Investor Relations – Investor/Investee Relationship Building

How to form a strong relationship with your investors

When financing is the only thing holding a business back from success, entrepreneurs may look to an investor to help them reach the next level.

Investors can offer a wide range of advice, guidance and can even open doors. All of which can really help get your business off the ground. If you are successful, you can find yourself connected with a whole host of other people and projects. However, if things don’t quite work out, but you make a great impression, investors may provide guidance and come on board for your future business ventures.

As a potential investee, it’s up to you to form and nurture strong relationships with investors. Our growth business accountants are here with a couple of strategies that can help you create and maintain a great bond with investors.

Investor/Investee Clarity

From day one, discuss your aspirations and expectations of your business. You want to be on the same page as your investor right from the get go. This will ensure a smooth relationship in the long run. Business plans, procedures and policies should be discussed clearly and openly.

Remember, investors want the same for your business as you do. A clear dialogue like this will also help you determine what risks they are willing to take and how they can help mould your business, only then will you understand any concerns they may have.

An honest and open approach to your investor relationship

This conversation also needs to be open and honest in order to develop a relationship based on trust. This means communicating the true fact and figures in both your business plan and cash flow forecast.

A transparent discussion around any setbacks and challenges you might have had as a company, as well as the successes and objectives for the future. An investor has the right to know everything – good or bad. Conducting yourself in a transparent manner from the beginning of your relationship will save you problems (and awkward conversations) down the line if things don’t quite go your way.

Build relationships early

If you’re invited to a meeting with a potential investor, things can appear to be happening quite suddenly. Whilst this can be tricky, as you may not have had the opportunity to fully study their character, it’s worth doing as much research as possible, before your first meeting. This will enable you to stand out from the other businesses they are speaking to, and help you to get your investor/investee relationship off on the right foot.  

Don’t hide your passion

Whilst your main objective is building your business as an entrepreneur considering taking investment, it’s important to realise that your potential investor is not only interested in your company or idea. They are interested in your passion as well.

Don’t hesitate to talk about your aspirations and dreams with the investor. It’s only bound to make them feel more confident in your ability with the effort you put in.

Final Thoughts

Constant and consistent communication will ensure your relationship with your investor stands the test of time. Investors may become suspicious if they are not kept in the loop at various points. Keep communication open and strong and share all the small wins with your investors.

As with every relationship, there will, of course, be a few disagreements from time to time. Growth, cash flow or going public can be huge tests for investor-entrepreneur relationships. Working together on challenges now will allow you to avoid a messy breakup further down the line.

Manchester Accountants for Start-Ups

At Alexander & Co, we always get to know your business by providing a fresh perspective, advising on all issues that could be hindering your growth. Make sure you get in contact with our team of friendly experts.


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