They said yes! Now what?

3 Simple steps to investor engagement

You just closed your first round of financing to get your start-up company off the ground. What do you do next?

As a start-up investor and adviser, I've seen many entrepreneurs struggle with how to engage with their investors after financing. While it’s relatively intuitive and straight forward, getting it right is critical to your company’s long-term success. Investors want to feel as if they're members of your company. These three strategies will help you do that:

1. Communicate regularly about what's happening.

Send simple weekly emails to keep your investors up to date about changes and progress. Don't make them elaborate or lengthy, maybe just a few highlights sent weekly or twice monthly.

Let investors know what's happening and what's on deck. Include some month-over-month or year-over-year details if you have them. Share accomplishments (new customers, significant new hires, etc.). Even reporting a setback or two can help your investors feel as if they're in touch and not being kept in the dark.

Schedule this task into your work week so you don't overlook it. It shouldn't take more than 15 minutes to compose and send each update.  

As your company grows, you might need to change the cadence, especially as your own time constricts. Instead of a weekly email, you could move to monthly or quarterly. However you change it, don't stop updating your investors. They should always know how the company is doing, and they should always hear it from you first.

2. Schedule an investor meeting.

Set up an hour-long conference call if you have widely scattered backers, or call a face-to-face gathering if your backers are mainly local friends and family.

Sit in on investor calls with top publicly held enterprise companies to learn how they manage their sessions and what information they share. Most will review sales, forecast earnings and growth, discuss marketing and advertising plans, and review organizational or management changes.

These investor calls generally don't cover sensitive data that would give an edge to competitors. When you meet with your own investors, however, you'll want to be as candid as possible. Your investors have pledged their faith and their money to you, and they aren't going to do anything to risk your competitive advantage.

Talk about your successes, where the company is headed and what's going right. Also, include what you've learned along the way. If you're facing a major challenge, your investors deserve to know that.

I once invested in a company whose CEO did everything right on the surface. What he told us made sense based on our investments. But, what we investors failed to do was to ask him for the books.

Once we got full numbers, we discovered that instead of making millions as he had claimed, the company had earned less than $50,000. His lies cost him our trust. As a company leader, you owe your investors full transparency.

3. Call on your backers for strategic help.

Money isn’t all your investors and advisers can give you. Assuming you chose them for their knowledge as well as their checkbooks, you should be able to tap into a deep well of talent and experience when you need help.

Keep a contact list of your financial supporters and your brain trust and their unique skills sets near your phone so that when you need advice, you can connect quickly with the right person.

I'm astonished at how many young companies have assembled robust investor and adviser groups but don't use them. Remember that these people are invested in your success, not just financially but also emotionally. Plus, their advice is free!

Maybe you think having to admit you need help will make you look weak or indecisive. Letting your company falter because your ego got in the way makes you look bad and shakes your backers' faith in your ability.

This game is about winning. Making a mistake because you didn't ask someone for advice is incompetence. You don't have to follow the advice. The point is to ask for it.