What is investor relations?
Investors are critical stakeholders in your business. Investor relations strategies are designed to manage these critical stakeholders by:
- Communicating business strategy
- Reporting financial results
- Sharing financial outlook and budgeting constraints
- Solicitating additional equity capital
What are the best strategies for building investor rapport?
Investors care about your business success. They also have opinions (often different from your own) about what success even is. The best investor relations strategies build confidence in YOUR leadership and business plan while remaining open to valuable input from investors. Your investor relations duties include:
Building a strong management team.
No investor wants the CEO to do everything. By hiring a fractional CFO, you add financial expertise to your team and build confidence through professional CFO investor relations.
Respond appropriately to investor inquiries.
Nobody likes to receive long rambling emails, especially your investors. Avoid blundering communications by first collaborating with your CFO on appropriate investor communications and financial reporting.
Know high level numbers and defer the details to a CFO.
As the CEO or founder you are expected to know the high level financials like revenue, EBITDA, CAC or LTV. But you should not be responding to the detailed questions – that is the job of the outsourced chief financial officer.
Avoid inadvertently committing fraud.
Anything you say to investors is a legal representation subject to federal fraud regulations. Avoid making stupid errors, such as given cash-basis revenue figures or contradicting earlier communications, which could jeopardize future funding rounds or even result in jail time. Good CFOs understand fraud laws and will advise you what to and what not to say.
How to hire a CFO for investor relations
There are thousands of Fractional CFOs available to hire – how do you pick one a good one? To vet a CFO for investor relations skills, ask the following questions:
How many different boards of directors have you presented to?
An experienced startup CFO should have spent time working with several different types of investor groups.
Do you use a template for board presentations, or do you customize your approach?
Templates are not the answer. There is no effective one-size-fits-all approach. Board of director and investor presentations should be customized for your business, and even for each quarterly meeting!
How do you prepare for a board meeting?
Look for answers that imply they would collaborate with you and your staff. Listen for things like, “let’s first discuss the story we’re telling” or, “I would adjust add a slide to emphasize our strategic focus on X.” Avoid CFOs who respond with a focus on the numbers, like, “I would update the forecast” (which is a given) or “I would update the figures from last meeting.”
Do you work alone or use a team?
Fractional CFOs at CFOshare are supported by a team of analysts to ensure you get the most collaboration and input before each board meeting. That means your money goes farther than hiring a lone-wolf CFO without support.
Schedule a call now
Learn how CFOshare’s investor relations services can help build confidence in your business.