8 Tips to Get More From Your Investors and Board

source: www.inc.com - author: Mark Suster - image credit: shutterstock

8 Tips to Get More From Your Investors and Board

If you don’t ask, you won’t get, says Mark Suster.

Rob Bailey is the CEO of DataSift. He wrote a post this long weekend on how he manages the board of DataSift.

You should read it.

More importantly if you don’t know DataSift but have the need to process real-time social data or historic data it’s worth checking them out. It’s valuable to any business for marketing, customer research, product development, market analysis, etc.

In his post, Rob asserts, “You get the VCs you deserve” and the corollary, “You get the performance out of your board that you deserve.”

His argument is as follows:

  • Spend time building investor relationship long before you raise money.
  • By spending more time educating your board on your business you get more valuable advice from them.
  • Your goal should be to turn your VCs into extended members of your team to get real value from them.
  • Understanding where your VC partner sits in their respective fund and where their fund is in the cycle of its investment lifecycle will help you understand your VCs behavior.

What Rob wrote in his post is right.

Rob is one of the most driven and successful CEOs I work with.

In his tenure as CEO of DataSift, we have never missed a monthly revenue figure. He has grown our US operations from one employee (him) to a global organization of 75 employees that will finish the year with 8-digit revenues (90 plus percent recurring) and more than 350 percent year-over-year growth.

Growth like this, this early in a company’s lifecycle rarely happens.

In this period (less than two years), he has brought on incredibly talented senior execs in sales, marketing, product management, client services, finance, VP engineering and more. In his spare time, he raised nearly $30 million.

But the thing I am most proud of about Rob is that he has taken a company with a uniquely talented founder and CTO–Nick Halstead–and managed to build a very tight working relationship with Nick where we drive world-class product development without having the usual founder / CEO conflicts. Oh, and did I mention–Rob is in SF and Nick is in the UK. Rob has taken more than 15 trips to England and Nick even more to the US. It is really working.

I point this out partly out of pride. Partly out of the fact that in one week I depart for England to speak at LeWeb, attend our DataSift board meeting and generally make myself available to the DataSift team to meet their customers, partners and employees.

But mostly as I read Rob’s post, I didn’t think it did justice to the superlative job he has done at managing his rather boisterous board.

It consists of a highly intelligent and opinionated founder–Nick Halstead, a wallflower–yours truly, quiet-as-a-mouse Roger Ehrenberg of IA Ventures, true-to-his-heritage Rory O’Driscoll from Scale Ventures, and then there is the one true gentleman of the bunch–Chris Smart, who is non-exec chairman. In addition to helping manage the board, Chris also helps represent the interests of the angel investors / common stock holders.

Oh, and did I mention:

Roger is in NYC. Rob and Rory are in NorCal. Nick and Chris are in London. And I am in Los Angeles. That in itself is quite a challenge.

So what are Rob’s secret hacks that he didn’t spill in his blog post? 

Here is what I imagine Rob would say were his most effective tools. Sincerely, he is better at managing his board than any exec I have worked with.

1. Send email updates frequently.

Rob is an over communicator. When it comes to your board this is something to emulate. If you have investors or board members that have wide relationships, you can get significantly more value out of them by keeping them informed.

Why?

Investors and board members who know your strategic objectives can advocate on your behalf when they have chance encounters with your partners, customers or potential future investors. The more they know your strategic objectives the more laterally they can act on your behalf in key situations.

Investors and board members who know your key talking points (simplified marketing messages) will help you penetrate the consciousness of even the most hard to reach individuals. I am on a board that does business with Yahoo! One key board member knows Marissa. So naturally, we’re pushing for him to drop critical information when their paths cross organically.

Trust me — that kind of encounter can mean the difference between securing a contract, protecting yourself from getting turfed or getting acquired one day.

Equally each of your board members are probably on 5 to 10 boards. Each of your angels or seed investors may have 20 to 30 investments.

When they meet Marissa — you want them talking about you more than the others.

And as Rob points out — if you email members with short updates more frequently they are more up to speed when you do need them to weigh in.

How much is too much?

I guess you’ll have to ask them but I’d err on the side of more and let them tell you to dial it back. I’d err on the side of shorter updates versus longer ones. Key point — if your emails are as long as my blog posts you’re forked. Board members will file them rather than read them. Remember — they have 10 other boards.

Make your emails actionable. If you want somebody to take action, make it clear what you want them to do.

2. Send text messages for rapid responses

Any CEO worth his or her salt knows that her investors get an insane amount of emails and often spend eight plus hours a day in meetings (board meetings, pitches, partner meetings, LP meetings, corporate relationship meetings) so often email is done on the run on one’s iPhone or in the early morning / late evening.

It is common for an investor to read the email but not immediately reply. After all — she is just trying to get through 99 unread emails.

I always encourage people to send the email anyways with the full description of what you want but if the email requires an action then send a follow-up text 24 hours later. It should simply say, “I wanted to call your attention to the email I sent yesterday — it has one action for you.” Or, “I sent u an email. Can you please call Stacy to ask about our BD deal? Hoping to hear back tmrw.”

User Rating: 5 (1 votes)