How start-ups and SME’s gain the trust and confidence of investors
Investors are important partners for start-ups and small and medium-sized companies (SMEs) for financial support, strategic advice and the promotion of growth-oriented business development. Of course, investors also expect that their involvement will be worthwhile over the term of the investment.
In order to gain and justify the trust and confidence of investors, their expectations must be managed with effective financial communication. Financial communication that is active, convincing and personal both before and during the investment. I have put together some quick tips for start-ups and small and medium-sized companies (SMEs) below, which may help in the search for investors or venture capital and can also be used within the framework of an existing involvement (Investor Relations).
1) Impress investors with your equity story
Investors want to be convinced of the growth potential of your start-up or small or medium-sized company. Build the bridge from the past to the future with an equity story. With this equity story you show the strengths of your business model, your company’s strategy, your profitability, as well as market opportunities and growth prospects. Your equity story should be convincing and informative. Present your unique selling point in detail and show what makes you and your team trustworthy. The better you present your values, the better investors can evaluate your value and an increase in value.
2) Be confident and in control in front of investors
For initial public offerings (IPOs) the securities prospectuses together with the equity story help investors to make a decision regarding an investment. The company roadshow is also very important, at which the executive board showcases itself in front of potential investors and gets to know them personally. Presentations are also an essential communication tool for start-ups. For instance, a pitch deck must answer key equity questions on a few slides, e.g.: What problem do you solve as a start-up? Keep it short and sweet when it comes to pitch presentations, for start-ups generally only three to five minutes. Both executive boards and founders manage a confident and effective presentation in front of investors when they internalise their equity story, concentrate on the essentials and optimally prepare for the presentation. It is tough work to convince somebody personally. Take on the challenge!
3) Active and transparent communication with your investors
With an investor you have a shareholder on board, who is convinced of you as an executive board or founder and of your business model and your growth potential. It is necessary to justify this trust and confidence – particularly by fulfilling your promises. Expectations are successfully managed with active and transparent communication. For listed companies this process is linked to numerous requirements, e.g. the compilation of quarterly reports or financial statements or holding the annual general meeting. Start-ups should consider the consultations with their venture capitalists here. Do not adopt a casual approach or underestimate them. Prepare your communication in a targeted manner. Be present and fulfil your responsibility, particularly in the case of unexpected and negative developments, and communicate personally.
You gain the trust and confidence of investors with active management of expectations. This is achieved with effective financial communication, which also helps boost your reputation and level of awareness beyond the capital market.
My skills for your success (selection):
- 10 years of experience on the capital market (Investor Relations at two S-DAX companies)
- Communication of large-scale projects: IPO, merger, acquistions, change of ownership, financial transactions as well as crisis, integration and change processes
- Over 300 Investor Relations (IR) projects, build-up of IR departments and numerous awards (incl. “manager magazin – Best management report for newcomers on the stock market”)
You have questions about my offer or a specific requirement? I am happy to help you and look forward to hearing from you.