As a founder, one of the greatest missed opportunities in capital raising is neglecting to follow up with past investors. Many entrepreneurs focus solely on finding new potential investors, but there's significant value in maintaining relationships with those you've already spoken to. Here’s how you can turn a previous "no" into a future "yes" by leveraging past conversations and keeping investors engaged.
Understanding the Missed Opportunity
Every founder has conversations with potential investors who ultimately decide not to invest. However, these initial rejections should not be the end of the relationship. Investors may say no for various reasons: they might not be ready to invest, or they might be waiting for your company to reach certain milestones. Therefore, it’s crucial to keep these investors updated on your progress.
The Importance of Investor Follow-Up
Maintaining communication with past investors can significantly increase your chances of securing future investments. Regular updates on your company's milestones, achievements, and progress can keep your business top-of-mind. When the timing is right, these investors may reconsider their decision and choose to invest.
Strategies for Effective Communication
Create a Follow-Up Plan:
Make a list of all investors you've spoken to in the past 12-36 months.
Ask for their permission to send updates about your company.
Consistent Updates:
Send regular updates on your business progress, including milestones, new product developments, and achievements.
Use various formats like emails, newsletters, and videos to keep the content engaging.
Engage with Content:
Share videos and articles about your company’s progress and future plans.
Highlight any media coverage, awards, or grants your company receives.
Personalised Communication:
Tailor your updates to the interests of the investors.
Address their specific concerns or questions from previous conversations.
Real-Life Success Stories
Many successful entrepreneurs have secured investments from past rejections by keeping investors informed. For instance, Jason Calacanis, a renowned investor, highlights that only a small percentage of founders follow up with updates, yet those who do significantly increase their chances of securing funding later.
Conclusion
The greatest missed opportunity in capital raising lies in the follow-up. By maintaining consistent and meaningful communication with past investors, you can turn initial rejections into future investments. Remember, it’s your job to update, inform, and engage investors. Implement these strategies to maximise your capital raising efforts and nurture lasting investor relationships.
