How to be your VC’s favorite portfolio company

Typically, when VCs invest in a young company, they get equity and a board seat. The startups get money and a new board member. But good portfolio companies should get more, because VCs have a lot more to give – especially to companies that deserve it. VCs are well connected and have a lot of visibility into other startups and how they operate, and as a result, should have introductions to make and advice to give. But investors have dozens of portfolio companies and likely aren’t going out on a limb for founders.

Quite often, investors are investing in people, not products or ideas. Paul Graham wrote an essay on how startups can convince a VC to invest, and many of the points revolve around the strengths and characteristics of the founder, such as being formidable and being truthful. Most likely, if you received an investment, that angel or VC partner believes in you, or at least aspects of your personality and experiences.

That being said, you should not rest on your laurels once you lock up funding from investors. It’s up to you to nurture and build upon that initial investment they made in you to gain more trust and ultimately get more from the investor than that initial capital. It’s not rocket science, but more attention should be paid to relationship-building in order to be a good portfolio company.

Paul Graham describes being formidable as “one who seems like they’ll get what they want, regardless of whatever obstacles are in the way. Formidable is close to confident, except that someone could be confident and mistaken. Formidable is roughly justifiably confident.”

Confidence can mean a lot of things to different people, and should be rooted in other key characteristics:

• Authentic – Investors want to work with founders that are truthful and upfront about all aspects of their business. With an emphasis on data and facts, you will immediately gain the trust and respect of investors. They don’t want to be sold to, especially if it’s not the truth, and much rather prefer to work honestly with you to find success.
• Convincing – Founders that use confidence and charisma in tandem to present their case will leave a lasting impression.
• Driven – This goes without saying, but investors will want to feel your ambition, passion and commitment to the business and ultimately, their investment. Actions speak louder than words here. Do the right activities day in and day out and good investors will take notice.
• Receptive – Confidence is great, but being humble and open to feedback is also important. Building a business is hard, and constructive criticism can be incredibly valuable at all stages of growth.

Investors want to work with good people who understand how business works and respect the nature and balance of business interactions. In essence, understand and listen to social and business cues to know how and when to ask for help.

Get access to resources you need

The biggest step you can take to get access to the right resources from your VC is doing research on what they actually have access to. Make educated requests by knowing who and what they know based on past portfolio companies, experiences they’ve had on the board of companies similar to you, etc. Knowing your investor inside and out, and referencing their experiences, is highly recommended and will be impressive to them, as well as it shows you respect them and took the time to educate yourself on how they can help.

Understand when to pull in your investor for help

You are the founder of a business because you have the smarts and hopefully the hustle to get access to the resources and people that you need. Your investor isn’t there to hold your hand. In fact, they don’t have to do much of anything once the money is the bank, but they just might want to if you make smart decisions and ask for help when you truly need it. If your request for advice or an introduction could make a considerable impact on your business, this translates to a bigger return for the investor.

There are a lot of untraditional ways that investors could help you – office space, hiring, etc., but you don’t want to be the portfolio company that is always asking for something. Map out what you really need help with – especially from a budget perspective – and pick and choose your asks. While acknowledging how sensitive their time is, make sure you present your case for why you need their help and how it directly correlates to success for the business.

Share it all

Inexperienced founders will share only good results, despite what’s going on behind closed doors. Practiced and helpful investors will want to work with you through the bad times, too – and definitely don’t want to be surprised when things get “bad enough” to share.

Get on a regular pattern of meeting or updating your investor – whether it’s in-person meetings, emails, or both. Determine your KPIs and reporting mechanisms and get into a routine of updating them in a way that is helpful for them to digest. Doing so will create an environment of trust and naturally build your profile with them as other portfolio companies shy away from involving them or updating them on down months.

After you share, be flexible

Your investors will share feedback and present solutions to the problems you’re facing. Be humble and adaptable if things aren’t following your original plan. Investors will love to see you hit your own milestones, but if they are no longer mapping to your ultimate goals, they will also want to see that you’re able and willing to shift gears when needed.

For first time (and repeat) founders, running a company is daunting enough. Dealing with big time investors can add to the stress if you don’t know what to expect from them or what’s expected of you. However, investors can help relieve the stress if you know how to interact with them.

Being a model portfolio company will make your investor’s life easier and ultimately your life better when you are able to reap the benefits of their experiences, connections and knowledge. If you aren’t nurturing this relationship currently, start now to get ahead.

Read next: The pros and cons of investing in emerging startup ecosystems