Much like a successful relationship, the key to a successful partnership between a company and its investors is clear and regular communication. Without this foundation in place, an investment partnership can quickly hit the rocks, leading to resentment on both sides.
Make sure your business avoids this mistake with these seven tips below for a successful company and investor partnership.
Before any investment is made, communicate openly with potential investors about the potential risks and challenges associated with investing in your company. Be up-front about the business' goals, timelines, and potential outcomes via a capital raise indications of interest page, an investor webinar Q&A session, and any digital marketing communications you share about the capital raise.
Prior to your capital raise, establish a strategy for how you will manage investor communications, updates, and reporting following the raise. Consider how you will communicate with investors; will it be via email updates, a portal on your website, or a shareholder registry management platform such as Orchestra. The latter is an effective tool for companies who want to streamline investor communications and provide up-to-date and compliant information.
Keep your investors regularly updated post-capital raise on company milestones, achievements, financial reports and updates that may impact investors. Not only do timely updates help build trust with your investors, but they also serve as a great way to foster and grow investor pride in your company.
If your company encounters financial challenges which could affect investors, be proactive in communicating these updates to investors in a timely manner. Provide clear and concise written updates via email or a shareholder registry like Orchestra, which outline the issues and the business's plan to address these. Don't try and sugarcoat the situation to make the business appear in a better light, be truthful and transparent with shareholders in order to maintain their ongoing support.
Use clear and concise language when sharing financial reports or updates with investors. Avoid using complex industry terminology and ensure that facts and figures are laid out in an easy-to-understand format.
Provide opportunities for investors to engage and provide feedback via investor events, webinars or conference calls. These are a great opportunity for senior leadership to interact face-to-face with investors and engage in question-and-answer sessions. Shareholders are likely to be your biggest supporters, so when it comes to product and service development, they are a free resource for feedback, insights, and ideas.
Depending on whether a company is publicly listed or a private business will affect the expected Return on Investment (ROI) timeline. Unlike publicly traded companies, the share price of private companies is generally static until there is a repricing event, such as another capital raise or a share sale. Share a clear timeline with investors and educate investors on the factors which may affect the company from realising profits.
Are you interested in learning more about raising capital for your business? Our team is happy to answer any questions and can be contacted at [email protected] or by calling 0800 SNOWBALL.