You’ve secured funding… now what? Annika Small gives us the inside track on how you can get the most out of your investor

Securing investment often represents a real milestone in the development of your project. You’ve successfully conveyed your vision to an organisation which has bought into it sufficiently to offer you support.

However, the excitement of securing the investment can often quickly give way to misgivings about how the relationship will work, and anxieties about what you should and shouldn’t share with your new ‘partner’.

The most important thing to remember is that word, ‘partner’. The right investor should not just be writing you cheques, but working with you to scale up your ideas and ensure they are a success.

When you consider that only a small percentage of projects that apply for funding actually receive it, it should be clear that your investor’s financial commitment reflects the fact that they believe in you and want you to succeed. They will also, of course, be looking to get the maximum social value out of their investment and will be looking to foster a relationship that works positively for both of you.

As an investor, we have the inside track on how to maximise the impact of your hard-won funding. There are a number of practical steps you can take to ensure a successful working relationship, including how to manage your investor, and what to do if the strategic direction of your project changes or if the project encounters difficulties.

  Mutual benefits

• Make the most of your investor’s resources

It’s likely that your investor will have access to a broad range of resources and contacts, many of which could be useful to you – not least individuals and organisations that are in the same position as you. It’s critical that you capitalise on any opportunities to engage in your investor’s extended network.

At Nominet Trust we run regular networking sessions, giving the organisations behind the projects we fund the chance to exchange ideas, share experiences and identify areas for potential collaboration. Our investees tell us that these events provide real opportunities, allowing them to form invaluable new contacts who can help them with their business.

If your investor does not offer this type of event, be bold – research who else they are working with and ask for introductions. This will show your investor how keen you are and, ultimately, it’s also in their interest to ensure you’re well networked and raising your profile.

• Provide regular updates

Don’t wait to be asked for progress reports. Instead, make sure you are proactive and provide your investor with regular updates about your current activity and your future plans. You shouldn’t just see these as opportunities to tell your investor how well it’s all going – if there are budget changes or if milestones slip, it’s important to be transparent. By providing this information, you’ll be demonstrating to your investor that you are in control of your project.

What’s more, regular monitoring and evaluation isn’t just important for investors; done well, it will also help you. If you make it part of your project management discipline there will be internal as well as external benefits, particularly as you will be able to identify potential problems before they arise.

To get it right from the start, it’s important to agree a reporting mechanism with your investor upfront. Many investors will have a monitoring process that you will need to follow, but you should discuss this with them at the outset. If you are already producing reports for other funders, it may be that they will satisfy multiple needs, meaning you may only need to tailor the formal report for each investor with a relatively light touch. While we do need certain information from our investees in order to monitor progress, we aim not to over-burden partners with reporting requirements.

That said, try to provide as much information as possible. Send through a variety of updates including photos, videos and collateral. All of this will go a long way in building the confidence of your investor. Remember that they have a big stake in your project, and they can only know how it is going if you tell them. Investors also have a responsibility to account for the investments they make, and they are more likely to draw on projects they have a good relationship with, and where the information is up to date.

• Play the PR game

Just as you are keen to build your organisation’s profile and gain recognition in the media, your investor will be too. Don’t forget to mention your investor’s role in tweets, blogs and press activity. After all, without your investor, the project wouldn’t be happening. Investors can also help add to the story by giving a wider perspective.

Find out if your investor has a PR team or agency and ask to be introduced – they may well start doing some of your communications for you. Investors will also be more likely to share this type of collateral via their own networks, gaining more exposure and recognition for your activity.

You should also make the most of social networks. Make sure that you are connected with your investor via Twitter, blogs and newsletters, demonstrating a strong working relationship.

• Have a risk management plan

Our experience has taught us that most projects change as they progress. You may not be able to predict exactly what will happen, but you can have a good idea of the risks and issues you will face. Make sure that you have a risk management plan in place, which you have shared with your investor. It doesn’t need to be lengthy, but it should identify potential threats to the project and a clear plan of action to mitigate any negative impact.

As we’ve already highlighted, don’t be afraid to share problems. Make sure you let your investor know if things are not going to plan. They should understand that you are going through a learning process. However, try not to just report problems; come up with potential solutions and ask for feedback. This will show that you are working to fix the issue.

If you share problems, you’ll also be able to draw on the wealth of experience and knowledge that your investor has built up. It is likely that they will have encountered similar issues before and can work with you to address them. Both funders and investees have a stake in the project and should work together to deal with problems; it is in neither’s interest that the project fails. Funders need to move away from a ‘them’ and ‘us’ position when it comes to investees, but equally this only works if investees are open in sharing problems, as well as successes.

Communication is the key to success. If you want to alter the strategic direction of the project, or even the source of match funding, then discuss this with your investor. If there are good reasons for the change, such as initial research has revealed that a different direction would be more beneficial, and you can demonstrate improved likely outcomes, then you should find investors will be open to change.

There will come a time when the funding from your investor will come to an end. The better your relationship, the more likely your investor will be willing to help you broker and secure scale partners for the future. If you follow the steps we’ve outlined, you’ll help to ensure that your relationship with your investor is a good one for you both, in the short and the long term.

4 important habits for working with funders

1. Never forget your investor is on your side. Trust them and share positive and negative news as well as solutions to problems and you will benefit from a mutually productive relationship.

2. Keep your investor updated, providing as much detail about your project as possible, and remember to make the most of your investor’s resources –particularly their contacts. Agree the monitoring and reporting schedule with your investor as early as possible and, for your own sake as well as theirs, conduct thorough monitoring and evaluation.

3. Always credit your funder in external communications, such as media activity, and link to their social networks. They will appreciate the recognition and, critically for you, reciprocate.

4. Funders and investees should be partners, not opponents, so draw on their expertise, and involve them in the life of the project. That way, when the (funded) journey comes to an end, they will still want to help you succeed.

Annika Small is CEO of Nominet Trust

This article first appeared in The Fundraiser magazine, Issue 16, April 2012