Managing Investor relations with CRM

As a startup founder, your desk is often piled up with numerous tasks, and new challenges are always coming your way. You focus on managing your team, running the business, getting new customers, and expanding your numbers.

Amidst all this work you strive to engage investors, secure funding, and maintain ongoing communication to keep them informed. This whole investor relations process is a full-time job on its own, adding another layer of complexity.

Just like a founder finds it difficult to manage a large number of investors, even well-structured VC firms can find it challenging to handle the large pool of startups they need to assess. 

This often leads to founders relying on spreadsheets or other common tools for organization. But sadly also in many cases they just use their memory. Insufficient workflows & processes make it difficult to keep up, resulting in missed funding and unhappy investors.

One solution recommended to be used is a CRM system, typically used for sales & key account management but also effective for managing investor relations.

But what exactly are they? In this guide, we’ll dive deep into the importance of investor CRM for startups and how they can help manage invaluable investor relationships.

What is an Investor CRM?

A CRM, or Customer Relationship Management system, is a tool for businesses to organize and manage customer information & engagement in one place. A CRM assists in managing important accounts, engaging with customers, exchanging information, and efficiently handling leads as well as following up with them.

An investor CRM is designed specifically to manage investors. It helps in managing both new and existing investors, ensuring that communication is ongoing and effective. 

It’s like having a smart assistant that stores comprehensive data about each investor interaction. This includes all the data related to your deals, including names, contact details, sources, stages, notes, tasks, reminders, investment thesis, last interactions, additional information to be shared, upcoming touchpoints, and more.

Founders utilize Investor CRMs to manage their investor funnel through different steps, from lead generation to getting them interested to finally getting them closed.

Features of Investor CRM:

These are common features an Investor CRM often includes:

Deal pipeline management: Tracking the progress of investor’s interaction in a pipeline, as well as automating your workflows and tasks.

Contact management: Keeps track of individual investor contacts. You can plan, monitor, and execute meetings, calls, emails, and reminders.

Team functionalities: Facilitating teamwork with tools like shared calendars and task assignments and keeping everyone on the same page.

Reporting tools: Helps in preparing and sending updates to investors.

Analytics: CRMs provide you information on engagement with your leads and contacts to follow up based on data insights.

Beyond these core functionalities, some enable you to further specialized functions, such as access to investor databases, data rooms, and more. 

A good Investor CRM should also include a clear and simple UI & UX:

Why do Investor CRMs matter?

For startups, maintaining regular contact with investors and tracking potential leads requires an organized system, which also investors will appreciate, because they hear back from you and you actively keep engaging with them.

Efficient investor screening:

Investors often spend a lot of time evaluating potential startups who reach out as well as startups they find themselves. So the easier startups make this process for the investors, the more efficient they can screen. An Investor CRM streamlines this process and makes it easier for startups to make the life of their investors easier.

Insights on progress:

Investors appreciate regular insights into your progress. Even if you don’t have overwhelmingly positive (or negative) news to share, providing regular updates as timely reports must be a core part of your IR strategy. They want to know how the business is doing and what the plans are. With features like reporting in CRM, founders can give important monthly updates to investors & maximize their fundraising potential, and foster strong investor relationships.

Customized investor engagement:

Investors want startups to answer their questions and address their concerns in a way that feels customized just for them. Startups can use tools like reminders and notes to make sure they don’t forget to respond promptly. Being quick to reply shows investors that the startup values their input and cares about what they think.

Enhanced team collaboration:

Investors look for teamwork in startups during fundraising because it helps things run smoothly. When everyone works well together, they can easily share and update information. This teamwork shows investors that the startup is organized and capable of achieving its goals.CRM system can act as a central hub for startup operations, where your team can easily access, contribute, update, and share data, fostering better collaboration and productivity.

Timely follow-ups:

Investors like it when startup leaders use tools to keep everything organized and make sure they don’t forget anything important. It shows that the startup team is on top of things and can handle the challenges of working with investors confidently. Founders can track and receive reminders for pending tasks, maximizing the fundraising process and ensuring no investor-related tasks are overlooked.

Building trust and confidence:

Investors want to feel confident that their investment is being taken seriously and that they have a good relationship with the company they’ve invested in. Regular communication and relationship-building activities facilitated by CRM systems help establish trust and confidence between founders and investors.

What is expected?

Investors expect startups to maintain regular communication, provide timely updates on company progress, address investor inquiries promptly, and demonstrate a commitment to transparency and accountability in their investor relations efforts.

Efficient communication:

Investors expect startup founders to maintain open communication and promptly respond to their inquiries or requests for updates. They value transparency and efficiency in interactions, expecting founders to manage communication effectively. By staying connected and organized, founders demonstrate their commitment to building strong investor relationships.

Monitor investor feedback & response:

Investors expect startups to promptly address their feedback and inquiries by efficiently managing investor interactions. This can help startups address any issues or concerns investors may have, also being transparent about how they are addressing investor feedback and show investors that their input is valued.

Individual replies:

Investors expect startups to answer investors according to their exchange and make it specific. If a founder just rattles off standard answers and doesn’t bother to answer their individual question, this will create problems. Startups can customize messages to address the specific concerns and priorities of outbound, inbound, and target investors.

Regular updates & reporting:

Investors want startups to keep them informed about how things are going, whether it’s good news or bad. With the help of an investor CRM system, startup founders remember when to send updates or schedule meetings with investors. Additionally, it facilitates reporting, offering a comprehensive overview of the business that many startup entrepreneurs find challenging to obtain.

Clear data management:

Investors expect startups to provide clear and comprehensive data through features like the data room. They anticipate access to essential documents such as financial statements, business plans, and legal documents, enabling them to conduct thorough due diligence. Investors value transparency and accuracy in the information provided, ensuring they can make well-informed investment decisions.

Issues & Challenges:

Managing investor interactions without a proper system can be overwhelming for startup founders, that can lead to various challenges such as:

Limited time, focus, and organization:

What is the best way now to start assessing your investability with all the above-mentioned elements in mind? You don’t have to look far. DueDash enables you to prepare all required data to see how investable you are and become more investable.

Lack of awareness about investor management:

For startups, the fundraising process can feel overwhelming if they lack a clear understanding of the pipeline. They may struggle to approach investors and be unsure of what to expect at each stage. Additionally, they may find it difficult to follow up with investors and track their progress through the pipeline.

Missed opportunities:

Without proper organization, there’s a risk of missing out on funding opportunities or failing to nurture promising investor relationships, potentially hindering the startup’s growth

Dealing with complexity:

Startups often find CRM systems complex and challenging to use effectively, especially when applied to managing investor relations. They struggle to navigate the intricacies of the CRM software while maintaining strong relationships with investors.

Interpreting analytics:

Startups may face difficulties in interpreting the data effectively. Without proper analysis and understanding of investor behavior and trends, startups may struggle to derive actionable insights to improve their investor relations strategy.

Benefits of DueDash:

What is the best way now to start engaging with your new & existing investors with all the above-mentioned elements in mind? You don’t have to look far. DueDash enables you to build meaningful relationships with investors as well as provides you with insights at every stage of your fundraising process.

Centralized data management: DueDash enables you to keep track of all your investor communication in one system, and ensure that open tasks are assigned and done. We allow you to centralize all investor-related data, including contact information, notes, and exchange history, in one place. Easy access to investor contacts.

Investor pipeline management: DueDash offers a deal and connection management system, for tracking interactions with startups/investors. This pipeline monitors investor relationship progress from inbound to pass. Founders gain clear visibility into their investor pipeline, facilitating efficient due diligence progress via drag-and-drop actions and menu options.

Streamlined communication: DueDash streamlines communication with investors. Enhance engagement by sending your first message along with follow-ups to investors with your regular updates function. 

Enhanced team collaboration: With DueDash, you can collaborate seamlessly with your co-founders and team members. You can share notes, exchange insights about investor conversations, and coordinate follow-ups with your team members.

Contact management: Founders can manage all their investor contacts in one place. New Contacts can be added easily, and keep track of the current stage of each investor in your pipeline.

Data insights and analytics: Founders can get valuable insights and analytics that help them understand investor engagement, track performance metrics, and make informed decisions. 

Data room capability: DueDash provides startups with a structured data room, offering a secure space to store and manage essential documents like financial statements and business plans. Startups can easily share and collaborate on documents with potential investors, partners, and other stakeholders, ensuring confidentiality and ease of access.

How to use DueDash to be more investable

Steps to start using DueDash for data management:

  1. Create your profile: Begin by setting up your DueDash account.
  2. Collect Relevant Data: Complete your DueDash profile with core data, such as the 5Ts (Team, Timing, Traction, Technology, and Total Addressable Market) and Key Performance Indicators (KPIs) under the Metrics & Funding section 
  3. Upload Core Documents: Utilize the data room feature to upload and maintain core documents at different levels.
  4. Start Sharing Information: Once your DD profile is complete, start sharing information with investors. Grant access to investors using sharing your DD profile link.
  5. React to Investor Queries: Respond to investor questions and requests for additional information by allowing access to Data room levels or through inbuilt messaging systems.
  6. Send out updates: This data you collect and manage can be sent as part of investor updates, simplifying your investor reporting.
  7. Keep data up to date: Check back in regular intervals to keep your data current and relevant.

Get started with your investor engagement today and have your own investor CRM at hand.