You have to manage your investors.
Once you have money on board, you will have to manage your investors. Whether it’s the paperwork of filing EIS1 forms so that investors may claim their relevant tax relief or to communicate company updates, there’s no getting around the fact that you now have a long-standing relationship with your investors to whom you’ll be held accountable.
Don’t worry it’s not all doom and gloom. Contrary to popular belief, investors (at least the decent ones) won’t be breathing down your neck every minute of the day and pouring over your every decision; they will be there to support you. It’s much easier if you set the standard for how you plan to communicate with your investors from day one. As best practice, we recommend sending a quarterly detailed update and a monthly high-level update to investors as well as an annual report. Whether you delegate investor relations to a member of your team, or take the role on yourself, we recommend you provide clear instructions to investors on how best to get in touch with you, particularly if you have a group of investors from a crowdfunding campaign.
If you’ve raised from a fund or an angel group, they will likely appoint an Investor Director or Board Observe who will be your key point of contact and responsible for relaying communications to the rest of your investors.
If any of the above sounds like your worst nightmare, don’t raise equity investment.