However, that is only the first step of your entrepreneur journey. Keep in mind that luring investments is much easier than maintaining them. Therefore, you need to put in efforts to keep your investors happy. You need their support for a very long time, and upsetting them can create a big huddle for you.
That’s why we are here to help you! Continue reading the article to learn how to keep investors happy.
Keep them updated about company operations.
Understand that your investors are concerned about the revenue of the company. They aim to earn good ROI, and for that, they will try to get information about the company's operations. If you try to hide anything or provide irrelevant information, it can cause you significant trouble.
Investors are very smart. They saw the potential in your business and helped you when you needed it the most. That’s why it is your responsibility- to be honest with them and update them about the operations. It doesn’t matter if the revenue is less than expected or the company had to face a challenge initially, so the plans changed. They understood this factor and had considered it before finalizing their decision to invest.
However, if you try to mislead them about the company's situation, you will lose their trust in you. Along with that, future investments can also slip out of your hands. So, it would be best if you gave them honest updates about the company’s operations.
Remember, every shareholder is equal.
"Who" has invested "how" much money in your business should not cause any type of issue in your company. Keep in mind that all the shareholders are equal. Thus they must get access to all the information. Moreover, you can not restrict any shareholder from asking you the question regarding the company.
Providing correct and complete information to all the shareholders at the same time will help you safeguard your business from future problems. Besides that, it will also indicate that you believe in fair play. And that is highly appreciated by the shareholders.
But what if someone tries to persuade you to get confidential information? Even in such a situation, you should not get greedy and stick to your ethics, i.e., not giving any additional information.
If any shareholder has the information that others don’t, it will be called information asymmetry, and it is illegal. However, those shareholders who are also part of BOD as a non-executive director can have access to confidential information.
Regular reporting of accounts is vital.
As shareholders have put in their money, it is evident that they will ask for company accounts. It is their right. That’s why you should keep your accounts well maintained, have a proper record of company cash and the operating expenses. You see, without accurate financial reporting, it will become challenging for you to earn investors' confidence. Moreover, it can also affect your future investments.
You need not worry about not having high sales or fewer profits in the beginning years. As it takes time for a startup to earn the trust of customers and make regular sales. The more transparent you are with your shareholders, the better will be the outcome.
In addition to that, it will be better for you to adopt the habit of reporting the company's financial position to the shareholders every 3 or 6 months. It will ensure the shareholders that their money is being used wisely and will surely give them high returns in the future. Furthermore, it'll give a green flag to you for being a responsible entrepreneur.
It is not all about money.
Although the primary purpose of the shareholder is an investment, there are several other benefits that you can seek from them. They are experts when it comes to making financial decisions. So you can take advantage of their experience and ask for advice. Don’t be afraid to ask them if you have any doubts regarding anything.
And believe us, the possibility is that you’ll get excellent advice and might end up availing yourself a golden opportunity that takes your business to a higher level. Moreover, it will also make your investors feel good and respected. Hence they will feel more attached to the company. So, in case you face any issue in the future, they will be supporting you.
Not to forget that most people know about big investors. They have a good reputation in the market, so having a reputed name being associated with your company will also have several other perks. So, you need not get investors just for the money. The name can do wonders as well.
Show them results
Last but not least, shareholders will believe more in words written in the final reports and less in the promises you will be making. That’s the reason why you need to show them the results. It is alright, even if the results are not as great as you wanted. Even a little bit of a positive outcome can help you maintain the trust of your investors and go a long way.
In fact, if they give you some suggestion or tell you about any scope of improvement, don’t just listen to it. Note it down and implement them. Prove them that their opinion matters to you. These little things are what will keep them stay connected with you.
Kindly understand that shareholders know plans can change due to change in environmental and economic conditions. Thus the results might not be positive all the time. But if you are putting your efforts and it can be seen, they will surely like it.
The bottom line
Honesty, fairness, transparency, and dedication are what drives investors the most. They seek long-term benefits. So if you report to them regularly, ask for their advice, do your work without any deception, you will make them happy.
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