When you need funds to take your business a notch higher, one of the options to consider is connecting with an investor. However, you need to build trust with your investor since there’s much more ahead than just getting funds.
Investors hold excellent business acumen that can take your business to the next level. If an investor trusts your business, they’ll be willing to connect with more projects or, better still, give guidance and support your next project.
Here are five strategies to build trust with your investors.
A common mistake that most entrepreneurs make is picking out investors for funds only. Funding is essential, but you need to see beyond that. Most investors have mentoring skills that can gear up your business.
It’s essential to understand the value of the expertise and connections that the investors will bring on board. It’s necessary to involve them in decision-making and make them feel they’re part of your organization. Appreciating them means listening and implementing the great ideas they bring to the table.
Remember that they have their money on your business, and they want it to excel just as much as you want. Give room for authentic and open dialogues to understand their underlying concerns. They will tell you about the risks they’re willing to take and why.
Investors tend to stick with brands that communicate and outline the strategies clearly. Whether you’re about to start a business or you have been around for long, being consistent and transparent is crucial.
Investors want to see a plan that’s flexible to overcome challenges as your business grows. It’s also essential to ensure that you stick to the strategy and report the progress to investors. With transparency and consistency, you will receive more funds and still maintain the relationship.
If you’re serious about earning financial trust, you need to be consistent in accounting, reporting, and achieving targets. It’s essential to ensure that you and your team communicate a consistent message and maintain that consistency across other channels.
For example, investors won’t trust your brand if you give false information on press releases. So, if possible, limit the number of people who can speak on behalf of your organization.
Investors are likely to trust brands that are swift to adapt to the dynamics by providing innovative products or designing new business models. They expect your business to have digital processes geared towards effectiveness and efficiency.
You’re more likely to earn investors’ trust if your organization can quickly and effectively adjust to changes in technological disruptions. If you embrace the latest technologies like robotic process automation, artificial intelligence, or mobile applications, investors are likely to trust your brand more.
An excellent way to begin is investing in a private equity platform. The platform will manage your investor relations. Besides, they’ll also engage potential investors and provide a general financial report on variables like cash flows and income.
With professional mediators, you don’t have to manage your investor relations with spreadsheets. The platforms are future-proof, thus managing complexity, sourcing more, and LP base expansion.
As your business grows, you might have investors from different parts of the world. Language and cultural differences can limit communication. Consider seeking the services of a reliable mediator who can listen to all parties for clear and objective communication.
Embracing these principles helps investors to understand your brand’s culture and behavior. Investors want to associate with organizations with commitments to social, environmental, and governance principles. So, it’s crucial to analyze and report your organization’s performance against these principles.
Organizations that treat customers and employees reasonably are regarded as socially responsible and are more likely to attract investors. From a governance point of view, investors check whether your organization’s leadership depicts accountability. They also confirm whether you have a structured governance system that has robust internal controls.
From an environmental perspective, if your organization seeks to address climate change by using renewable energy sources, you stand a chance of earning more trust from investors.
Essentially, building trust is all about being transparent and valuing the relationship between you and your investors. It entails understanding and addressing their concern and expectations, then meeting them consistently.