Investors play important roles in businesses that include helping the company to raise the capital to start running. Investors also trust you to go ahead and ensure the capital they give your business is invested properly. They ensure that the money is managed accurately and also create a good reputation for your business in the market so that your business attracts more investors. Investors also engage in risk management to ensure that you reap the maximum profits while making the least losses.
The relationship between a business owner and the investors in the business is like a marriage. The relationship has its highs and lows, and it requires commitment. As a business owner, it is your role to ensure that you put enough effort into retaining your investors. When problems start arising, and your investors start losing confidence in your business, this is bad for your business, and you may start getting losses and slow growth. You need to do everything in your power to retain your investors.
How can you make investors trust in the vision of your business?
1. Foster a Relationship with the Investors Early Enough
Before asking an investor to invest in your company, it is important to have a relationship with them. There are many places that you can meet potential investors, like at business conferences. Take these opportunities to network with people who can help your business to grow. It is also important to always carry your business card in these meetings.
When you meet the investors at these places, first have a talk with them like asking for business advice. After you establish a rapport with them, you can then get their trust, and you can then request them to be part of your business so that you can grow together. However, if the first conversation that you have with an investor is to ask them for money, the highest probability is that they will turn down your request.
2. Be Straightforward
Another way of gaining the trust of your investors is to be clear in what you are asking. Investors play other roles in the business in addition to funding. Investors can also offer you advice on how to grow your business, and they might even have higher expertise on some issues than you do. Therefore, you need to be clear on the details of what you want. Whether you are looking for just funding, networking with some high-end people, or strategy discussions, express it clearly. After getting help, always go back and thank the investors for assistance.
3. Have a Good Credit Score
Your credit score helps your investors to estimate how likely it is for you to repay their money on time. When you have a higher credit score, investors will be able to trust you with their money. According to an experienced Credit Repair Expert, the two best ways to improve your credit score are paying your bills on time and starting to pay off your debts. You can also dispute any inaccurate information from your credit report to earn the trust of your investors.
4. Honesty in Communication
When an investor gets involved in your business, they desire to know all the information about how your business is fairing. Investors are interested in learning about the profits you are making. Still, they also require to know about any challenges that your business is facing or even the losses you are making. When you are open about your business, you will earn the trust of your investors. It might be hard to disclose the bad news about your business, but you must do so if you want to earn the trust of your investors and to retain them.
5. Keep the Investors Up To Date
Having regular communication with your investors about how your business is doing is another important step in earning their trust. You need to give your investors regular updates at least every quarterly. Give detailed information that suits the needs and the style of each of your investors. Sometimes you may only need to give a summary, while other times, you should give the investors a full update of how your business is doing.
In summary, investors play crucial roles in every business that includes providing funding to run the business, offering their expertise and advice on how to run the company, and connecting your business with other investors. To earn the trust of your investors, be honest in your communication, give them a regular update on how the business is doing, and be clear about what you are asking from them.
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