Sure, an investor is there first and foremost to hand you a check. Yet, there is far more they can and should do for you with their networks, media access, experience, etc. It’s up to you as the founder/CEO, however, to extract that value. Your investors are usually being pulled in as many directions as you are. It’s your job to maximize the value from all the resources available to you, including your investors.
Seems obvious, I know. So you would be surprised at how often I see entrepreneurs let this rich resource lay fallow. For some, it might be a belief that “I don’t need help,” while for others it might be lack of imagination, experience, or just the confidence to ask. Regardless, your investor is just that, “invested.” As in, invested in you and your business. They are almost always willing and ready to help, often extensively. You just have to ask!
Here are a few ways investors can and should work for you:
1. Make Customer Introductions
If you sell directly to customers (e.g.: usually B2B), your investors often have contacts at high levels within target customers. Use that access to turbo-charge your sales efforts. Nothing moves a sale along more quickly than a personal introduction at a senior level. When I was an entrepreneur at Agile, I was having a hard time making progress with Dell as a prospective customer. After a call from two of my investors to Michael Dell, we were quickly in a serious sales process that resulted in Dell becoming one of our largest customers. Likewise, a call from my board member, Michael Moritz of Sequoia, to Michael Marks, then CEO of Flextronics, resulted in them becoming a very large customer, in addition to cementing our place as the dominant supplier to contract manufactures, a critical position for eventually dominating the electronics vertical.
2. Facilitate Introductions to Potential Partners
Just as they have some very valuable customer connections, investors usually have even more partner ecosystem connections. Whether they are partners for complementary products to fill out a “whole product” portfolio, lead generation or sales channel leverage, or investors for your next round, if ecosystem partners matter, your investors probably have key contacts.
3. Promote Your Company and Brand
Many investors speak to the press, appear in TV interviews, write blogs, engage an audience with social media, etc. Get them on your “amplification team” – likes, favorites, re-tweets, etc. Don’t forget to arm them with news, interesting data, talking points etc., so they can re-enforce your message. For example, we connect with our portfolio companies constantly and in advance of funding announcements, big news and product launches so that, not only can we speak articulately and on message about your recent milestones, but also, we can tie you into our own amplification strategies. We also re-tweet every tweet, blog post, press release, announcement or news item that comes out about any of our portfolio companies, as well as post on LinkedIn. All are opportunities to promote our portfolio companies, if we are properly armed with current information, latest company and product positioning, breaking news, etc.
4. Introduce You to New Investors
The startup investment ecosystem isn’t that large. Most professional investors know each other, as do many angels. They can not only make introductions, but also, they can give you a run-down on what each potential investor is like to work with, what their focus is, etc. Direct personal introductions are many times more likely to get a serious response from a VC firm.
5. Connect You With Potential Board Member and Advisors
Yet another way to leverage your investor’s network. VC investors and many angels sit on boards with other capable board members (See my previous post, “What Makes a Great Board Member”), and can help find and vet potential board members for you. There is nothing like first-hand knowledge about how a person performs as a board member to help you get that selection right.
6. Pump-up the Troops
Investors often have notable and relevant backgrounds and are experienced speakers, making them potential keynotes for all-hands meetings, sales kick-off meetings, user conferences, and the like. If they are board members, they can also add validation and support to a CEO, making it clear that the board fully backs a particular strategy or positioning.
7. Help Recruit and Hire
Many investors were operators/managers at some point in their career, often of large teams. For example, I personally met every employee we hired beforehand at my last company – I’ve literally interviewed a couple thousand candidates. Those investors who have been managers know how to interview and help vet a candidate, from a real-world experience point-of-view. At the same time, it can also be helpful in closing a key candidate. It’s an ego-boost for a candidate to meet board members, and sends a signal that the candidate is important and valued. Some VC firms also have talent management executives to help their portfolios source key talent.
8. Act as a Sounding Board/Coach
For those investors with appropriate deep operational, subject matter and/or entrepreneurial experience, as well as a good dash of wisdom, ask them to act as a coach or sounding board. After all, your VC investors are paid to help you succeed, and many angel investors do so as much for the opportunity to help out as to make a return. Don’t be shy about asking your investors to spend regular quality time with you, so you can pick their brains, learn from their past mistakes and lessons-learned, and help you explore options and gain new perspectives.
9. Assist in Negotiations
Many investors have meaningful negotiating experience. Two of my partners were a corporate attorney and a professional negotiator and negotiation coach, respectively; they have advised hundreds of companies in various negotiations. I’ve personally been involved in hundreds of M&A, financing, partner, supplier, and customer negotiations on the operating side. Where appropriate, use those skills and experiences, not just as board members ratifying a decision, but as active participants in the process – some of your investors may have more experience than anyone else on your team!
10. Make Space and Other Resources Available
Often your investors have incubation space, board rooms and other meeting space available that you can use for free. Even better, they often have memberships/access to clubs, vacation retreats, etc. for off-sites, corporate events, company parties, etc. at preferred rates, often at places that are very difficult to gain access. Your investors want you to win, and most are happy to share resources where they can.
You may work for the board, but you can also make the investors and board work for you. They have the incentive and the desire, so don’t let a valuable resource go to waste!
This article was written by Bryan Stolle from Forbes and was legally licensed through the NewsCred publisher network.