For a budding CEO, managing investor anxieties around their company’s growth and outlook is of the most important roles they have.
As CEO, your day-to-day role includes managing your team and helping the business hit its goals, but you also need to manage up to your investors. When you manage up well, your investors can provide valuable insight, advice, and guidance to help you make the best decisions about the business.
Whether you report to a board, shareholders, or investors, the relationship you foster with them will help determine your business’s overall success. Building this relationship takes place even outside the boardroom at times and is on you to facilitate.
Exactly what information you share with investors will dictate how much anxiety they feel. Striking the right balance between total transparency and shielding investors when they feel anxious can feel tenuous for you.
3 Communication Strategies For Managing Investor Anxieties
On a high level, effectively managing investor anxieties, how well you communicate with them will significantly impact how strong the relationship is.
These three strategies will help you in managing investor anxieties:
- Set a time to regularly check-in
- Provide clear, consistent — and sometimes repetitive — messaging
- Effectively manage expectations will help your relationship with investors thrive and keep their anxieties at bay. Consider yourself a storyteller crafting a narrative about your company for investors to digest.
1. Set a time to regularly check-in
For every company, the communication or check-in schedule with investors will look differently. For larger companies, check-ins may take the form of quarterly board meetings. These check-ins could also be weekly phone calls with your first investor. Find a cadence that works for you and the investors.
Many of your own actions can dictate how much anxiety investors feel. Checking in sporadically can leave investors surprised when something significant goes off track and then leave them worried about the future. Checking in too frequently can mean you’re oversharing unnecessary information. Too much information can spark investors worrying about superfluous details. More importantly, it’s taking away your valuable time from driving the business forward.
Some investors will want — or even demand — more frequent check-ins on the phone or via text. Others want you to include them in more basic decision-making. They want to be in the know, but this rarely turns out to be helpful. Your first instinct might be to appease the investors at all costs, but it’s your job to set boundaries that work for you and the company.
2. Provide clear, consistent — and sometimes repetitive — messaging
Regardless of what your check-in schedule actually looks like, come prepared to these meetings with concise messaging and an agenda to drive the discussion. As CEO, your role is to drive the conversation with the investors and keep it structured.
Preparation will help you communicate the goals, priorities, and pain points you want to discuss. Even if you feel all the information is essential, your investors have a limited attention span, and the meeting running long will cause them to lose focus.
The plan you share should include a long-term forecast and recent wins. Repeat your long-term forecast during each regularly scheduled check-in to help each investor measure your company’s success against what you promised. Your overall preparation for these meetings will help build a deeper trust as the relationship evolves and set you apart.
During these meetings, don’t forget to ask for feedback from your investors. Asking for their opinion will inspire confidence in them. It also gives you the opportunity to hear any worries they have and anticipate how to soothe them moving forward.
When interacting with investors, as CEO, you want to deliver a consistent, clear message about your company’s goals, performance, strengths, and weaknesses. When crafting your message, ask for feedback from trusted employees or your leadership coach to ensure what you want to say is clear.
3. Effectively manage expectations
As CEO, you want to manage your investors’ expectations of your company’s performance on an ongoing basis. It would be best if you struck a balance between generating investor excitement about what’s to come but not overpromising and failing to deliver. Managing expectations of your company’s performance will help investors feel hopeful about the outcome but not fear the business will underperform. Remember, they will judge your performance based on what you say you’ll do and investors typically hate surprises. You can work with a leadership coach to curtail and manage the narrative around your company.
Most of these strategies focus on your verbal and written communication skills, but your nonverbal cues will affect how your investors perceive the information, as well. If you’re fidgeting, appear exhausted or stressed, and making unpleasant facial expressions, investors will start to worry about the state of the business, even if the words you’re saying communicate things are going well.
Building Transparent Relationships With Investors
Fostering a transparent relationship with your investors will help build ongoing trust and allow them to provide you with the best guidance possible. Ask your investors for their feedback, as their responses can help you better the company and meet their clear expectations.
“We decided to treat our large shareholders with total transparency, as best we could within regulations. We would meet with them,” former IBM CEO Sam Palmisano told Harvard Business Review. “We’d have a couple of them come in every quarter and talk with the entire senior management team.”
Building a strong relationship with investors also happens outside of the boardroom. Invite your investors to an event you planned for a more natural way to create transparent and trustworthy relationships with them. For example, if you’re hosting a Zoom happy hour with your team, invite an investor or two. This allows them to get to know your team members and recognize rising stars within the company. Another beneficial event for an investor to sit-in on could be a leadership training you offer. Allowing investors to watch your team build fundamental skills will help build confidence in your company without you mentioning numerical projections.
One of our best pieces of advice: Don’t overshare with investors. When running a company, issues ranging from personnel concerns, disagreements with landlords to technical problems will arise. Your issues managing your team are better told to a leadership coach than your investors.
Open and honest communication will help the CEO and investor relationship flourish, but sharing every issue will cause investors to worry too much. Striking that correct balance can feel tricky, but it’s a skill you can get better at and will learn through experience.
Sharing those concerns with your current investors will only worry them more when that’s your job to handle. These mundane problems exist in all businesses and do not signal something is wrong. Shield your investors from the day-to-day issues so they can focus on helping you with the big picture.
Oversharing also applies to when business is good. If you’re calling investors too frequently when things are going well but then stop communicating, they will start to worry a bad quarter is coming. Striking that balance is crucial. The regularly scheduled meetings will help you execute sharing the appropriate amount of information.
How To Manage Investor Anxieties
As an executive, you’re dealing with a lot, from managing investor anxieties, building out your company, and hiring a high-caliber team. Working with an executive coach will help you juggle all of these pressing matters.
For our own clients, we help CEOs manage up effectively when interacting with their investors or boards. Managing up is an essential CEO skill that takes time to hone. Executive coaching can help you hone in on your delivery and ability to manage up effectively. By working with an executive coach, you can become a more effective leader, focus on your goals, and improve your self-confidence. We can help you focus on the goals you promised to investors you’d hit. We can aid in crafting your ideal messaging to ease investors’ anxieties and hone how you’ll deliver that message to them.
As CEO, it’s your job to engage the board and help the investors help the business. The CEO can improve investors’ directions and advice by building relationships outside of the office with the investors, thoroughly planning meeting agendas and presentations, and filtering the information shared at the appropriate times. Investor anxiety is natural, as they also deeply care about the business’s outcome, but with strong communication and a solid plan, you can help minimize these worries.