It’s a hard fact that all founders learn in their start-up journey: although securing funding is like finding the Holy Grail for entrepreneurs, that in itself is never the ultimate success. In fact, getting good at managing the process of investor relations have many benefits that can help more than a company’s cash flow.
This was a key message from investment readiness coach Sarah Ben Younes to a roomful of the North Africa’s most promising start-ups during day 1 of the AfricArena Founders’ Bootcamp in Tunis, Tunisia.
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The two-day bootcamp exposes the founders of early-stage tech companies from the region to international experts and helps them refine their pitches. They will then get the opportunity to pitch during the AfricArena North Africa summit later this week.
In a conversation on the sidelines of the bootcamp, Ben Younes shared her five top tips to start-up teams on how to present themselves as a sure bet for investors.
1. Start by putting a face to your investors
Get to know the potential investors’ DNA. Understand where they’re coming from, their motivations, their triggers. Understand how they function, what triggers them the most, and especially what they would consider as a red flag.
2. Data room prep is not just for investors
Data room preparation is something you do for your business, and investor satisfaction is nothing but a consequence. It offers an opportunity to sit down, to reflect on your historicals and structure where you’re going well.
Diving into your data also helps your small team with a guiding vision, despite start-ups being very agile. It helps you stand strong; stand with the determination of where you want to go, what you must do and what you need to make that happen.
3. It’s actually about the journey (yes, really)
Usually, startups try to stick to revenue and those very common KPIs in their conversations with investors. This while sometimes investors want to evaluate the processes behind the achievement. How efficient is that, how agile is that?
Sometimes start-ups forget to value the journey of adaptation as much as investors do.
4. Do not overcomplicate it
When thinking of financial models, start-ups often try to pick the very complicated ones. Everybody knows that the planning is sure to go wrong and it’s almost impossible to stick to the plans. However, the point behind investment trading is doing the right homework, to bring maturity and awareness to what you want to do next, to be grounded and think of it strategically.
The purpose of preparation is not to provide complex outputs or very sophisticated templates for Excel. The idea is to do the right homework, to move from the right reflections to be able to move things forward.
5. It’s all about relation building
Start-ups and investors are like clients in a business. You need to maintain CRM and you need to nurture the pipeline for those deals. The consistency of investor relations are important, because even though investors decline you, you can keep on sending them notes to show them how great you are.
You also need to maintain that relationship with your current investors, keep on nurturing it with updates, because receiving the funds is not the success. You need to keep working on that relationship, keep on engaging them, keep on being top-of-mind with current investors.
For potential investors consistency of updates show the consistency of yourself as a founder, the consistency of your traction, how you’re doing. If you’re consistent in your relationships investors will always come round.