if the investor doesn't invest immediately. A strong network is one of the keys to success, nurture it. 

11. Leave an Open Door

If an investor initially declines your proposition, leave the conversation on a positive note with an invitation to reconnect in the future. Their interest may develop over time.

12. Follow up (but don't overdo it)

Maintaining a long-term relationship surely means you should follow up and keep in touch. Time your follow-ups wisely, and send updates after reaching significant company milestones or raising new investments. 
As much as following up is important, don't overdo it. Over-frequent follow-ups can paint a picture of desperation and will drive investors away. Instead of sending a direct message as a follow-up, consider less intrusive ways of keeping in touch, such as responding to posts on social media, or sharing a newsletter with monthly or quarterly updates to all your investors and stakeholders. 

13. Ask for Introductions

Regardless of the outcome of your interaction, always ask, "Is there anyone else I should talk to?" This could pave the way for new opportunities and potential investors.

These principles will not only help you approach and follow up with potential investors effectively but also establish meaningful relationships that could drive your startup's success over time.