It’s important to keep your investors informed. Maintaining long-term relationships with your investors is one of the most important parts of maximizing the added value that strategic investors can provide to your business. As the founder of a company, it’s important to put effort into your relationship with your investors because they care about the well-being of your business. Just like any relationship, it’s important to have clear communication in order to keep maintain a strong and enduring partnership.
Many early-stage companies choose to provide investor updates on either a monthly or quarterly basis. These periodic updates may include information about key metrics, traction, and any business issues that have arisen.
As a matter of courtesy, you should always notify your existing investors of a new financing round. Your investor agreements may also legally require you to notify existing investors when future capital rounds take place.
Some investors from previous rounds may also have the legal right to participate in new rounds of capital raising. Maintaining good records of each investor’s holdings and contact details is vital for companies that are raising multiple rounds of capital.
When your startup achieves growth you may receive offers to acquire the business. The terms of your investor agreement may require you to notify the investors of any such offers.
An initial public offering is the offering of shares in your company for sale to the public and the listing of those shares on a publicly traded stock exchange. An offering of this type may need to be notified to existing shareholders in advance.
This post was written by seedinvestedu on April 7, 2016