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The Secret to Investor Relations - Purposeful Engagement

By: Ethan Austin

Kevin Willer, CEO of the Chicagoland Entrepreneurial Center (“CEC”) popped into the GiveForward office a little while back to chat and check out our fancy new digs in Bucktown.  Before he left, he asked us if we’d be willing to write a blog post about how the CEC has helped us grow as a company.  We’ve been huge fans of the Center’s work dating back to the Pre-Willer days (B.W.E.). So of course we said yes, and before Kevin even finished asking, I knew exactly what I was going to write about.

Every month at GiveForward we email out a progress report to our investors.  In these emails, we try our absolute best to sound smart and toss around various business-y sounding terms like “burn rates,” “margins” and “cost of customer acquisition”.  And while we make sure to address the obligatory metrics and financials, we tend to devote just as much time (if not more time) to discuss softer topics like the power of hugs and what that means to our business.

Now, I’ll be the first to admit, talking about the importance of hugs in a monthly investor newsletter is not the most orthodox style of investor relations.  But then again, we’re not the most orthodox of companies. What I can tell you, however, is that our newsletters are genuine, they suit our style and they seem to work for our investors.  In each email, we share our big wins, our small victories, our fears and our struggles.  Through this monthly communication, we try to give our investors a glimpse into our heads.  We want our investors to have a solid understanding of what is driving our thought process and our strategic vision for the company.  But perhaps more importantly, through these newsletters, we also give them a glimpse into our hearts.  We want our investors to know not just what we do as a company and how we plan to get there, but why we do it and why it matters to us.

While our investors tell us they really appreciate our monthly updates, to be perfectly honest, we don’t send them to make our investors happy.  We send them out for much more selfish reasons.  We write these newsletters because we benefit greatly when we purposefully engage our investors.  My Co-Founder Desiree and I are first-time entrepreneurs. We know there is a ton that we don’t know, and there is so much we can learn from mentors who have been in our shoes before. We have twelve incredibly smart investors backing us with an invaluable pool of knowledge and experience.  But we only get to tap into this pool when we open up to them, make ourselves vulnerable by admitting we don’t know everything,  and ask for their help.

So where the heck am I going with this, right?  How does any of this relate back to the CEC?  Well, it all goes back to a Behind the Business session the CEC organized where Matt Maloney, Co-Founder of GrubHub, came in to share his story on how he and Mike Evans built their company.  Matt told the audience about how he used to hold board meetings once a month just so he could learn from his board members. He purposefully engaged them — in turn, they taught him and Mike how to run a successful company.  When I heard Matt’s words that day, they completely resonated with me and I remember thinking to myself, “alright, we should do the same at GiveForward.”

These Behind the Business sessions are why I love the CEC.  By bringing in successful entrepreneurs to share their stories, the CEC is doing the exact same thing for the Chicago community that Desiree and I do for ourselves at GiveForward.  They’re purposefully engaging successful entrepreneurs to share their wisdom with the new batch of Chicago’s emerging leaders.  I’ve been to a bunch of these sessions and whether it was Matt Moog, Brad Keywell, or Matt Maloney speaking, I’ve never gone to a Behind the Business session where I didn’t pick up some piece of advice and then apply it back at GiveForward.

To be sure, I could have gleaned much of this same advice by reading a startup blog or a book, but I’ll be honest with you, it’s not the same.  It’s not even close. When you hear someone speak in person, their advice is tangible. It feels real and you’re ten times more likely to take action on it.  And that’s why these sessions at the CEC are so valuable.

Of course, this blog post is the one exception to my rule that advice is more valuable in person .  So, if you’re an entrepreneur just starting out, I encourage you to go to as many talks and presentations as possible and learn from people who have done this before.  If you’re an entrepreneur with investors, I strongly encourage you to engage them.  Investor relations should not be about mollifying your investors and keeping them off your back.  It should be about opening up a dialogue with them and learning as much as possible from them.  If you do this, I can promise you that the value you’ll gain from their mentorship will far exceed the value of their capital.

Ethan Austin is the Co-Founder of GiveForward, a crowdfunding platform that allows people to raise money online for their loved one’s out-of-pocket medical expenses.

Accel Partners, the Silicon Valley venture fund that has backed Groupon, Facebook, Wonga, and Yapstone, recently invested $34 million in Braintree Payments, a Chicago-based online payment startup that automates credit-card and other processing for e-commerce companies.

“[Braintree] caught our attention when we realized the vast majority of our portfolio companies were turning to them for payments,” said Ryan Sweeney, an Accel partner who will be joining Braintree’s board, in a recent press release. “The more we learned about them as a company, the more excited we became. Like Braintree, we believe that a fundamental transformation is underway in payments. Further, we’re backing a team that has accomplished a tremendous amount with very few resources – these guys are just getting started and we are thrilled to be partnering with them going forward.”

The $34 million investment represents the first round of outside funding for Braintree, which currently employs 32 people in Chicago and is looking to expand its staff.

Founded in 2007 by Bryan Johnson, an award-winning MBA graduate of University of Chicago’s Booth School of Business who received $25,000 in business-plan-competition prize money to start the company, Braintree currently caters to clients as big as OpenTable, Inc., and is set to handle as much as $3 billion in annual payments, with about $10 million in revenue expected this year.

“As we’ve grown larger as a payments company, we needed a stronger balance sheet, which allows us to process bigger volumes,” Johnson said.

As a distinct value, Braintree focuses on simplifying payment processes for clients, providing a flexible payments platform where clients can both streamline and tailor the process to their specific needs. With this new funding, Braintree plans to hire additional engineers in order to expand the company’s sales and marketing efforts.

For more information about Braintree, visit BraintreePayments.com.

Jory Des Jardins of Blogher, Craig Newmark of Craigslist, and Penelope Trunk of Brazen Careerist have been added to the TechWeek speaker list! These three amazing speakers have contributed a wealth of knowledge and innnovative products and services to the world. Hear what they have to say on the subjects of entrepreneurship, finance, blogging, life and much more.

The TechWeek Conference & Expo is July 22-25 at the Merchandise Mart in Chicago. Register for your TechWeek Conference & Expo Pass today and save 25% off the walkup rate!

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The anticipated launch of EduLender‘s OnePay, a new tool made to consolidate existing federal student loans and possibly save consumers money, is now official: currently in public beta, OnePay takes less than a minute to provide a free assessment online. Mentioned here at midVentures a few months ago, the service was launched by EduLender, a student loan comparison search engine that was in the 2010 class at Excelerate Labs and part of mVLAUNCH last year.

According to EduLender, OnePay is a resource that helps users to “combine your federal student loans under one servicer with lower monthly payments than before. OnePay helps you understand your individual loan portfolio so you can make the decision that’s best for you.”

“Consolidating student loan debt isn’t exactly an intuitive process,” founder of EduLender, Suyeon Khim, told midVentures. “For example, there are multiple repayment plans available to people who are looking to consolidate their loans, but it takes quite a bit of work to figure out which repayment plans you’re eligible for and what your monthly payments would be under each of them. This process that can take hours of wrestling to really understand and get right takes seconds with OnePay.”

The OnePay process is simple: through the online assessment, users provide basic info about themselves and their loans. OnePay then shows a summary of those loans, along with how different repayment options would look over time. It’s then possible to consolidate the loans right there or, users may do it themselves through a government website.

“The interface gives you a clear view of your loans, walks you through the application step-by-step (including running all of those repayment calculations for you), and checks your application for errors before you e-file,” Khim added. “OnePay helps you plan your financial roadmap minus the agony.”

For more information on OnePay and to try out the beta version, visit edulender.com/consolidation.

Podio, a new productivity app, is coming to Chicago this week as part of The Podio World Tour, a journey that’s taking its founders across the globe in an effort to connect with new people, build apps with them, and expand an overall understanding of the way people work. Having just finished the kickoff of the tour with a few days in New York City, the tour is heading to Chicago this week—June 8 and 9.

“I’ve heard great things about Chicago, so I look forward to meet and discuss the Future of Work with the local thinkers and movers,” Kasper Hulthin, co-founder of Podio, told midVentures. “We build a platform for the companies of tomorrow, and I hope to find some of those in Chicago.”

“Thousands of U.S. companies have already changed the way they work,” he added. “We hope to meet some of them in Chicago, Boston, L.A. and San Francisco.”

During the company’s two days in the Windy City, it will host two different events: App Camp on Wednesday, June 8, and The Future of Work Panel on Thursday, June 9.

App Camp aims to show how anyone can build apps for projects, recruitment, CRM, or personal workflow through Podio. Experienced users are welcome to come out and connect with the founders, as well.

On Thursday, June 9, the Future of Work Panel will feature a panel of speakers addressing the theme of “The Changing Workplace”—what the future holds for companies as they move from using social media for external communication to using these tools for internal operations.

“The last few weeks, the Podio World Tour has taken this show on the road to visit and learn from local users,” Hulthin said. “In the U.S., we’re hosting a series of conversations on ‘the Future of Work’ with local thinkers to learn more about how we work, today.”

The panel will include host Stowe Boyd, writer and pioneer within social tools; David Armano, from Global Innovation & Integration at Edelman Digital as well as a frequent contributor to the Harvard Business Review; and Amber Naslund, VP of Social Strategy of Radian6 and author of The Now Revolution.

As far as what’s in store for Podio in the future, Hulthin pointed out the recognition the startup has received recently: “This week, Entrepreneur Magazine included Podio on the list of 100 Brilliant Companies,” he said. “In two weeks, we’re part of the LaunchPad finalists at the Enterprise 2.0 Conference in Boston.”

To learn more about Podio World Tour: Chicago, visit company.podio.com/worldtour-chicago. To sign up for the Future of Work event, go to future-of-work-chicago-eventbrite.com.