Every three months, we send an investor update about our progress to our investors, advisors, and potential investors. Once you start securing the bag from investors, it's critical that you maintain their trust and your relationship with them. Investors can (and should) do more than give you money. They can offer sound advice, introductions, and so much more (but only if they trust you and understand what you need). Because of this, as a founder you should keep your investors in on the loop of what's going on, because you never know how they can help (or if they can't help, they may know somebody that can).
Even before we got our first investment, we were sending investor update emails to investors who we pitched, but didn't write a check. Despite this, these same investors gave us permission to keep them updated on our progress (and to us, that "no" on investing in us just meant "no, not right now").
Since then, those same people have opened up doors for us through introductions and advice that we needed (but we're confident they're gonna write that check too one day).
Below you will find everything you need to know about investor updates, plus a free template that you can send today to your current (or potential) investors.
But first, what is an investor update?
Investor updates is a way you can keep your investors (or potential investors) informed on your company's progress. High-level speaking, it'll give them (the investor) a big picture of what's going on and what you need help with. Generally, these are sent via email.
Why should you send investor updates?
Once you start raising money, it's so important that you build a partnership with the people who have given you money (or that will someday). Sending your investor updates on a consistent basis will help drive communication and trust, and will overall help your investors get a better understanding of how they can help (and it'll keep your company on top of their minds too).
In addition, investors can help you get introductions to other investors, partners, clients, or potential hires if they see that you're needing such things. Keep in mind, investors are not mind readers and more than likely, you're not the only company in their portfolio. As the founder, you have to do your part in keeping them informed on what's going on with what you need.
Last but not least, you can't build a great company alone.
Investors tend to have a lot of experience, or may know someone that has been through what you're struggling with. By communicating with them, they can be a great resource and can share some lessons learned or actionable tips on defeating whatever challenge is getting the best of you.
How often are investor updates sent?
A lot of early-stage founders send their investor updates every month or every quarter, and larger companies may send it less frequently. If you're still unsure of the cadence, check in with them to see if they have a preference, while also being mindful of the amount of time you'll need in between each update to have something worth sending.
What should I include in my investor update?
As your company grows, the amount of details that you'll include will vary. In the early days, investor updates typically include the following:
- Financials and key performance indicators (KPIs)
- Key hires & team updates
- Your asks
Your investors are busy AF and sometimes they want to know wassup early. Put your biggest wins and things you want them to remember no matter what up top, and make the rest of the email easily scannable.
Financials and KPIs
Here is where you'll include numbers like your # of customers, churn, monthly recurring revenue, monthly burn and cash on hand, etc. Also, if you can, insert a graph and provide a visual for this section to make the reader's experience more interesting.
Key hires & company updates
As your company grows, your team will grow. Here's where you can share deets on your team status, include details on new critical hires that you've made, and also if you're hiring, you can include that info here too.
Whether you’re looking for an introduction or need help with a certain problem, this is where you'll mention it. Your investors can do more than just provide capital, so lean onto them for help you need.
Remember when you succeed, your investors succeed, and they'll do what they can to help you.
Get your investor update template!
*feature photo credit: Andrea Piacquadio from Pexels