February 14, 2022
If you’re successful at raising capital, investors have jumped into the passenger seat with you, ready to be taken on a journey.
It’s likely a long trip, with the average time to a liquidity event being about five to seven years. Due to later IPOs, this road is getting longer. During this long trip, investors want much more than to generate a return at the end of the journey.
Investors want to benefit themselves and their own personal and professional networks along the entire journey. They desire a halo effect.
When they bring people together on a deal, they want the deal to make money. When they recommend a product, they want the product to be fantastic. Investors typically deeply understand the value of relationships, so they want to create positivity for themselves and others throughout the long journey.
Design your shareholder relationships and communications around benefiting investors’ extended personal networks. Investors will gladly be your advocates and serve as an essential extension of your growth marketing team.
Here’s how to help investors market your company.
First-time founders typically rush to send shareholder updates when times are good and are filled with dread when times are tough. Shareholder updates should inform about traction, wins, losses, worries and risks, but their most important function is engagement. Remember, investors want to be part of the journey and tell others about it. A great shareholder update gives people something to talk about.
Before sending your next monthly email, look for ways to insert shareable moments into your update. Let’s say you make software for a new kind of smart home gym. Will your investors share that you hit 500 users? It’s excellent for you, but not very interesting or beneficial to anyone else.
But maybe you have data that shows that only 20% of adults can do one pull-up – that’s a fun fact that people might share with their networks. Maybe you have a unique discount code or gift that they can give to a family member or colleague — that’s even better. Include a shareable fact or exclusive offer and you’ll see them spread the story.
Good growth marketers often experiment, tweaking their content and even products according to demand. Experiments are typically segmented by channel; for example, you might change the pace of social media updates to determine the optimal frequency and time. Good experiments can also be done with an intentionally small but representative sample size – consider walking up to the 15 people you share a WeWork space with and asking each one if they would buy your new product.
Asking your investors for help with an experiment is much less demanding and a lot more fun than asking for referrals. In your next update, ask them to help you run an experiment and sample five of their friends and family with a question that you care about. You’ll get some interesting insights and you’ll have your investors spreading the word and involving your company with their personal networks. People love to help discover information rather than being asked to help find potential customers or partners.
Building viral loops into your product was popularized by companies like Dropbox, which famously grew by offering a fantastic user referral program. LinkedIn would be another example that, rather aggressively, allowed their users to invite their entire contact files, creating massive network effects.
The growth marketing mindset calls on us to create a spreading effect into our products and user flows. You might offer your existing customers a discount for inviting their friends or sharing your software on social media.
With the same tactics, help your investors turn their networks into advocates as well. Think about the investor as the marketer and their connections as the audience. How can you entice their networks to engage? Can you make an offer that can be shared “only with the first 100 people that sign up”? Can you offer a closed beta program for only the “friends and family of investors”? How about doing a podcast with one of your investors that their network will hear, or simply getting them to help arrange a 5K charity race? Think of how you can build spreading effects into the shareholder relationship.
If you’ve started a company, have you ever noticed that everyone asks the very same question when they find out about it? It seems 99% of people ask, “How many people do you have?” We all know that headcount can be a very poor measure of success, but it’s one straightforward metric every average person cares about.
In a way, it’s true – the question gets at a very practical reality. You may have a great idea or a little website, but can you really marshal an army to get something big done? Get ready to hear the headcount question a lot.
Likewise, while investors may sometimes be reticent to share your sales or traction metrics, everyone loves sharing open jobs. Again, people love to see real opportunities, and it’s a positive thing to share about on social media. Make sure you tell your investors about your open headcount and, most importantly, give them particular jobs with a link for them to share.
Jobs are excellent fodder for LinkedIn, and investors are typically glad to assist, helping their network access opportunities. Open jobs are the type of positive, mutually beneficial events that investors like to share with their networks.
We discussed giving investors coupon codes and special discounts, but how about formalizing an ongoing perk for them? Perks are another great way to help investors feel connected and engaged with you and give them insight into the benefits of your product.
Cruise lines are the most classic example of providing perks to shareholders, as many have longstanding programs to reduce prices for shareholders. Also, in the public markets, Tiicker works with many brands to design special programs for shareholders. These large brands are doing this for a good reason – they understand the long-term value of investor loyalty.
Can you provide a long-term program for your investors? Perhaps you could provide your SaaS at a 75% discount to your shareholders and employees at their firms and owned companies. Do a gut check of people’s engagement on your cap table by seeing how many of them are customers. For the investors who aren’t customers, ask why and then create programs to give them irresistible opportunities.
Finally, in your project to turn your investors into advocates and marketers, ensure that they have shareable materials. Many of the documents you send to investors are likely confidential. Perhaps you send them a deck with business plans or your financial results. If that’s the case, make sure to send a shareable deck as well and make them aware that you don’t mind them sending it to anyone or even publishing it.
Publicly traded companies must publicly disclose presentations that contain material information. Think about it like a public company – create one deck that can and should be shared with everyone and even published and then another that you only send to “insiders” that is highly confidential. In your public deck, exclude specific tactical plans, key competitive insights and traction points that hold strategic significance.
If you value investor relationships and understand why and how they will help you out along the way, you’ll build valuable lifelong relationships. Investors want to help you, but in my experience, you have to help them help you. Give them easy ways to help market your business and share your vision.