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From an article by Arthur Lipper III, Author of The Guide to Venture Investing Angels – Financing and Investing in Private Companies. Intelligent information transfer and timely communication are my prescriptions for a continuing happy (or at least satisfactory), healthy and nondestructive investor-entrepreneur relationship. What I mean is very simple. The entrepreneur should prepare the investor for realism, frequently spelled the same as disappointment. Specifically, the entrepreneur should establish a regularly scheduled series of communication elements with the investor(s). These communication elements should be both written and personal. I am a strong believer that monthly newsletters with charts should be sent to investors. The charts should be the reflections of a living business plan. The charts display previously achieved results, current period results, and projected results as well as new or amended projections. The entrepreneur should meet with the investor at least quarterly, and probably monthly, for the purpose of keeping the investor within the family and delaying, for as long as possible, the development of the "we v. they" syndrome. Once the we/they thinking has developed and the camps become established, the problems begin. The entrepreneur should do everything possible to have the investor play a role that keeps him feeling that he is on the entrepreneur's team and is in fact making a contribution. If the problems of the company in achieving objectives are fully and fairly understood by the investor and he feels that he is on the team, he will possibly be available for additional funding and certainly not be resentful of the need for it. Entrepreneurs can ask their investors to help: Help to gain information, help to gain customers, help with public relations and, on occasion, help with personnel matters. The entrepreneur should recognize that in most cases the investor had to have been competent in some areas of activity which are, or can be, useful to the entrepreneur's company to have made the money which he has invested. A knowledge of the investor's strengths should be in the entrepreneur's asset file. |
