How to get the most out of your investor relations in 2023

Contributor Vidya Raman

Vidya Raman is a Partner at Sorenson Ventures.

More posts from this contributor The product-driven growth playbook

For founders coming off a tough year and planning for the new year, this is a great time to re-evaluate your relationships with the investors you work with.

I'm lucky enough to be able to work directly with nearly a dozen early-stage startups and observe the interactions between dozens of investors and founders. From all of this, I've seen some founders do a better job than others of harnessing the strengths and wisdom of their investors while looking out for trouble.

What can founders do to revitalize their relationships with investors? Here's a short list of do's and don'ts from what I've learned over the years:

Know your investor

As with any long-term relationship, knowing who you have chosen to work with is critical.

Investors, like everyone else, have distinct personality traits and sometimes associated flaws. This can be hard to assess at first, but make sure you don't ignore it.

Here are some examples of personality traits I've seen and how founders can learn to work with them:

Be ruthless about how you spend your time, especially with your investors.

Some investors could improve their monitoring. Maybe they've invested too much and need more time, or they're just scatterbrained. Whatever the reason, if you need something from them, it's your job to be organized about your requests and then follow up on them regularly. Some investors react too abruptly and unproductively to the first sign of poor trading performance. They can see doom and gloom everywhere and echo every negative sentiment in the market. It is difficult to have a balanced and open conversation with such people. It's best to have some well thought out options in writing before committing to them. Some investors may have a huge ego that surfaces when you disagree with them. This trait is the hardest to deal with, as any discussion is not based on substance but on power dynamics. If you have such an investor, be sure to have fact-based discussions and draw the line (often and early) on what decision to make. Tap investors for more depth, but be careful how you do it

If you have an investor who is actively investing and committed to their portfolio, they will be well versed in market and industry trends.

They can be a valuable source of information for questions such as:

How are other businesses at my stage growing each year? Who is the best sales recruiter for a B2B software company? What ratings do companies in my stage get? How does investing in my space feel these days?

However, founders may wish to have deeper conversations with their investors. Here's a typical example of an in-depth topic and some practical do's and don'ts: