written in the past about how to communicate with investors during board meetings. Namely, don't pitch to them.We've
Entrepreneur-turned-venture capitalist Mark Suster posted to his blog recently some tips on how entrepreneurs should communicate with VCs in between board meetings.
Based on his experience as a startup CEO, Suster argues that it's just as important to use the time in between board meetings efficiently as it is to be efficient during the meeting itself. He writes, "I found that too often it was an update meeting for investors rather than a meeting for my company to get value. I've written before about how to turn this equation around and run more effective board meetings. If you want to prevent board meetings simply becoming investor update meetings? If so, you need to do a better job of communicating between meetings so that they always feel well informed."
Good communication, according to Suster, is key to helping your VCs understand your company, your needs, and your expectations.
Leverage the Investors' Networks
VCs know a lot of people, but the key is to help them introduce you to the right people.
Suster recommends creating a Google spreadsheet listing your top customer prospects, business development prospects and other companies you'd like to meet. Include in the spreadsheet information on who you'd like to meet now, in three months, and so on. Have investors and board members put their names next to the people they know and encourage them to add other names to the list.
Suster suggests you "make sure to politely remind investors to run intro's by you before sending them out. We want to help. We don't want to be unfocused. But most VC's are "intro machines." Help them to be well behaved. Help them to follow your process. If you're polite and persistent they will - and they'll appreciate it."
And of course, be sure to thank publicly at the board meeting those members who helped make key introductions.
Help VCs Talk to Others About Your Company
VCs need reminders in between board meetings about the key details of your company. Suster recommends giving investors a paragraph or so summarizing what you do. This isn't a mission statement, but an elevator speech, of sorts. It's also good to share information about your key competitors with your investors and how you feel your company stacks against them.
Keep Everyone Up-To-Date on Finances
Make sure all board members and investors know when you expect to run out of cash. According to Suster, "This is the single biggest thing they shouldn't be surprised about." Keep everyone apprised of and reminded about this date so that investors can plan according.
Biweekly UpdatesSuster recommends sending board members a one-page, bullet point set of notes via email. Make it short and succinct in order to encourage people to read it. Consider including three categories: major achievements in the past two weeks, plans for the next two weeks, and things your company could use help with.
Send the Board Materials 72 Hours in Advance
This will help everyone shows up at the meeting informed and ready to contribute.
The underlying principle to many of these recommendations is the importance of maintaining communication between entrepreneurs and investors. Even if you are holding regular board meetings every four to six weeks, that is too long to go in between updates. Good communication in between meetings can help insure that the time spent during the meetings is productive.