Wednesday, February 22, 2012

How To Look After Your Investors

This is a story of two companies. Both of whom I have invested in, during 2011. Both are in the social media space.

Company A. Fantastic idea. Team already in place and well funded. 
Company B. Cool idea. Small team and seed funding required.

After investment both invited me to meetings. Now if you read my previous posts I in no way push myself as some sort of guru that I know some start up techies do. I like to give my view and hope it helps in some way.

Company A. Completely ignore anything I say, to the point of being so dismissive its actually quite rude (yawning when I talk)
Company B. Completely engaged in our conversations whether any useful advice is there.

Company A. After a month or so I am no longer invited to any strategy meetings and get no update for many many months. Not even an email. In fact getting any stats out of them is very difficult.
Company B. We setup monthly very informal meets that give me a complete run down on the sites progress. I am given access to analytic stats.

Company A. One year later - spent a fortune on dev and marketing. Got no traction and suddenly running out of money. I am not going to invest more.
Company B. Massive traction, huge interest and I am looking at investing in the next phase.

Now the results of both companies has nothing to do with me but Company A leaves such a bad taste and Company B leaves such a warm glowing feeling that I wonder whether there is something in the way the Companies are run that has resulted in their success/failure.

Of course I don't want to see either fail but I know which one has a good chance and which one doesn't.

NOTE : if any of the above happens to fit your company that I invested in then it is merely coincidental.

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