Communicating with investors often comes way down the list of priorities for private companies – regulatory obligations are much lighter and less prescriptive than for listed companies, and it can seem peripheral to the passion and pace of building a great business.

But, effective communication with investors is crucial for building trust, fostering engagement, and securing support for your company’s growth. Ignoring this aspect can result in missed opportunities and potential damage to your reputation.

Of course, you need to familiarise yourself with your obligations – especially any time there is a change. And although your obligations will differ, you can review those for ASX listed companies and borrow where suitable – ensuring both best practices and readiness for a future IPO.

Here are four golden rules to help:

1. Looks aren’t everything… but they do matter

Many early-stage companies don’t have an email management or CRM tool, unless they are a retail business, and likely don’t see the need to use one for a handful of investors.

However, the practical fall out of this can be mass emails, with investors on ‘bcc’ – this raises unnecessary privacy risks in the case of human error, and can look shonky both in terms of design and security.

Your investor communications should be just as polished and professional in the digital sphere as they would be in person. You can leverage shareholder communications tools, like those integrated directly in the FCX platform, to message your shareholder base in a smooth and secure way. FCX allows you to email broadcasts to everyone on your register and any additional lists as needed as well as attaching document stored securely, and to review the analytics for engagement.

2. Predictable is best

Shareholders don’t like surprises – they like to be informed, in a clear, consistent and timely manner. It is important to update them regularly; ideally quarterly, bi-annually at a minimum (as well as any obligations specified in your shareholder/subscription agreement or constitution). Whatever frequency you choose, you should stick to. Once investors expect the update, it is doubly important to maintain the rhythm.

Investors into your private company don’t have the same benefit of continuous disclosure as with listed assets, but they will likely compare their investment to ASX shares, so quarterly updates and communications above and beyond those required by the Corporations Act can be a strong tool for investor relations.

This can be as simple as a one-to-two-page shareholder letter, providing them with clear, concise updates on what’s been happening in the business, its achievements, how it’s tracking against business goals, and any relevant audit or financial reports.

3. Don’t play hard to get

Much of your existing communications with investors are likely inbound queries: “where can I find last quarter’s report?”, “where is this document I need?”, “can you resupply me with my shareholder certificate” or “information for my tax return”. It will save you time and give investors and their intermediaries (accountants, advisers) piece of mind and a far better experience if they can access these documents and information at any time from a single, secure source as on the FCX platform.

Equally, communicate important information to investors before they go looking for it. For example, if Christmas is your major season, don’t wait too long into January to update investors on results. Or if you have been in the papers or have news such as a deal, award win., major order, expansion into new markets, a takeover, acquisition … it’s best they hear it from you, so you control the messaging good or bad. Like a polished look, and a consistent rhythm, this builds trust and reassurance in your investors that you ae in control and transparent about the state of the business.

The caveat to this is in-progress deals or sensitive information. One of the many benefits of being unlisted is dealings such as incomplete transactions are confidential, and don’t need to be disclosed – even if shareholders ask. However, as soon as the information leaks you will have to respond or make an announcement, so keeping the circle of those in-the-know as small as possible is best.

4. Turn obligation into opportunity

Shareholder communications may seem like an additional task on busy team’s already overflowing desk. But keeping investors reassured, engaged and impressed isn’t just a chore, it’s an opportunity. Not only to avoid more work repairing any loss of faith down the line, but also to keep your most qualified leads for your next transaction primed for follow on investment.

While shareholders may not seem central to your vision, cashflow – and a low administrative burden – is. We often see happy investors fall away as other things become a focus – only to begin to lose trust, and require more work.

Implement shareholder best practices now for a strong ongoing foundation – and utilise tools like FCX to automate much of the work and easily enable the rest in a secure, professional way.