Business investors, stock shareholders, investment banks, and even venture capital firms have taken a setback in the last few years. Due to the global pandemic, recession in the eurozone, and inflation in the USA, investors have suffered many losses.
Rahul Gandhi CPA looked at a list of the costliest and most significant startup failures and found that most firms had great potential.
So, where does that leave your business? The first step is to understand the plight of investors, starting with investment grief. Today, Rahul Gandhi CPA will explain businesses’ five stages of investment grief.
You have made multiple pitches and still need to receive funding. The potential investors you approached may be grieving their losses and looking for more reassurance than you can provide.
Rahul Gandhi CPA Breaks Down the Investment Grief Stages
Much like other griefs and losses, investment grief has a five-stage life. It usually lessens but how long it lasts depends on the particular individual.
This is a short-lived stage of grief when investors cannot accept what’s happened. As a business owner, you can expect the investors to fire questions at you and refuse to accept the situation.
Declaration of loss, bankruptcy, and closing of operations is highly tragic news and has reverberating effects on the entire market.
After the investors become or are made aware of the situation, they start thinking about the implications of the news of loss. This leads to anger and finding a party to blame, which mostly ends up being the business.
Before the cryptocurrency exchange FTX failed, it aimed for a rescue deal. When they see their investment drowning, many investors look for rescue deals and bargains.
Rahul Gandhi CPA recommends that businesses be transparent with investors about their financial status. If there are options, disclose them to the investors. This way, you can maintain goodwill and be hopeful for the future if you approach the investors again.
It’s the longest stage where investors mourn their losses. Businesses should acknowledge the loss to investors and take responsibility.
Acceptance – The Last Stage, as per Rahul Gandhi CPA
Many investors are hardened by experience and understand that loss is a part of their trade. And they get back into the market with renewed knowledge, experience, and ambition.
Silver Lining for Businesses – How Rahul Gandhi CPA Sees It
Eventually, investors come to terms with their grief and re-enter the market. They might have recovered financially and looking for the next big thing.
It’s important to know that investors in the current market will be more skeptical and hard to convince. To make sure your business is primed for receiving investment, read a few case studies regarding this year’s startup failures.
The market is expected to recover from the crises of the past few years. Your investors will scrutinize your business plan for missing pieces, so your business plan needs to be rock solid.
Rahul Gandhi CPA recommends businesses gain insights into the investor psyche and anticipate their reluctance to trust new ideas before investing. If your business was a collateral of the financial crises of the past years, build your next pitch keeping in mind how investors process investment grief.