Keeping investors updated on the progress of your business is one of the best things a Founder can do in managing investors and keeping them onside.
As Steve Baxter says, you don't want to treat investors like ATM machines - and only go and talk to them when you want cash.
Consistent and Frequent Investors updates are also helpful to your business. We have seen with our portfolio that there is a strong correlation between consistent monthly founder updates and their investors following on in successive fundraising rounds. By keeping investors in the loop and demonstrating progress from month to month between rounds, they are much more likely to want to participate in the business again.
They're meant to be easy!
The best investor updates are often the lightest and easiest to produce - they don't need to be 5-10 page reports! Often a 1-pager summarising the key changes in the businesses with several dot points are the easiest to complete but convey the message very simply to investors.
The whole point is to keep investors updated whilst minimising the amount of pain in drafting the updates. We find that if the updates are too detailed, it can be hard to commit to the discipline of writing them every month.
So.. what does the perfect investor update look like?
Here are some suggested bare essentials that we will see covered in most investor updates:
Revenue/Traction:
- MRR/ARR or GTV and Net Revenue
- Number of Monthly Active Users
- MoM growth in Users and Revenue
- Any new major customers signing up/enterprise contracts in the pipeline
Product Updates:
- New features
- New integrations
- Screenshots, Figma mockups, etc.
Hiring:
- New Hires who are joining the team
- Which roles you are looking to fill
Financials:
- Cash-at-Bank
- Burn Rate
- Months of Runway left (projected)
Asks:
- What you need help with from your investors. Is it customer intros? Hiring? Fundraising Advice?
And thats it! There's everything you need for a company update. Sometimes it can take longer to write an update than to actually just talking about it. Even sending a video recording of 5-10 minute recording of yourself as the Founder just talking through the business updates over the preceding month will be a great way to keep investors and stakeholders updated with the business.