David Cummings on Startups

Ask Investors for Help

Written by

David Cummings

in

,

Early this week I was talking to an entrepreneur about his company, market, competitors, and investors. When asking about his investors, he said they were great but super hands-off. Probing deeper, he said he has to reach out to them for help as things are very casual. After thinking about it, I think this happens more often than expected and that entrepreneurs should be more proactive about asking investors for help.

Here are a few thoughts on asking investors for help:

  • Most investors want to add value, so asking for help isn’t imposing
  • Include asks for help in the regular investor updates
  • Before an investor writes a check, ask them how they’d like to help, if at all (if they’ve already invested, and you don’t already know the answer, ask this question)
  • Consider the area of expertise for each investor, and lean on them when a relevant question comes up

Investors do want to help and many entrepreneurs don’t regularly seek them out even though they have a vested interest in the success of the startup. Entrepreneurs should ask investors for help more often.

What else? What are some more thoughts on asking investors for help?

Comments

2 responses to “Ask Investors for Help”

  1. theangeladvocate Avatar
    theangeladvocate

    A response I have heard numerous times is that entrepreneurs don’t ‘respect’ the investors. When I asked clarifying questions, essentially what was said was that entrepreneurs typically don’t communicate at all, and when they do, it is in a fashion that feels like there is an agenda, an urgent ask associated. Taken to an extreme, it is a form of extortion – ‘help or we will struggle more and your investment might be at risk’..or some similar logic.

    Entrepreneurs need to make communication part of their natural practice without the perception that there is an agenda. Communicate to engage their heart as well as their mind (and hope for a return of, and possibly a return on, their money). Investors WANT to care about the entrepreneur/startup, but they can’t do that if they feel like they are being taken for granted.

    That way, they feel more compelled to respond to the asks, refer the startup to others (without the fear that the startup will take the referral for granted as well), and help with the next funding round.

    Reply
  2. Dave Williams Avatar
    Dave Williams

    This is assuming that the investors can be helpful. Also, some investors like to be hands off, but I agree that if the entrepreneur doesn’t provide the resources to help- monthly and quarterly investor summaries and ongoing interactions- phone calls, breakfast, lunches, etc that you can only get as much as you give. It is key to have at least 1-2 strategic investors early and not to be counting on just the money guys or to not have quality-experienced-reputable resources available to help mentor you through key decision making. Not having these people around almost guarantees the failure of the startup, or at least at a much higher statistical rate of failure than startups with a strong advisory network. Be careful of this rookie mistake.

    Reply

Leave a reply to Dave Williams Cancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

More posts