While my last post in this series was about connecting to investors in the first instance, this one is about how to maintain a relationship until you are ready for investment.
Right back in the first blog in this series I said that “at a recent Informatics Ventures event John Waddell of Archangels (Scotlands biggest angel group) cited an example where the investors had actually written the business plan for the company as part of an extended collaboration pre-investment”. Clearly not every relationship is going to be this close, but it is a good idea to keep investors informed of what is happening.
Be ready to give people you’ve already met a concise update if you bump into them at events, but don’t necessarily assume that they will remember either you or your business without a reminder. Investors tend to meet a lot of people! The events listed in the previous post on connecting with investors are good places to keep in touch too.
There are a variety of publications and newsletters that Investors are likely to see, most notably Young Company Finance. YCF tracks all SMART awards and investments automatically, but it is good to make sure that the story is as rich as possible by getting in touch with them. YCF also tracks Work in Progress, and events such as a successful trial or customer contract may be worthy of reporting. Scottish Enterprise and University commercialisation organisations also often have newsletters, and it is worth getting into these if possible.
If all is going well, relationships should be able to progress, with bumping into people at events turning into invitations to come in for an informal chat and eventually to pitch for investment. It is almost always a mistake to try to jump ahead – I’ll avoid the obvious dating/courtship comparison here. When first meeting an investor, “success” might defined as a “yes” to questions like “can I send you some information?” or “Can I come in and tell you a bit more about what we’re doing?”.
During courtship, I have had a very positive reaction when I have been able to say what a company plans on doing next, then report on how we have done. Sometimes we meet our objectives, and investors seem to like teams that set reasonable objectives then achieve them. Other times we fail to meet our objectives, but learn about our market and revise our strategy accordingly. Again, as long as I can show I am engaged with my market and learning from experience investors are likely to view that positively.
Sometimes people have an idea that investment is like “Dragons Den” on TV. You walk into a room, pitch, and get a “yes” or “no” on the spot. My experience is that with Angels in Scotland it is much more about building relationships over an extended period.