Navigating Investor Feedback: A Guide to Constructive Responses

Matt Preuss
Marketing Manager

There are not many people who have been in the role of a startup founder. For many startup founders, this means taking on new roles and responsibilities that they might not have experienced before.

When facing these challenges, it helps to have someone guide you along the way — this can be an investor, peer, mentor, or someone else with experience. Soliciting feedback from the investors around you is a great way to tap into their network and experience to keep moving forward. Investors typically have had experience as operators themselves or the other founders in their portfolio.

Understanding the Value of Investor Feedback

As Seth Godin wrote in Beware of Experience Asymmetry, “There are things you’re going to do just once… In these situations, the institutions and professionals you’re dealing with have significantly more experience than you do…In these asymmetric situations, it’s unlikely that you’re going to outsmart the experienced folks who have seen it all before. It’s unlikely that you’ll outlast them either.

When you have to walk into one of these events, it pays to hire a local guide. Someone who knows as much as the other folks do, but who works for you instead.

Many of the roles you face as a founder can fall into this bucket — raising capital, going through a merger or acquisition, going through legal counsel, etc. When facing these new roles and challenges, it often helps to find someone around you who does have experience.

If you have investors, this can typically be a great place to start. Many investors have experience as operators but if they don’t, they typically have a large network of founders and other investors. This means that they’ve likely seen the challenges you’re facing, directly or not, before.


Why Does Investor Feedback Matter?

As we mentioned above, investors typically have experiences and a network that will lend useful feedback when it comes to fundraising, hiring, company strategy, etc.

Related Resource: How to Build Trust Through Investor Feedback

Investor feedback can be particularly important when it comes to raising venture capital. At the end of the day, you are pitching investors so welcoming feedback can be a great way to tweak your pitch for future investors.

However, just because an investor offers feedback does not mean it is right for your business. Remember that you know more about your business than any investor so be critical about what feedback you put to use.

Core Principles for Constructive Responses

As we mentioned above, not all feedback will be relevant to your business. However, welcoming a conversation and hearing out their point is a great way to strengthen your investor relationships. Check out a few key principles for constructive responses to investor feedback below:

Active listening

If you are going to solicit feedback from an investor it is important to be respectful and actively listen. This includes hearing out what they have to say, even if you do not agree, and asking follow-up questions as you see fit.

Reflecting and analyzing

Just because an investor offers feedback does not mean you need to take it. At the end of the day, you know your business the best. It is important to reflect and analyze the feedback you receive.

Seeking clarification

Instead of assuming feedback means one thing it is important to seek clarification if there is any confusion. This will not only help you get to the bottom of their suggestion but will demonstrate to them that you are taking their feedback and time seriously.

Collaborative problem solving

If you are seeking feedback from an investor it should be someone you trust and value. By them offering feedback it is an open door to further the conversation and collaborate on the problem you are solving. This can not only lead to a better outcome but a strengthened relationship for future conversations.

5 Strategic Ways to Collect Investor Feedback

Write a transition paragraph that introduces the next section. Feel free to add/remove/adjust the below techniques for gathering feedback

1. One-on-one meetings

One-on-one meetings are likely reserved for investors with whom you have existing relationships. This means that they likely have some familiarity with your business and will be able to offer sound feedback.

Advantages

  • No bias from other investors or people in a meeting.
  • Make specific asks based on their own skillset/experience.
  • More personal and genuine feedback.

Related Resource: The Complete Guide to Investor Reporting and Updates

2. Pitching and Events

Pitching inventors or attending events can be a great way to get feedback from investors who are outside of your network. While they might be new to your business they can offer valuable feedback on how outsiders view your business and your pitch. This will allow you to tweak and improve your communication for future pitches.

Advantages

  • Receive feedback based on your pitch and presentation.
  • Pitch feedback will help you improve your pitch for future meetings.
  • Investors you are pitching are likely new to you and can offer a new perspective.

3. Investor Updates

Regular investor updates are a great way to get into a rhythm of regularly asking your network of investors for feedback. This will not only allow you to solicit feedback but will help you strengthen relationships and become top of mind with your current and friendly investors.

Advantages

  • You can be targeted in asking for what areas you are asking for feedback.
  • Anyone receiving your investor updates is likely invested in the success of your business and will offer honest feedback.
  • You can stay top of mind with investors by asking for honest feedback.

Related Resource: How To Write the Perfect Investor Update (Tips and Templates)

4. Board Meetings

Board meetings are an important tool for startup founders. This is your chance to dig into several problems your business is facing and dig into them with your most trusted partners. Board members should know your business well and should offer pointed feedback that is worth hearing out.

Advantages

  • Board members are the most invested in the success of your business and will offer feedback that is best for the business.
  • Board members know your business well and can offer feedback on factors specific to your business.
  • You can set the agenda and lead the conversation and areas you need feedback at a board meeting.

5. Email & Phone Communication

Email or phone communication is a great way to get real-time feedback and suggestions. This is typically less formal and allows investors to share honest and raw feedback that will lead to further conversation and collaboration.

Advantages

  • Someone you are willing to email/call is likely someone you trust/have a good relationship with.
  • You can receive honest and real-time feedback when working with someone directly.
  • This leads to easier conversation and digging deeper into the problem you are facing.

Find Out How Visible Can Help You Connect With the Right Investors

Visible is your hub to improve investor relationships. From sending investor updates to sharing a pitch deck to monitoring ongoing investor conversations — we’ve got you covered. Get started with Visible and give it a free try for 14 days here.

You may also enjoy:
Product Updates
Shaping the Future: Unveiling Our Brand Refresh
Visible started as a way for founders to update their investors but has since transformed into a purpose-built platform for both founders and investors. Since 2014, we’ve powered over 3M interactions between founders and investors. Our brand refresh represents our commitment to equip founders and the investors who back them. Founders can now manage their investor relationships and capital raises from start to finish. Investors can centralize data, uncover insights, and report to their LPs and stakeholders—all from one place. We are excited to unveil our refreshed brand, marking the beginning of the next decade in our dedication and commitment to founders and investors. Equipping Founders and Investors for Growth Raising capital is fundamentally about building relationships. Founders and investors spend months forging connections that, once solidified by a term sheet, can evolve into partnerships lasting 8 to 10 years and beyond. We set out to highlight the people behind the investments, not just the companies or firms they represent. As we continue to grow, you'll notice more familiar faces from different startups and venture funds featured on our site (👋 Hi Lacey!). Shaping Our Future Across our website and marketing assets, you’ll see 3D shapes floating in the background. While they add aesthetic appeal, they also carry a deeper meaning. For example: We believe raising capital from VCs or LPs closely resembles a fundraising funnel, a concept brought to life through the funnel shape that appears across various pages and assets. Sphere, torus, and pill shapes symbolize the connections between VCs, founders, and stakeholders, reflecting the interwoven nature of these relationships. These forms also symbolize forward momentum and the continuous progression within the venture ecosystem. As our product has evolved to offer greater flexibility in moving data into and out of Visible, you'll notice pipes integrated into the design, visually representing the seamless flow of data through our platform. Logo and Wordmark To maintain and perpetuate our brand equity, we opted to anchor our brand to our current logo and wordmark. The Visible logomark is made from three overlapping, equilateral triangles. Each triangle is slightly transparent, allowing the mark to interact with other design elements. These triangles represent human relationships and the connection between founders and investors, which is core to our mission and vision for our company. Color Palette Our signature black primary color remains, but we've refined our palette for a fresh look. We've transitioned from a complex, rich color scheme to a more cohesive and defined palette, creating a unified and bold approach to color across our brand. Introducing the new Visible color palette: Product Guided by our core values of trust and transparency, we designed our product to embody these principles. Our product visuals across the site are predominantly high-fidelity for the first time, highlighting its capabilities visually rather than relying solely on words. The updated typography and refined color palette are seamlessly integrated into our product screens, further enhancing the overall brand experience. Voice & Tone A brand is more than just its visual identity; it requires a voice and tone that harmonizes with its design. We aimed for our voice to be authentic, credible, and consistent, supporting both investors and founders alike. This commitment led us to define key principles for our voice and tone: Be a guide Less is more Recognize that different users face different challenges As you explore our marketing site, we hope Visible reflects these values and resonates with you. Transparency = Trust As we noted earlier, raising capital is fundamentally about relationships. Trust and transparency form the foundation of any strong connection. Throughout our website, you'll notice subtle transparency elements that embody this core principle. This new iteration of our brand is built to scale, but that doesn’t mean we won’t continue to evolve and elevate the experience for the betterment of our prospects and customers. Here's to shaping the next 10 years! Up and to the right,  The Visible Team
Product Updates
Product Update: Turn Emails Into Insights With Visible AI Inbox
Customer Stories
Case Study: Airtree Venture's Transformation with Visible
Fundraising
9 Tips for Effective Investor Networking