Daria Shualy is Don Draper / product marketing at daPulse.
"Are you f *** ing kidding me?" I was screaming in my phone in the courtyard of my favorite bistro. I am outraged and screaming to my investor.
A new era of tech events began
We're back in New York in November for the 4th edition of our technology event focused on growth.
You should never yell at your investor (or anyone for that matter). But at this stage, it does not really matter anymore. I had already lost my own start and we were now dotting the i's and cross the t our ugly divorce papers. The love is gone.
Many mistakes I made as a founder and first CEO, the worst was that I mishandled my relationship with my investors. As for entrepreneurs, there are endless advice on how to raise funds; the investor side, there are countless posts on how to invest. But the two sides rarely talk about how to manage this precious delicate relationship.
I had two wonderful, beneficial investors on my side at the now defunct Sense of Fashion (background: we raised $ 3.5 million, had 20 employees and unique 200K per month) Yaniv Golan and Jeff Pulver. I also had investors who were simply not good -. For me as a first time entrepreneur, or for the company as a platform for social e-commerce fashion
In both cases, the wrong way I handled matters, has made bad things for the company and myself.
The Don'ts of the relationship of your investors (aka What I learned the hard way)
1. Leave nothing but you be the reason why an investment
the reason for this is that you and your investors need to be united. So many things have to happen for a startup to succeed, it is almost a miracle some actually do.
In the sense of fashion, my first three investors came because of me: my energy, the ability to get others to follow and vision. But my fourth investor, the VC did not come because of me. He came mostly because of one of my investors.
He had wanted to be in business with him before, but it did not work. Now he had the chance, and our impressive team took its decision easier. This made him push my investor to become the CEO, to which I agreed, thinking that I should put my ego aside and do what is best for my business.
I did despite my co-founders say they thought it was a bad choice for the company. Not only was it the beginning of my long and painful path of my own business, it was also the time the company began its decline. Not because my investor became CEO was incompetent, but because I am the only person with the full comprehensive view of society in his head.
The minute I went down to be CEO of the company began to zigzag like a drunk in a dark parking. Sof completely lost focus, ability to execute and its unique value proposition, and started bleeding money and users to the grave (and on the way, lost my two co-founders as well).
2. Do not let someone else be the CEO
... at least not in the first three years of life the society. So many investors are wondering if you would be willing to resign from the leadership role of the direction "if it is in the best interest of society." Your answer should be defined, non-negotiable NO.
There are two very good reasons for this. The first and most important is that for the beginning of its life, the company really exists only in your head, in your vision as founder. This is the only place where there is an overview of the potential of the company.
The second reason is, as the owner of this vision, no matter how many people share with you, you are the one who has the stamina to withstand all the ups and downs. You are the only one with enough fire in your eyes to recruit employees, users, investors and supporters, even at the worst moments. Jason Goldberg Fab's my favorite example of this.
Get the focus of your company aligned so remember to let someone else take over for the benefit of growth.
3. Do overshare
This does not mean hiding things from your investors. This means that you should not bother them with all the features and thought that comes to mind, and certainly not with any concerns -. Even if they are kind, friendly, patient and helpful
You are the founder and CEO, it's your job to lose sleep. Oversharing gets investors too deeply into your decision making process and the worst - he gets concerned, even worried. You do not want investors worried.
4. Do not keep them guessing
The reverse of oversharing do not keep your investors in the dark. When investors do not know what is happening (assuming they still believe in you and give a damn), they become nervous and begin to share their anxiety and doubts with each other. This can lead to participation and loss of confidence in your leadership.
5. Do not make decisions at board meetings
meetings of the Board are not for large, critical decisions. They are for the update. You have to manage the meetings of the board in a way that will prevent them from turning out of control.
In the sense of fashion, I had a very important question comes suddenly at a meeting of the board and made a decision then and there. The result was disastrous. The fact that I wrote "suddenly" is an indication of my mismanagement of this.
The back of the relationship of your investors (aka What I learned happily)
people say you can learn a lot from failure. It is my experience that you learn even more successful.
The failure can be attributed to many things. When you do something good and see the results, it is easier to identify what you have done and share it. Here's what I learned to good management of the relationship with our investors daPulse.
1. Remember that you know best
Neil Patel once said "Successful people do not always know what's best." The logic applies here too.
Investors are successful people with money and power that can be intimidating especially when you are on the receiving end with recognition. But you must remember that you know your business best. Not because you are smarter, but because you live every day.
You know every aspect of your boot, bugs in the happy tweet by a user, the coder who marries next week and is fuzzy this week, the vision mentioned above. Investors know that what you say.
While you should listen to what they have to say and give it thought, the decision should always be yours. At daPulse we have brilliant charismatic investors like Eden Shochat and Wix CEO Avishai Abrahami. Both, for example, can be very persuasive. While we often take their advice, sometimes we do not do. We remain focused on our roadmap of how we know it should be.
2. Come through trust
Your investors are here because of you. Let them know that they were right to put their hard earned money on you.
Back up your confidence with real data, and if necessary with the opinions of experts. Know what you are talking about and make sure it is clear in a reassuring, not arrogant way.
3. Make someone your confidant
Each founder and Chief management difficulties, thoughts and decisions. Do not make your investor your go-to people for them. It would oversharing.
Find a trusted person who is both wise and discreet; someone who brings the best of you. They should not tell you what to do, but to help you see clearly, think aloud and reach conclusions yourself. It's like having a go-to therapist.
4. Communicate push, not pull
I'm this great piece of Gil Hirsch advice. But what we do to daPulse is even better - we do both push and pull
.Here's how: We built a tool called an implementation council with the targets we set and the report at the meeting of the board (eg, to 250 paying customers in six months). We then give our investors full access to it.
In this way, it is both grow - because we generate the data and to live for them to see - and shoot, because they can each record to the frequency of their preference. It allows them to remain completely updated on our progress, but we do not dive into every little detail with them.
This creates a very balanced involvement: investors receive numbers live every day, and we manage the data to our preferred level
.5. Frame the conversation
You do not have to wait until you do not like what they say; frame the conversation the get-go. This is particularly relevant for the meetings of the Board.
Prepare the deck with all key performance indicators and relevant data and send it to the agenda of the meeting one week in advance. This will allow time for questions and additions to the agenda, for which you can prepare.
The bridges should consist of two sections :. A report for the same performance indicators than previous meetings, so that progress can be tracked, and the other to focus on what is most important at this moment in time
Thus, for example, a meeting of the board may be on how you plan to acquire new customers. Three months later, if you have this nailed, you can begin to focus on improving conversion, or MRO, or TROI etc. Make sure it is you call the shots and that the discussion is framed and thus productive.
What other advice do you have to maintain a successful relationship with your investors? I'd love to hear your thoughts.