2023 is going to be an extraordinary year. Spending cutbacks. Lesser experimentation. Pausing hiring. Extending runways.
Do you worry about how to communicate with your investors in 2023?
We discussed and here are what you should know.
Here is how to talk to investors in 2023:
1/ Be honest - because nobody knows.
Nobody knows how the economy is going to play out this year. Everyone is as bullish as they are bearish. Venture Capital, of course, is an optimistic business.
But knowing that nobody knows is an opportunity to level with your investors.
2/ Inform of the good. Discuss the bad.
Investors are looking for signs that performance can be muted. But they are going to still back you. So, enrol them as an equal. They know that this isn’t a ‘You’ issue. It’s a ‘We’ issue. So, give them reason to trust you and get them to back your decisions.
3/ Tap their real ‘value’.
Capital is sufficient when the economy is going well.
When there is a headwind, realise that they find their value in being helpful – providing industry insight, making introductions or even sandbox your GTM.
4/ Communicate excessively.
Identify how to transform your reporting.
Bake in an additional level of transparency.
Add more context to how your metrics could pan out.
Communicate all the factors that would need to work for you.
5/ Ask for time. Think it through.
Understand that all conversations are coming from an angle of how it applied to someone else in their portfolio. Know that each investor comes with their own portfolio ‘baggage’. So don’t try to use your spontaneity to impress them.
6/ Introspect. Playbook.
Spend adequate time trying to think through all the things that were successful initiatives and try to have them playbook-ed. Identify if they could continue to work in different economic scenarios.
Now allow them to grasp what you have been able to think through – even if at a 10k foot level.
7/ Strategy visualization decks.
Give them to understand how your business could look at different milestone achievement.
Like at a $10m ARR -> $100m ARR -> $1b ARR, say.
This could help them visualize your thought process and better participate in your decisions.
8/ Personalize your communication.
Know that each investor is different and has invested at different circumstances. Though everyone has the same goal (MOIC), understand that they invested for a specific thesis.
See how to communicate in a way that allows them to individually associate with your progress.
Honestly, I see reporting to be more a sign of a healthy mindset.
I know a lot of founders who normally don’t want too much communication.
But 2023 isn’t normal circumstances – is it?
Maybe 2023 can be the year you try something new.
Want some tips to communicate?
Hit me up.