5 Reasons You Should Consider Investor Relations
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Many young entrepreneurs tend to forget about their investors during their period of investment. Failure to communicate with your investors professionally and in a timely manner is not a strategic business approach. Investor relations create opportunities to communicate with investors or shareholders, both informally and formally. If you are too busy to manage this alongside your business, this article discusses some benefits to seeking out the services of a consultancy to manage this aspect of your business.
1. Improved Communication
Investor relations (IR) consultancy can help companies enhance their chances of operational success by communicating effectively with stakeholders and investors. Matthew Ocko, a seasoned angel investor with interests in several companies such as Data Collective, Fortem Technologies, Pierson Labs and Rocket Lab, would not like to be treated like an ATM by his prodigies. You don’t just send a random email to your investors whenever you need additional investments. Instead, communicate consistently, build trust and encourage investors to invest more when required.
With the services of an IR consultant, your company may find it easier to communicate with stakeholders and institutional investors in a more effective manner. The consultancy can help you propagate your company’s shared vision so that investors are properly informed on the overall progress of your business.
A smart investor would be more than willing to help you tackle any unforeseen challenges your company is facing, but only if he/she understands your future business plans; this can be achieved through effective communication.
It’s not easy to achieve stellar financial results without proper communication.
2.Laser-Focused Analysis
Although you might be savvy about the technical aspects of your business model, you may not completely understand the various market dynamics that affect your business. IR consultants have a deep understanding of ever-changing market trends and the key drivers of any business environment.
They have the right teams, tools and expertise to collect relevant data and analyse the data for the benefit of your company. You don't have to waste valuable company resources to set up a team dedicated to researching and analyzing market trends. An experienced team of researchers from an established IR firm can get the job done much faster and efficiently, saving you a lot of money and time down the road.
The insightful market intelligence you’ll get from an IR consultancy can form the basis of making crucial investment decisions in your business. Furthermore, improved research will give you more leverage when engaging with existing and potential investors.
3. Investor Targeting
The way you engage with investors can easily carve out your path to success. IR consultants with years of experience on the market can help you craft winning pitches and guides on how to convince big investors to play ball. If you have been struggling with gaining access to legit angel investors, an investor relations consultancy can come in handy.
IR consultants can equip you with corporate fact sheets and profile governance that attracts the interest of credible investors. In addition, the consultancy can polish your public relations strategy and help you build a solid brand image that sells. The services of an IR consultancy will address your company's internal corporate culture and make critical changes that optimize the overall value of your business.
4. Improved Growth Trajectory
Private and publicly-traded companies face the same growth trajectory challenges. A company with a bad reputation may find it very challenging to grow as a profitable investment. Some of the major obstacles that affect growth in any business include public perception, branding, operational inefficiencies and slow expansion.
An investor consultant can also reduce your cost capital and assist in market evaluation to develop an approach that is ideally in line with your prospects.
5. Strategized Counsel
You need a superb term of service with all your investors. Remember, investors work with investor relations consultancies to streamline their ventures and avoid making substantial losses.
So, if you don’t work with the right consultants to get strategized counsel, you might not only fail in accessing the right investors but also make poor business choices. The consultancy can assess several investment portfolios of your investors and keep giving you updated advice on what steps to take.
When you allow an expert to support you in making sensitive financial decisions, you create enough room to dedicate your time toward running the company. The consultancy will give vital counsel on matters such as disclosure policy development, goal assessment and deal advisory.
It's essential for business owners or managers to communicate with shareholders and investors early and often. You could deliver your monthly or quarterly investor communications via snail mail or email. Through in-person meetings or conference calls and brainstorming sessions, you are better positioned to submit detailed financial reports on the progress of your company to shareholders periodically.
