NZBUSINESS.CO.NZ 19
Oneofthebiggestmistakesthatmanystart-upsmakeonce
they’veraisedsomecapitalistoignoretheirinvestors–until
they have run out of money and urgently need more.
The dynamic of this situation is terrible, because ignored
investorsaregenerallylesslikelytosupportabusinesswho
givesthemonlya“badsurprise”.
Think about it from their point of view: you pitch an
investment case to them, they back you with their valuable
capital, they hear nothing from you for an extended time and
then suddenly you are back on the scene, with bad news and/or
asking for more money.
This is hardly a positive experience for them and is less likely
to result in a positive outcome for you.
The best way to take your investors on the journey of your
business is to communicate regularly and honestly about what
is happening in the business and what your plans are going
forward as things progress. Aim for continuous communication
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COMMUNICATION STRATEGY
For communication I recommend a regular newsletter, a
quarterly shareholder report, and aim to meet in person with
your investors at least once or twice throughout the year.
If your investors are directors in your company, you’ll
obviously meet with them much more regularly. If you have a
large number of investors, you should aim to meet with them as
GETTING STARTED { SERIES }
“The best way
to take your
investors on your
business journey
is to communicate
regularly and
honestly about
what is happening
in the business
and what your
plans are going
forward.”
a group, at shareholder meetings and/or investor group meetings.
My business, Datagate Innovation, produces a monthly
informational newsletter that goes to our investors, customers,
prospects, partners, suppliers and anyone else interested in the
business. This lets our investors see the public commercial view of
the business, while the work involved in producing the newsletter
also helps to nurture our commercial relationships at the same time.
In addition to the monthly newsletter, we also produce a quarterly
investor report that goes only to our shareholders. It has more details,
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strategies we are working on.
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report, this is where it should be done.
Further to the regular reports, I make it a priority to meet face-to-
face with investors and/or groups of investors as much as I can, within
reason. This enables more direct communication and more easily
facilitates questions and answers.
It also gives you a valuable opportunity to understand your
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assist you.
It’s important to build trust and understanding with your investors
and there’s no better way to do it than face-to-face meetings.BACKING THE COMMUNICATORS
A leader of one of New Zealand’s top angel investor groups recently
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businesses that communicate the best.
Surprisingly, some very good businesses that don’t communicate
with investors so well, often get overlooked by investors.
It’s well worth getting professional help with your communications,
given that it’s such an important component of your business. It
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but also your wider customer and partner community.
In part 6, we talk about launching your product or service. This will
also have a strong emphasis on communication.MARK LOVEYS HAS BEEN DUBBED ‘ONE OF NEW
ZEALAND’S MOST SUCCESSFUL SERIAL SOFTWARE
ENTREPRENEURS’. HE WAS THE ORIGINAL DEVELOPER
OF EXONET, THE ERP SOFTWARE SUITE NOW
CALLED MYOB EXO, AND FORMER CHAIRMAN
AND CO-FOUNDER OF DATASQUIRT.
AS CO-FOUNDER AND FORMER CEO OF ENPRISE GROUP,
MA RK HELPED ESTABLISH EMS-CORTEX ‘CLOUD CONTROL
PANEL’ SOFTWA RE AS A LEADING INTERNATIONAL
SOLUTION AND WAS INSTRUMENTAL IN THE SALE OF
EMS-CORTEX TO CITRIX IN 2011. THESE TR ADE SALES
HAVE A COMBINED VALUE OF MORE THAN $50 MILLION.