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Maintaining Sound Investor Relationships: Take Care of Your Partners


Raising funds to finance a business is similar to dating and marriage. It’s true.

You woo potential investors, but once they do invest, it’s easy to forget that a good, long-term relationship is one that’s constantly cultivated.

What happens if you don’t meet financial projections? What happens if you need to change your business model or business direction mid-stream due to changes in the marketplace or the introduction of new tech? What happens if investors feel under-served or left out of important events or decisions? Problems, problems, problems.

Keeping investors happy is an on-going process - especially if the road to success is bumpier than you (and your partners) expected.

What can you do to maintain sound investor relationships?

There are a number of steps you can take, but the focus is always on open, honest communication. Stay in touch with your investors. Update them on progress or setbacks. Be proactive and always provide information before investors ask for it.

Consistently deliver:

  • Good news. Send out newspaper or magazine references to your company, links to web mentions, press releases and other corporate communications. Keep investors informed to keep them in their comfort zones.
  • Bad news. The same strategy applies. As the company owner, be the person who shares bad news instead of the owner who responds to bad news. Tell your investors what’s going on - good or bad. And don’t forget to share what you plan to do to overcome setbacks and pitfalls. Develop a Plan B to keep investors in place and smiling.
  • Periodic reports and updates. Provide updates annually at bare minimum. Better yet, quarterly or even monthly statements demonstrate that you value your investors and that makes them happy. It also makes them feel more secure.

Provide an overview report summarizing financial performance, operations highlights, objectives met, challenges overcome, new initiatives, new hires and show growth and expansion in each report.

  • Financial statements. Most investors are happy with quarterly reports, but others may request monthly summaries. Give investors want they want to keep them as investors. You prepare these statements anyway so share the docs. Why not? Your investor-partners want the latest news early. And regularly.
  • Annual reports. Even if you don’t issue general or formal annual reports, prepare a report for investors. Summarize the past year and forecast activities for the upcoming year to avoid surprises.

Investors aren’t interested in the day-to-day minutiae of your business so keep the focus of your reporting on the big picture including:

  • accounts or customers - either coming on board (good news) or no longer doing business with your company (not so good news);
  • changes in the marketplace, including new competition, new technology, capital improvements and other big news that impacts investor money;
  • changes to products or services that affect margins or profitability - either positively or negatively;
  • key additions to or departures of staff, new equipment purchases, new markets, new products. Some investors glance at these reports, others study them with a magnifying glass.

Also keep in mind that communication isn’t a one-way street. Your investors are interested (very interested) in your company’s success. Ask for help and guidance when appropriate. Make your investors feel needed, a key part of the company.

Ask these associates for networking contacts, specific expertise or to simply be sounding boards for planned changes and activities. Consider investors as more than capital-generating entities. This is human capital used for the benefit of all.

Asking for input also helps manage investor expectations. Investors who’re asked for input are more understanding when the company delivers lower than expected results.

The bottom line? Your investors aren’t mushrooms. They don’t thrive in the dark. Great investor relationships are based on consistent and open communication and a true partnership.

Make your investors more than financial stakeholders and you’ll have access to expertise, experience and new ideas.

You’ll also maintain a stable investor base - one on which your company can depend.

Business - Financial Planning

Ready to explore how Sunflower Bank can assist you? Speak to a personal banker at a branch near you, contact a specialist on our Wealth Management team, or find the right financial partner on our Commercial Banking team for your business needs. 

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This article contains general information only. Sunflower Bank is not, by means of this article, rendering accounting, financial, investment, legal, tax, or other professional advice or services. This article is not a substitute for such professional advice or services, before making any decisions related to these matters, you should consult a qualified professional advisor.