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Communications: An Overlooked Aspect of Financial Prosperity

It has been abundantly clear start up CEO’s are commonly unprepared for communications with their investors. In addition, their mindset remains un-oriented with their investor networks and skills by regulatory communications. Startups must tackle this conundrum as this advancement of communications excels in parallel with that of technology. Lacking the tools to combat this issue reveals a serious opportunity cost for success. Furthermore, with a line of responsibilities thrown towards a startup CEO post investment, investors and VC’s regularly struggle stabilizing communication sufficiently with their funded startups. Neither side is to blame for this issue, but it portrays a wide gap that must be addressed.

Investors, by law, have the right to expect received information they request in a timely manner. However, CEO’s and founders of these startups typically lack the time to do so. In a survey conducted with a combination of VC partners and independent Angel investors, 97% reported that most of their companies continue to remain “out of compliance” with their information rights agreement. The same participants also noted not much can be done to enforce all the requirement from their rights agreement without impairing their relationship with their founders.

Of course, there are many solutions to this with the internet such as email and document storage sites. Yet, they fail to efficiently receive, consume, and store information essential to a portfolio company. The key is to develop and organize a single network that stores such information without forcing yourself to dig up this information through countless amounts of email and documents. Such a network is where an investor relations firm comes into play. Investor Relations Partners is
equipped with the right technological tools to handle and organize these communications. They conduct this in a monthly manner to provide historical
snapshots and placements for investors to look at the same structured information across the firm’s portfolio of investments. To give a better idea of how Investor Relations Partners approaches this, let’s examine both sides through investors and CEOs/founders.

As more people continue to use mobile devices to view and consume information, a platform for start-ups to update information through these devices become an effective tool for investors view this information consistently. The ability to categorize information on one singular platform.

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On October 23rd, 2015, posted in: blog by