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On my fundraising webinar a couple of months ago, I spoke a little bit about monthly investor updates and I’ve been asked to elaborate on the tactics that we’ve used at Slidebean.
Raising money is hardly ever a meet then get check process. It takes months if not years of developing your network and relationships. Some of our investors in Slidebean I met with my previous company over 3 years ago, and while they didn’t invest then, they agreed to become part of Slidebean for our most recent seed round. That's a 36-month sale!
Related read: Seed funding for startups
While everyone is looking to make more money and will base their decisions on data and metrics, often times the final decision is made thanks to a very human ‘I like this team’ variable. And liking someone takes time. The best way to develop that relationship is with investor updates.
“Often times the final decision is made thanks to a very human ‘I like this team’ variable.
In marketing, staying on top of mind is critical to complete many sales funnels. That’s exactly what street billboards and TV ads are for, not to complete sales immediately but to position your brand in front of your consumers and remind them you exist.
The best way to be on top of mind for your potential investors is with a monthly update in the form of a presentation. This is our Investor Update template, available to everyone on our platform.
Now, your message may range from a generic invitation to view your deck to a very personal, hand crafted email specific for each person. I often alternate the two and send one of each kind every month. Whether they read it thoroughly or not, it is still very likely that they will see your email and guess what, remember you exist.
Last week, I received an intro from a potential investor to a different startup looking to get into an accelerator. They wanted some feedback and the investor thought of me as a reference point. He hasn't invested in our company (yet) but this is living proof that we've succeeded in our goal of staying in his mind.
Related read: How to prepare for an investor meeting?
Also, you want to make sure that the deck you point them to is hosted somewhere on your website. This will allow you use Google Analytics to track the view and bounce rate, and to retarget them with AdWords and Facebook campaigns. Basically, you can get them to see your ad every single time they browse the web, for little over $100/mo. Check our article, Retargeting Campaigns 101.
Fear of Missing Out is your strongest weapon against an investor who has not decided to commit to your company. As your user base and revenue grow, your valuation grows and the less stake in the game the investor can get. You want to fill them with fear that your company valuation is growing significantly.
Monthly investor updates are useful for precisely that reason, they show your progress and your numbers so FOMO increases every month. If you are able to proof high growth margins across a decent time span, you are definitely going to catch their attention. Managing to secure that growth is entirely up to you, though, but forcing yourself to prepare these updates every month is excellent motivation to make sure that growth actually happens.
Tracking your emails gives you a secret and incredibly powerful bargaining advantage. I’ve been working with HubSpot Sales for a while now, and it’s amazing.
What Sidekick does is no different from what Mailchimp has been doing for years: it adds a tracking code on each email you send, notifying you each time that email has been opened, and if the links inside it were clicked.
Guess what? Now you know which of your potential investors are actually reading your email, and if they are paying attention to it. We’ve seen prospect investors that never open our emails (and after a few times we simply stop emailing them); but we’ve seen others opening our links over 10 times in the course of a week. By the time they send a reply you will have a decent notion of how aware or how interested they are in your company.
We’ve also seen many potential investors that read our emails and click our links but don’t reply at all. This allows you to create a separate strategy to get into a conversation with them, like emailing them mid-month.
(We’re also working on adding an analytics layer to Slidebean, so you can see which slides were seen by each visitor. Sit tight!)
If you’re doing your job right, you are going to be dealing with a list of dozens of investors (in my case, that goes over 100). Keeping track of who is who and what conversations you’ve had is (at least for me) absolutely impossible. So I keep a spreadsheet.
This is basically a Google Drive doc with the following columns:
I update that spreadsheet every time I email, call or interact in any way with my investors and thanks to that I always know exactly where the conversation left off.
This is the second mantra at 500 Startups, Always be Closing. Make sure to keep your Hustle mode on at all times. Develop good relationships with the people you meet, you never know when they could be useful. You may find this guide very helpful: How to Present Your Startup to Users and Investors.
Summarising, investor monthly updates help you stay on top of mind for your investors, it keeps them updated about your progress on a monthly basis, and for us, it managed to convince many of our Seed Round investors to join in.
Now go and get funded. (You already have? Good for you! You might like to read this article: Fundraising Checklist: The Investor Said "Yes!" What now?)
This post was originally published May 13th, 2015 and has been revamped and updated for accuracy and comprehensiveness.