The investor relations chapter starts very early for the founders. As soon as the first attempt is made to obtain funding into the venture, the need to manage the investors commences. Starting with the initial investment pitch, preparing the investment deck, putting the projections together and convincing the investors to invest their capital becomes a huge focus for the founders. Selecting the right set of investors as partners to help support the company growth is critical. Investors usually bring along a network effect of professionals like lawyers, investment bankers, marketing and public relations, market players and contacts, and finally other investors who fund subsequent series of funding.
Founders often need help to work on their investor pitches in addition to managing the day to day operations of their business. For each pitch, founders want to present the most latest financial information to show how their startup is progressing, and to showcase the growth that has been achieved. Often projections are required for high probability pipeline sales where negotiations are in progress or almost complete for new customers to onboard.
Once the angel seed rounds or Venture capital rounds are completed, the need to properly manage the Cap Table becomes super important. Secondary sales are often held and there could be investments from friends and family that the Series A or later investors acquire. The funding rounds are often preceded with due diligence activities, legal contracts and corporate secretarial activities for share transfers.
Ezee Pte. Ltd. has experience in dealing with these matters and can help founders in their startup journey with managing some of the finance related aspects of capital raise and funding.
Board of Director Meetings
Another crucial task for the CFO is to be able to manage the investor board meetings well. Investors typically are hands off and are not involved in the day to day operations of the business. The Board of Directors meeting is an opportunity for the Investors or their representatives to get a deeper understanding of the business, the specific areas where the management is currently focused on, and what the long term direction and market opportunities are.
Key facts, achievements, current initiatives and growth prospects should be clearly outlined in any Board Meeting. Management should come prepared to answer any question that the investors may raise and should be able to provide accurate responses to inspire confidence. Proper preparation must precede any Board Meeting, the presentation deck should be thoroughly vetted for data accuracy and projections presented should be realistic despite being optimistic and aggressive, and should provide a balanced view of the opportunities and threats ahead. While over optimistic forecasts may win a few initial compliments, an inability to deliver on the numbers may cause unintended consequences down the road.