3 Great Ways to Build Investor Relationships

I’m going to take a little ‘time out’ today.

What I want to focus on is: taking care of private investors once you have them.

It’s very important that you do this the right way. In fact, it’s almost just as important what you do after a person places funds with you then what you do before.

Here’s why: your single biggest source of additional capital as you grow your business will be…your existing private investors. In fact, if you do it the right way, after you have 5 or 6 private investors (and it usually doesn’t matter how much they have invested) you should not have to spend much money or time with outside marketing for private money.

You should be able to raise as much private money as you need from referrals, testimonials and additional capital invested from your existing investor base.

Of course, you may have to go outside again with your marketing if you want to raise $5MM or $10MM blocks of capital, but for real estate investors that want to make a few hundred grand per year flipping properties or with cash flow – a solid investor base to start and then working off that base will pay huge dividends.

With that in mind, here are three great ways to build your relationship with a private investor after they place funds with you:

1. Regular correspondence – at a bear minimum, you should send your private investors a quarterly statement which details for them how the investment in your company is performing. Show the investment amount, interest accrued or paid to date, year-over-year return on investment. Make this statement look and feel professional. Always include a personal note with the statement that re-affirms the investor’s decision to place funds with you. You can also use the statement to plant the seed for referrals.

2. Gifts – pretty much a no-brainer that you should send: birthday, Christmas and anniversary gifts to your private investors. Spending maybe a few hundred extra bucks per year is well worth the good will and special feeling that this will create in your private investors. Remember: you don’t want people to just “think favorably” about you – you want stark raving lunatic fans that scream about you to everyone at the top of their lungs. Imagine this: you’re private investor is having a party at their house. A guest notices a nice bouquet of flowers or thoughtful gift that you sent them and asks about it. Your investor is quick to pipe up that they got it from their real estate investment company. They go on to tell their guest that they get treated like gold and they get great, hassle free returns on their money. Think of the difference that could make…

3. Outings – In terms of relationship building, nothing is more important than some good face time. Several times per year, perhaps 3 or 4 times per year, you should spend an evening or a good part of a day with your private investor and/or their spouse. Take them to a sporting event. Invite them to a long lunch. Take them out to a fancy dinner. Face time is very important. You don’t have to talk about business the entire time. In fact, it’s almost better if you don’t. Let them see that you’re a complete person and they’ll fall more in love with you. People feel good about investing and doing business with people they like and trust. Why not go as far as you can go toward building trust at rapport?

These are only three ways – there are many others – that you can use to build relationships with private investors. Be creative and original. Sending movie theater or restaurant gift certificates is good, but a personal touch and learning what people like will help you stand out more.

You should always strive to build better and better rapport. This will have them sending referrals to you without even asking and, thus, speed up your private money raising.

Leave a Reply

Additional Articles From "Investing"