TorontoStartsBook a call

Best Strategies to Build Relationships with Investors

Startup Talk · October 25, 2024

Best Strategies to Build Relationships with Investors Podcast Show Notes for Best Strategies to Build Relationships with Investors In this engaging episode of Startup Talk, our expert guests dive deep into the critical topic of how to build relationships with investors—a cornerstone for any startup aiming to raise capital and grow sustainably. Whether you’re a […]

A TorontoStarts podcast

Open audio in your browser
Best Strategies to Build Relationships with Investors

Best Strategies to Build Relationships with Investors

Podcast Show Notes for Best Strategies to Build Relationships with Investors

In this engaging episode of Startup Talk, our expert guests dive deep into the critical topic of how to build relationships with investors—a cornerstone for any startup aiming to raise capital and grow sustainably. Whether you’re a startup founder looking to attract Canadian investors or an entrepreneur aiming to secure long-term partnerships with angel investors and venture capitalists, this episode is packed with actionable advice to guide you. Featuring industry leaders like John Irwin, Jeff Hoedeman, Alex Morsink, and Graeme Barlow, this discussion provides a comprehensive look at the strategies required to build strong and lasting investor relationships.

Why It’s Essential to Build Relationships with Investors

Building relationships with investors is not a one-time transaction. It’s a long-term process that requires consistency, transparency, and trust. Investors, particularly angel investors and venture capitalists, look for founders who can deliver on their promises and maintain open lines of communication. Establishing and nurturing these relationships well before a capital raise ensures that investors are already familiar with the progress and potential of your business.

1. Start Early and Build a Community

One of the key takeaways from Alex Morsink’s advice is the importance of starting early when building relationships with investors. Alex advocates for building a community around your startup from the beginning. His recommendation? Create a quarterly newsletter where you regularly update potential investors on your startup’s progress. This proactive approach is not only about showcasing success but also about being transparent with challenges. Over time, these consistent updates help investors feel involved in your business journey, which builds trust and rapport.

By the time you are ready to raise capital, you’ll have an engaged audience of investors who have been tracking your progress. They’ll be more likely to invest because they’ve seen the journey unfold. As Alex puts it, by “building in public,” you cultivate a group of investors who are already familiar with your vision, making the fundraising process smoother and more effective.

2. The Importance of Authenticity

Throughout the episode, all the experts agree that authenticity is key when you’re trying to build relationships with investors. Jeff Hoedeman and John Irwin stress the point that investors, especially those with experience, can easily detect when a founder is not being genuine. They recommend being open and honest in your communications. This means not only sharing your successes but also being transparent about your struggles. By doing so, you show investors that you’re someone they can trust.

This authenticity is particularly valuable in the Canadian investment landscape, where investors tend to prefer long-term partnerships. Investors are more likely to back a founder who is upfront about challenges and demonstrates resilience in addressing them. As John Irwin mentions, honesty builds a foundation of trust that can lead to more significant opportunities down the line.

3. Call Your Shot: Create a Track Record of Success

Another golden piece of advice from Graeme Barlow is the concept of “calling your shot.” In essence, Graeme suggests reaching out to potential investors long before you need capital, informing them about your plans and milestones. By maintaining consistent communication and showing progress, you create a track record of success.

For example, you might meet an investor and tell them your plans for the next quarter. Three months later, you update them: “I did what I said I would do, and here’s the proof.” This shows investors that you can execute your business plan reliably, a trait they highly value. By the time you sit down for an official investment conversation, you’ve already demonstrated that you’re a founder who can deliver on promises—a critical factor in securing investment.

Graeme emphasizes the importance of consistency in your communication when building investor relationships. Regular updates, whether through email or social media, show that you’re serious about your business and capable of executing your vision. Over time, this consistency builds trust and makes it easier to close deals when it’s time to raise funds.

4. Focus on Building Your Personal Brand

Alex Morsink brings up a key insight that many founders overlook: the importance of focusing on your personal brand when building relationships with investors. Many founders put all their effort into building their company’s brand, but this can be a short-term strategy. Alex advises founders to build their personal brand alongside their company’s brand, as it offers long-term benefits.

When you build a personal brand, your reputation grows with you, regardless of the success or failure of your current venture. If your company is sold or closed, your personal brand remains intact, allowing you to carry your credibility and network into your next venture. This can be especially valuable when trying to build relationships with investors, as many investors prefer to follow the journey of a specific founder, not just a single company. By fostering these personal connections, you ensure that investors will continue to support you in future projects.

5. Consistency is Key

A recurring theme in this episode is the importance of consistency when building relationships with investors. Regular updates through a newsletter, social media, or even in-person meetings help keep investors informed and engaged. But more importantly, consistency shows investors that you’re reliable. When you deliver updates on time and keep investors in the loop, you reinforce their belief in your ability to execute your business plan.

Graeme Barlow stresses that investors are more likely to back founders who have a history of following through on their commitments. Whether it’s meeting quarterly goals or achieving significant milestones, consistently demonstrating progress will strengthen your relationships with investors and increase your chances of securing funding.

6. Build Relationships with Canadian Investors

For founders targeting the Canadian market, John Irwin highlights some unique opportunities to build relationships with Canadian investors. He mentions free assessments for government funding, which can help startups build a solid financial foundation before seeking private investment. Canadian investors are often interested in long-term growth and community involvement, making it essential for founders to show commitment to both their business and their community.

Additionally, Canadian investors value authenticity and personal connections. This means founders should focus on building genuine relationships and maintaining transparency throughout their business journey.

Additional Resources

• John Irwin: Connect with him on LinkedIn and explore free assessments for Canadian government funding.

• Jeff Hoedeman: Reach out on LinkedIn to discuss strategies for building relationships with investors.

• Alex Morsink: Visit the Equivesto Learning Center for more resources on investment and raising capital.

• Graeme Barlow: Follow him on LinkedIn, Instagram, X, or visit GraemeBarlow.com for more insights on personal branding and investor relations.

This episode is an invaluable resource for any founder or entrepreneur looking to build relationships with investors and secure funding for their startup. With expert advice on creating long-lasting relationships, building personal brands, and staying consistent in communication, you’ll walk away with the tools needed to succeed in the investment landscape. Don’t miss out—subscribe for more insights on navigating the world of startups and investors!

Additional Resources and Links:

Ontario Startup Ecosystem Links

Episode transcript

Read the full transcript

how can founders start build a relationship with investors? What are the best ways for founders to build and maintain relationship with Canadian investors? I have a sort of go to one. A lot of people talk about building in private or building in secret, and I think that's the opposite. That's a bad idea. You want to be building a community from the beginning. So what I would recommend doing is have basically like a little newsletter. So you send out an update. I don't know if it's going to be quarterly or monthly. Maybe monthly is too much. Quarterly is usually a good amount. But every time you go out and you meet an investor or you talk to anyone about your company, You basically just want to see if you want to solicit and see if they're willing to join your newsletter. And you just slowly build up this little community of people who you're keeping updated on what the business is doing. Good or bad, send out that newsletter every quarter. And you just build in public slowly. By the time you get to the point that you want to raise capital, maybe you've got five hundred, maybe you've got a thousand people on this newsletter that you can then talk to and approach in that way. Yeah, I'll just I'll put it simple. I'll put it simple. Be genuine. Be genuine because investors and angels, they'll be able to sniff through the bullshit for the most part. But just be genuine in your approach. Be genuine in what you want to do. Be genuine at the end of the day. Two things I would add to Alex's point, because I love that philosophy and I love that approach. One of the things that that does is call your shot, right? Like one of the best things you can have done before sitting down for a capital raise conversation is nine months ago, reached out and said, hey, I'm building in your space. Do you want to follow my journey? Cool. And then every three months, hey, I did a thing. I'm going to go. This is the next thing I'm going to do. Three months after that, I did it. Here's our next thing. If you can come to the table with a track record of, hey, I told you I was going to do a bunch of things. I did the things and I'm showing you I consistently execute on time against the plans I set. That's huge. And the other extension, I would say, Alex, and this is just probably personal opinion, but for founders out there, when you're building that list and you're building in public, do it on your personal brand, not your company brand. This is something I did not do properly in my first couple of companies. And honestly, I've regretted it since. And I'm doubling down on investing now as I grow multiple companies. But the reality is, especially if you're a founder, whether you're successful or not with your first company, you're probably going to do multiple. If you do the entire list building, brand building, community building in your company, when you get to a point where you sell the company or shut down the company, you get to start from zero the next time you build. Whereas if you do it on your personal brand, you build a personal brand and reputation of sharing those updates, sharing that how you build and building that newsletter. Every time you launch something new, every time you do the next step, you carry all of the traction from the past forward with you. Which is hugely, hugely valuable, fifteen years down the road.

More from Startup Talk

All episodes