The last company that I built from the ground up has a capable roster of angel investors ranging from ex McKinsey consultants to captains of industry.
Together they’ve funded our company for more than 1 million dollars. Their help resulted in a market-leading IoT business in the vehicle detection industry.
While the growth money is excellent and often much needed, it’s not the only thing your investors bring to the table.
I’ve realized that way too late. I must be sincere. In the 5+ years that I’ve built Parkeagle with Peter, we consistently underestimated our investors’ potential impact, guidance, and help.
We viewed our relationship with our investors as two camps in a constant tug of war. It was us against the investors. We felt like they were always out there to take more of the company, gain more control and get a better grip on what we were doing.
There was total distrust, which resulted in a complete blind spot.
After leaving Parkeagle, I knew that my way of looking at the fantastic group of individuals was wrong. And I have missed numerous opportunities because of my distrust and my alertness toward them.
To learn from my mistakes, I have taken some time to reflect on how I would do things differently next time. In addition, I’ve taken some time to research how I would manage my group of investors the next time around (and I’m sure there will come ‘a next time’ eventually).
Below, I’m sharing a framework for approaching meetings with investors. It’s a structure of utilizing your investors and working with them to get stuff done.
The work starts at the pre-meeting
The meeting always begins in the week leading up to the discussion:
Share the correct information beforehand:
More than 24 hours before the meeting, you need to send out a meeting agenda with the latest cash flow forecast and discussion points. This way, people can prepare, and specific subjects won’t come as a surprise. When things come as a surprise, you’ve made a mistake, which is to not keep your investors in the loop on the pressing issues while working on those issues.
Massaging the players:
After you’ve sent out the plan from the meeting, I would advise you to do individual phone calls with investors that need massaging on specific topics. Plus, it’s good to get a sense of their temperature, so you know what to expect.
Set up your meeting for success
Do this at the start of your meeting:
Always ask: does somebody want to add something to the schedule? And ask, does anyone have a hard stop? You want to give people the opportunity to get things off their chest. And you want to know how much time you have before the group (most often on Zoom) needs to disband.
Going through the meeting priorities:
During the meeting, you go through the talking points from high to low priority agenda points. It’s always better to start with complex topics when everyone is fresh. Then, once you’ve smoothed out the challenging issues, you can use the excess gas for the minor priority stuff.
How you handle questions, decisions and responses during your meeting:
Investors expect quick choices, reactions and actions. Unfortunately, you won’t have definitive answers to those questions most of the time. So, it’s your job to aggregate all input and take that with you in your post-meeting work.
Your language is important:
You don’t want to be rambling all the time. Keep your sentences concise and without the jargon that no one understands. You don’t need to have all the answers. No one expects you to have all the answers. What people do expect is clear communication. Finally, it’s okay to say: I don’t know. And it’s okay to ask stupid questions.
Record your meetings:
If you’re doing meetings partially or entirely on Zoom, I advise recording your sessions through a recording tool like Avoma. At the beginning of the meeting, always note that you will be recording the meeting for later reference, which has two effects: 1) People will pick their words more carefully, and 1) people will stay more on topic and be more professional.
How to handle commitments:
It would be best to never commit to something new in a meeting unless you have thought about it beforehand. If you don’t like something right away, tell them you need to think about it. It’s essential to set expectations ahead. Inform your investors that the purpose is to collect input and not put things in stone. If a decision needs to be made on the spot, make sure you’re prepared or ask for more time to think about it. You’ll always argue that good decisions should be based on adequately evaluating all input gathered during and after the meeting.
Post-meeting:
After the meeting, always share a written recap of the conversation. And when you’re using Avoma, you can always share the recordings. Next, copy the schedule and add in the necessary bullets with information. Finally, add the to-dos and outcomes of decisions made during the meeting.
How to get maximum value out of your investors
Put them to work:
These investors are not your friends from the bar. They joined your ship to make it as valuable as possible as quick as possible. See them as your allies in value creation and give them tasks to help you with. Put them to work.
Bouncing ideas:
Most of these guys (unfortunately only guys) have boatloads of experience. So they have seen a lot, and they can give constructive feedback. So don’t be afraid to open up and show them that you lack experience in a particular area and ask them to help you grow. But always keep in mind that business advice should always be weight and scrutinized on its own.
Weight and credentials:
In my mid-twenties, I hadn’t seen shit, while these guys had earned their grey hair and all had a significant track record that I could learn from. Your group of investors will probably be significantly more experienced in negotiation skills. They’ll have a more extensive network and the seniority to display credibility during important events or meetings with prospects/clients.
It all comes down to keeping your investors in the loop and treating them nicely, and they will stick with you your entire life.
Unfortunately, I had to learn this the hard way.
Every lesson is a lesson in your backpack.