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5 Rules for Treating Your Investors Right

There’s a reason most investors have such a tough love attitude: They’ve been burned too many times to do the whole song and dance yet again. Being an investor means taking huge risks while believing in a person and project they might know very little about. As a startup and/or entrepreneur, it’s your job to treat your investors right. Think of it like courting someone for marriage—not dating, not hooking up, not just “talking” but actually courting them with the intention of building a mutually beneficial relationship for the long haul.

You wouldn’t ask for someone’s number at a bar and then not call them (let’s be honest, text them) for two weeks if you were serious about the contact. You wouldn’t go to the trouble of meeting their parents for the first time, only to ignore their parents’ Facebook friend request for months. However, a lot of entrepreneurs do the equivalent of such things with their investors. They “secure” them, take their money, disappear for a year (or more!) and then show up with results, but, also asking for even more cash.

Your investors deserve more out of this relationship than a ROI. Here’s what they need and here's what you should give them:

 

1. Open communication

This doesn’t mean hound them daily with emails, but you should establish a minimum basis for communication from the start. This might mean monthly financial statements and a quarterly meeting or phone call. It won’t hurt to send them a holiday card, or find out their birthday and send a small professional gift. Communication is key.

 

2. Show them you value them

This means valuing them and not just their money. Don’t let basic etiquette fly out the window once the contracts are signed. Say "thank you" when appropriate, give them a shout out when your company holds an event, and if they seem open to it, engage in small talk like asking about their family when you meet. This is a partnership, so treat it as such. Relationships, even financial ones need attention and nourishment.

 

3. Timeliness

Practicing timeliness in all things can seriously boost the success of any entrepreneur. Send them reports on time, always be five minutes early to meetings (but no more than that), and basically do what you say you’re going to do when you've said your going to do it. There’s no room in the entrepreneurial world for procrastinators. Whether intentional or not, leaving out these details can be seen as a power play and that you don’t value their time.

 

4. A founder who knows his or her stuff

Your investors deserve to feel like they’re dealing with a professional—even if you feel like you’re clueless at times. Ditch the “uhms” when speaking, always be over-prepared, and if you don’t know the answer to something, say so, but commit to finding the information within a reasonable timeframe. Many investors double as mentors, but that’s not necessarily a requirement or a role they want to fill.

 

5. Remember who needs whom

Your investor will likely be just fine without you, but they might be the only person willing to give you a shot. This demands gratitude and respect at all times. Of course, this doesn’t mean you should happily take abuse from an investor (verbal or otherwise), but it does mean there’s a pecking order and right now you’re not at the top.

 

Building and nurturing relationships with investors isn’t always easy, but it can be learned with conscious practice. Treat your investor right and they’ll be more likely to return the favor.