Design Your Venture Company's Exit Strategy
What Do Venture Capitalists Do?
The Venture Capitalist Pitch Deck: Your Valuation Story

Show Regular Progress to Investors

Nothing increases your attractiveness to an investor more than progress. Over time, if you can show that you are doing the things you said you would do, people will start taking you and your company more seriously. At some point, investors who were only mildly interested before will start to see you as a potential valuable asset in their portfolios.

Of course, certain types of progress are more compelling than others. If you were invited to pitch at an event or present at a trade show, which means you were probably vetted by a committee and invited over other companies, mention that to investors.

They may want to stop by your booth at the event to see how you handle the crowd. They also may want to follow up the pitch to see whether you’ve made any important connections. Similarly, if you close on a large customer account, you have effectively proven that a market exists for your product. Investors want to know about that kind of news.

Here are some other types of news that you should share with investors:

  • Release of new products

  • New key hires

  • Funds raised

  • Deadlines for fundraising rounds that are closing soon

  • Major changes that improve the profit potential for your company

If you could choose the perfect timing for fundraising, you would find a time when you’ll be knocking off one amazing milestone after another. You are always working hard on your business, but sometimes your team is “heads down,” working hard in the back office, and other times, that hard work is coming to fruition.

Choose to fundraise in one of those fruition-rich times in the calendar. Also, keep an eye on the external forces in the larger economy. If the stock market takes a hit, you may want to wait until the dust settles before you try to raise capital. Also check the calendar; after mid-November, all new investment activity grinds to a halt until the new year.

Here’s an example of a good investor PR strategy. The Good, the Bad, and the Ugly is not just a Clint Eastwood movie from the 1960s. It’s also a smart investor communication tool. Carly Gloge, CEO and founder of Ubooly, is extremely good at communicating with investors. She keeps track of all the people who have invested or have talked seriously with her about investing.

Each month she sends out a newsletter for investors that categorizes the news about her company as “The Good,” “The Bad,” and “The Ugly.” You can adopt her strategy by doing the same. Here are the details:

  • The Good: This part outlines the positive things that have occurred throughout the month. Describe your progress in development, marketing, or sales through trade shows, pitch events, customer acquisition, strategic partnerships, and other good news.

  • The Bad: Not everything will go your way. If the big meeting with a new customer fell flat, share that news coupled with a mitigation strategy or a lesson learned.

  • The Ugly: These are fundamental issues that need to be solved before the company can be a success. Your advisors and investors can often help you solve these problems. Sharing troubles early allows everyone to feel engaged and less blindsided when the challenges come up.

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