Caitlin MacGregor, CEO and Co-Founder of Angel One Investee Company, Plum.io, on Turning your Investors into Champions
Plum’s Founder and CEO highlights the importance of investor reporting. This article first appeared in a blog by Hockeystick.
My name is Caitlin MacGregor, and I am the CEO and Co-Founder of Plum.io — a Kitchener-based company that helps organizations create high performing teams and businesses by matching them to the right job applicants.
More specifically, Plum allows employers to identify the best candidate match by using cutting-edge behavioural science and generating competency models for open positions.
My team and I developed this technology because 89% of failed hires are due to attitude, not skill.
Three Benefits of Investor Updates
I believe that all venture-backed businesses have a responsibility to be transparent with their investors and that consistent communication has a number of advantages. Here’s three.
1. Informed investors
Providing investors with financial updates keeps them in the loop. Plus, informed investors are generally happier and more valuable to entrepreneurs. They are more likely to identify weaknesses and offer advice that’s backed by expert knowledge of the company.
If you’re out raising another round, chances are your current investors are the ones that can make new introductions. They will be more willing to share their Rolodexes or open their wallets again if they hear from you more than once every 12-18 months.
If you’re not raising, you might think you don’t need to track and report company data. Big mistake. Financial reports are still vital as they enable you to plan and budget.
By comparing reports, you’ll know if your business is consistently falling short or surpassing expectations. If your reports indicate that you’re falling behind, then you’ll need to make some changes by raising prices, cutting costs or rethinking your business model. Conversely, if your income is steadily growing month-to-month, then you may need to hire new employees, expand your facility or seek financing sooner than you expected.
The simple truth is that you don’t need an MBA or an in-depth understanding of double-entry accounting to know that tracking and reporting your company’s financial metrics is important.