Following up with investors: taking ‘keep in touch’ at face value

Photo by Adam Solomon on Unsplash

Written by OMERS Ventures Associate Lauren Epstein

Imagine a fairly typical scenario: you are the founder of a company who connects with an investor — an email exchange, a quick chat, or maybe even a pitch meeting — and the investor eventually says something like: “We really like what you are building, but we don’t think it is quite the right fit at this time. Please keep us updated and let’s stay in touch.”

Sound familiar?

The reality is that this might be happening more often these days while many investors are heads down working with their portfolio companies (as well as working from home and juggling family obligations) and as a result may not be as actively engaged in exploring new opportunities.

This type of investor response can present a conundrum. Is this just a nice way of brushing you off? What does “stay in touch” mean? What kind of “updates” are appropriate?

As someone on the other side of the table, I definitely wouldn’t presume this is coded language for an outright rejection. If you are invited to keep in touch, do it! Never assume you’re out of the game.

Practical advice for follow-up communications

Ok, so then how do you do it? How often do you engage? How often is too often? How do you avoid getting ignored? Alternatively, what can you do to stand out?

This kind of outreach is important and presents an opportunity. Communication is the foundation of building a relationship, which is pivotal in venture fundraising, especially at the early stages. As you keep in touch with a potential investor, you are not only updating them on your progress, but also working on developing a relationship that may become a long-term partnership.

Goals
Let’s start with the goals of these follow-ups. Within the context of your company, you likely have various specific things you want to accomplish. Try to keep those in mind as you plan your approach. In addition, here are a few other goals I would suggest considering:

• Stay on the investor’s radar.
• Show progress.
• Get the investor excited about what you are building.
• Demonstrate your market opportunity and your ability to seize it.
• Build the investor’s trust and confidence in you as a founder, leader, and innovator.
• Be likeable and make the investor want to work with you.

With those goals in mind, let me offer some advice from the investor perspective.

Format
First, format. This is easy: email. It is true that every investor has different workflows, but you cannot go wrong with email.

Purpose
When you are crafting your messages, be outcome-oriented.

If you want to generate a response:
It should be a personal email, relatively short, with a call to action. It helps if you can create a sense of urgency: e.g. you have a demo day coming up, you are about to launch a new product, you are in financing discussions with other investors, etc.

If it is simply an informational update:
Consider providing a few (e.g. 3) exciting updates and state 1 next step (e.g. when to expect your next update, plans for your next fundraise or product release, etc).

Cadence
On the question of timing: for this kind of outreach, there is a delicate balance between a) so often your updates become tedious and b) so infrequent that you fail to stay top of mind. As a starting point, there are some specific moments when an update email may be particularly appropriate:

• Launching fundraising
• Significant product or technology milestone
• Key traction achievement
• Prominent media coverage
• Other material event for the company

Outside of these inflection points, what is the best cadence for regular updates? It is somewhere between monthly and quarterly. The appropriate frequency may depend on: your company’s stage; your technology or product development speed; industry developments; and your relationship with the investor. One thing is definitely true: Weekly is too often. Remember this is for significant business updates, which are unlikely to occur on such a frequent basis.

Tips
Finally, I wanted to share some specific suggestions based on my experience receiving founder update emails:

• Follow through. If you commit to doing something, do it. Follow-up when you say you will.
• Be clear, upfront, credible, and real. Too much marketing or spin is off-putting.
• Treat investors like humans. When you send me an update email, I am just another person reading it, albeit with an investment lens.
• Be yourself. You too are a human! Don’t be afraid to show a little of who you are.
• Create interest. Make the content compelling, thought-provoking, and easy to digest (hint: visuals are helpful!).
• Be concise. Enough said.
• Be persistent. If an investor doesn’t respond to one or more of your emails (especially those that are basic updates and don’t seek a response), stay the course.
• Be helpful. If you come across third-party content that seems relevant for a particular investor, send it along.

As with so much of this kind of advice, you should do what feels right for you and your company. Following your gut is often a good rule of thumb and will also help you come across as more genuine.

On the surface, these update communications may appear unimportant, but they could have a huge impact. Being successful at this seemingly low-leverage activity could lead to an investor putting money into your company. The ball, as they say, is in your court!