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The Investor Relations Mistake Costing You Millions
I’ve seen over 500 pitches in the last few years. Probably more. And I can tell you, the reason most startups get a hard pass isn't their product, their market, or even their team. It's their investor relations. Or lack thereof.
Founders are so focused on the pitch itself they forget the real game is building relationships. And not in the fluffy, "let's grab coffee" way. I'm talking about a systematic, almost counterintuitive approach to managing the people who write checks.
I’ve been on both sides of the table. I’ve raised money for my own companies, like RemoteTeam which was acquired by Gusto, and MovieLaLa, which we sold to Gfycat. Now, as an angel investor in over 200 companies including giants like Anthropic and OpenAI, I see the same mistakes over and over. Let's fix that.
Stop "Updating." Start "Educating."
Your monthly investor update is probably boring. I know, because I read them. A dry list of KPIs and a few bullet points about product updates? Delete. It tells me nothing I can't see in a dashboard.
The top 1% of founders don't just "update" their investors; they "educate" them. They turn their monthly email into a masterclass on their market, their customer, and their vision. They re-frame the entire conversation.
I remember one of my portfolio companies, a B2B SaaS startup in a crowded space. Their first few updates were the standard fare. Then, the founder changed tactics. Instead of just listing new features, he started each email with a deep dive into a specific customer problem they had uncovered that month. He’d write, "We thought our customers cared about X, but it turns out they're obsessed with Y. Here's the story of how we figured that out, and here’s how it’s changing our entire product roadmap."
Suddenly, I was hooked. I wasn't just an investor; I was an insider. I was learning. That founder didn’t just get my attention; he got my trust. When he came back for more funding, it was an instant yes.
Your Action Item: Next time you write an update, start with a "customer insight of the month." Tell a story. Make your investors feel like they are in the trenches with you.
The 5-Minute Favor Rule
Investors want to help. But they are busy, and vague asks like "can you make some intros?" are the worst. It puts all the work on them. I have a simple rule for my portfolio companies: the "5-Minute Favor."
Any request for help must be doable in 5 minutes or less. It’s a forcing function for clarity.
Instead of "Can you help with hiring?" try:
"We are looking for a VP of Engineering. Here is the job description [link]. Do you know 1-2 people in your network who fit this profile? A simple intro email would be amazing."
Instead of "Can you help with our pricing strategy?" try:
"We are debating between two pricing models: a per-seat model at $20/month or a usage-based model. Based on your experience with Scale AI, what are the biggest pros and cons of usage-based pricing we should consider?"
See the difference? Specific. Actionable. Easy. When I was building RemoteTeam, I needed an introduction to a key executive at a large payroll company. I sent my investor a pre-written email he could forward. All he had to do was hit "send." It took him 30 seconds. That intro led to our first major partnership.
Your Deck is a Conversation Starter, Not a Novel
Another classic mistake: the 40-page pitch deck that reads like a PhD thesis. I’ve seen decks with so much text they could be published as a book. No one reads them. No one.
Your deck has one job: to get you a meeting and start a conversation. That’s it. It should be a visual, exciting, and incredibly concise summary of your business. I’ve always said the best decks are the ones you can understand with the sound off.
I once got a deck from a brilliant technical founder. The tech was fascinating, but the deck was a wall of text. It was impenetrable. I passed. A few months later, I met him at a conference. He explained the business to me in two minutes, and I was blown away. I ended up investing. His deck was the problem, not his business.
Focus on the "why now." Why is this the perfect moment for your company to exist? And tell a compelling story about your team. In the early days, investors are betting on you more than your idea.
My advice? Your deck should have no more than 15 slides. And the most important slide is the one that shows your traction. Even if it’s small, show your progress. Show that you can execute. A simple graph that goes up and to the right is more powerful than 10 slides of market analysis.
The Art of the "No"
You will get a lot of "no"s. A lot. Most founders take it personally. They get defensive. They burn bridges. This is a huge mistake.
A "no" is not a dead end. It’s an opportunity. When an investor passes, your response should always be:
"Thanks for the feedback. I appreciate you taking the time. Would it be okay if I kept you on our monthly update list? We’re making a lot of progress, and I’d love to keep you in the loop for our next round."
I can’t tell you how many times I’ve passed on a company at the seed stage and then come back to invest in their Series A. The founders who handle rejection with grace and professionalism are the ones who stand out. They are the ones who show they are in it for the long haul.
I once passed on a company because I thought their go-to-market strategy was flawed. The founder didn’t argue. He just said, "I hear you. I think we can prove our model works. I’ll show you." And he did. His monthly updates were a masterclass in execution. A year later, I was begging to get into his next round.
It’s a Marathon, Not a Sprint
Investor relations isn’t a task you complete. It’s a system you build. It’s about educating, not just updating. It’s about making it easy for people to help you. And it’s about playing the long game.
Stop thinking about fundraising as a series of discrete events. Start thinking of it as a continuous process of building relationships with people who can help you win. The founders who get this are the ones who will be building the next generation of great companies. The rest will be stuck sending boring updates to an empty room. '''
Frequently Asked Questions
How do I measure success with this approach?
Pick one or two metrics that directly tie to your goal and track them weekly. Vanity metrics like page views or follower counts rarely matter. Focus on metrics that reflect real engagement or revenue impact.
What are the most common mistakes when mastering investor relations (the counterintuitive guide)?
The biggest mistake I see is overcomplicating things early on. Start with the simplest version that works, get real feedback, and iterate from there. Another common trap is copying what worked for someone else without understanding the context behind their decisions.
Do I need technical skills to master investor relations (the counterintuitive guide)?
Not necessarily. While technical understanding helps, the most important skills are clear thinking and the ability to break problems into smaller pieces. Many successful founders I've invested in started with zero technical background and either learned enough to be dangerous or found the right technical partner.
What tools do I need to get started?
Start with the basics. You don't need expensive software or fancy tools. A spreadsheet, a note-taking app, and direct access to your customers will get you further than any enterprise platform. Add tools only when you hit a specific bottleneck.