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Investors have seen it more often than they care to admit – after multiple meetings, a promising startup receives a check from them and, soon thereafter, disappears from the face of the earth. One could say the startup swindled the money from the unsuspecting investor, but this might not be the case at all. More often than not, the founders of the company simply didn’t think it’s important to send regular updates to the investor. Only when the startup needs more money or gets into trouble, the founders reach out to the latter.

Let’s be honest, the odds of getting the support they need at this stage is not in their favor. If you put yourself in the shoes of an investor, would you give more money to someone you haven’t heard from for 6, 9, or more months, even if you liked their team and business idea back then? Probably not.

Here are a few things entrepreneurs can do to build strong relationships with angel investors and increase their chances of getting follow-on funding:

1. Regular email updates

Every 2 or 3 months, send your investors (and advisors) an update highlighting recent successes, progress made, new hires, etc. This could be a great opportunity to talk about your challenges, metrics you keep track of, and asks. The last point is important, because if you need introductions or recommendations, the investor might be in a position to put you in touch with people or point you in the right direction. Also, don’t hesitate to talk about your current capitalization status – capital raised, monthly burn rate, runway. Investors would love to see this. It’s rare and shows additional sophistication on your end.

2. Demonstrate momentum

In the world of startups, momentum is currency. You put your startup on the back burner and spent the last 9 months focused on getting your Ph.D.? This is great for you, but good luck exciting investors to back you up. They’d much rather invest in someone who just recently won a startup competition, constantly speaks at events, or won a government grant. Even better, someone in their network just recently put money in your venture? The fear of missing out (FOMO) is strong with some investors. They might like to get a piece of the action. Give them the opportunity. Be active in the community and never slow down. In the eyes of investors, lack of growth signals the impending death of a startup.

3. Teach them something

Most angel investors are successful entrepreneurs in their own right. There might be multiple reasons why they take the risk to invest in a startup, but getting a mediocre return on their investment is surely not one of them. Angels would appreciate a 10x return if the startup hits it out of the ballpark, but most of them know that the average is closer to 0. If the historical average stock market return is 10%, why bother investing capital in a startup that has an approximate 90% chance of failure? It turns out some angel investors want to pay it forward and support the next generation of entrepreneurs, remain active in the entrepreneurial community, or even simply for bragging rights. Sharing stories of successful portfolio companies around the Thanksgiving table might be important to some. Surprising as it may sound at first, one of the main reasons why angels might want to invest in your venture is because they’d like to learn more about your industry or a specific market trend you’ve identified. Who knows, this might be the next big. Remember FOMO?

These are the legs of the proverbial three-legged stool of a successful relationship with angel investors. Make the experience memorable, in a good way, and they’ll open doors for you and move mountains you didn’t know were there.

This content was first published by SCORE Philadelphia on December 31, 2020

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