Published on December 16th, 2014 | by Jose Vasquez0
How Startup Tech Companies Keep Angel Investors Happy
Angel investing is a common way for startup tech companies to secure funding, but you have to update your investors regularly to keep them involved and excited.
Getting your startup tech business idea funded is the first step to getting your company running, and many entrepreneurs seek angel investors for that startup capital. Angel investors are always eager for new venture opportunities, but if you want to remain funded and stay loyal to your benefactors, you’re going to need to update them regularly.
Ty Danco and Dharmesh Shah, two entrepreneurs who have mentored and invested in multiple startup companies, surveyed dozens of major early stage investors to discover what they like to see in their regular updates. Take note of these ideal qualities of investor updates, and incorporate them into your communication strategy:
- Be consistent. Write frequently, every 1-2 months. Be consistent with it.
- Be concise. Don’t send an update that’s more than two pages in length, and try to only communicate the most relevant information.
- Use a template. With a regular format, your patrons will be able to read and digest information much more quickly.
- Speak to the present. Make sure you include information about what you’re doing right now for the company.
- Reveal strategic problems. Always identify 2-3 major issues you’re currently struggling with, especially if they are high-level, directorial decisions. Your investors are likely very experienced in these types of business matters, and in most cases will be eager to give advice.
- Be honest, but don’t reveal everything. It’s important to be as honest and open as possible, but retain a few secrets if they’re important to the future of the company.
- Ask directly. If you have a request or a favor to ask, don’t be shy. If they aren’t able to help you’re out nothing, but if they are able to help, you’ll be glad you asked.
- Respect privacy. Use the BCC function of emails whenever possible to respect your investors’ privacy.
- Archive. All forms of communication with your investors should be housed in some permanent storage, mutually accessible so there is no ambiguity in what information was given and when it was given.
Pay attention to these elements of successful communication and your investors will remain interested. Also keep in mind that your updates are a great way to keep yourself on track as much as they are a way to update your investors—use this opportunity to identify any weak points in your strategy and assess your current situation.