There are many tactical recommendations we can make (e.g., how to optimize a Board meeting - we’ll cover that in the next post). But this post is about three foundational best practices for working with investors, especially in the early company-building stages. These apply to informal interactions, monthly update-type meetings and to more structured, quarterly Board meetings. They cover three areas: mindset, openness, content.
Mindset - think of your investors as co-founders
Investors are on the journey with you and also have a good deal at stake (although admittedly, not as much as you). They want you to succeed and are willing to work hard for the company. You should view them as an extension of, and complement to, your team.
Think of them as a source of ongoing advice, partnership and even actual work with accountability for deliverables. And, importantly, you shouldn’t overdo the formality or feel that you need to always be “buttoned up”. Approaching your relationship in this way sets up the next two points.
Openness - communicate, communicate, communicate, and be honest
Investors have no way of knowing what you don’t tell them, and they certainly don’t want to discover bad news through other channels! Strive to over-communicate - you are probably busy enough that actual over-communication is unlikely.
Let them know what’s going on, what you are thinking, and how they can help. Short, informal updates outside of Board meetings are valuable to keep the conversation going and reduce the need to make Board meetings long, unproductive reviews (see the next point). And it almost goes without saying: always be honest. There is no faster way to damage a relationship than by unduly “spinning”, hiding something or being less than forthcoming.
Content - lead with the challenges
Finally, when you do communicate live, other than a relatively brief update where appropriate/necessary, aim to lead with, or at least leave ample time for, the challenges you are facing. Everyone loves to hear what’s working and what went right - but real value will come from discussing, analyzing and addressing challenges and potential problems.
In short, the worst type of updates or Board meetings are pure “presentations” - long monologues, relying entirely on slides, mostly focused on the positive, full of unnecessary detail and lacking any actionable problem-solving. Great updates or Board meetings are “discussions” - relatively short, interactive, mostly focused on challenges, and leading towards action.
Of course, while we’ve shared our view as to what makes for effective board meetings, your own investors may have different styles and expectations when it comes to board meetings and startup engagement in general so it’s always a good idea to ensure that you are aligned in terms of approach.