How to Communicate with Investors: Good and Bad Habits

Effective communication with investors is crucial for maintaining trust and support throughout the lifecycle of a startup. Clear, concise, and regular updates can make the difference between a flourishing partnership and a strained relationship. This blog post explores the essential good and bad of investor communications to help startups manage these important relationships

Good Habits to Adopt for Investor Communications

1. Be Transparent

Honesty is the best policy when it comes to investor updates. Be upfront about both successes and challenges, investors are smart and can tell when things don’t sound right. Transparency builds trust and helps investors feel engaged and committed to your success.

2. Maintain Regular Contact

Don’t wait for investors to ask for updates. Regular communications keep investors informed and can help alleviate their concerns during periods of rapid change or uncertainty. Manage any fallouts in advance by setting expectations from the beginning how often they can expect to receive updates.

3. Use Clear, Concise Language

Avoid jargon and be as clear as possible. Your investors may not be experts in your industry, so communicate in terms that everyone can understand.

4. Highlight Key Metrics

Focus on the metrics that matter most to your business and your investors. Whether it’s customer acquisition costs, lifetime value, revenue growth, or burn rate, keep these metrics front and center. Don’t forget to bring out the non-financial metrics too.

5. Celebrate Milestones

Share your successes with your investors. Did you reach a new market, secure a major client, or hit a revenue target? Let them know—it’s as much their victory as it is yours.

6. Allow Potential Investors to Subscribe

Investors are much more likely to invest in a company/team they know and understand. They typically want to know you for a year before parting with their capital, so let them subscribe to updates, stay informed on your progress and you can build a pipeline for your next round.

Bad Habits to Avoid for Investor Communications

1.Overpromise and Underdeliver

Avoid the temptation to promise more than you can achieve. Setting realistic expectations and meeting them is crucial for long-term credibility, backing up your ambitions with forecasts and detailed plans.


2. Bombard with Too Much Information

While transparency is important, too much information can be overwhelming. Focus on delivering information that is relevant and strategic to understanding your business’s progress.

3. Ignore Bad News

Don’t hide or delay bad news. Investors need to know about potential issues as soon as possible, not only to foster transparency but also to brainstorm potential solutions or help you make the pivot you need.


4. Forget to listen

Communication is a two-way street. Encourage feedback, listen to their concerns, and show that you value their input. This can provide you with invaluable insights into how your investors perceive your business and it fosters a sense of collaboration.

5. Neglect Tailoring Your Message

  • Understand the interests of different types of investors and tailor your communications accordingly. Some may care more about financial metrics, while others might be interested in strategic positioning or operational achievements. Make it easy for them to navigate to the section they care most about.

Master your investor communications

Mastering the art of communication with investors is not just about sharing information; it’s about fostering trust, respect, and enthusiasm for your venture. Keeping these investor dos and don’ts will help ensure your investor relationships are as productive and positive as possible.

For tailored advice on improving your investor communications or any other financial strategies, contact us today via our website. Let’s ensure your investor relations are contributing positively to your growth journey.