As a founder, your time is incredibly precious, so having to proactively update your investors on your startup’s status every single month can seem like a time waste, a drag, and can even turn into something you begin to dread.
But in this piece, I will explain how, if you do these correctly, they can be one of your most valuable assets of your investor/founder relationship and give you the tools and templates on how to maximize the outcome of these updates.
First off, your investors expect to be kept in the loop- you don’t invest millions without earning the privilege to know what’s happening on the ground.
But these updates are not just a responsibility, they are an opportunity: a way to keep your startup top of mind, hold yourself accountable to your milestones, and create a company culture of transparency and communication from the ground up.
Let’s dig a little deeper:
Keeping on top of mind
Your investors have large networks and are often very resourceful. Writing consistent updates is a sure way to keep them in the loop and remind them that you exist. More than that, these updates can serve as a tool to leverage their knowledge, experience, and network.
If you are needing advice, looking for core hires, trying to reach new customers, etc. including an ‘ask’ section in your update will ensure your investors are aware of these needs and are able to provide support, introduce you to valuable connections, and keep you top of mind if an opportunity arises.
Holding yourself accountable
Investor updates are not only for the sake of the investor, but they are a great way to hold yourself and your company accountable. If you commit to writing monthly updates, you will constantly be focused on generating meaningful progress, hitting those KPIs you set for yourself, and re-collaborating if you see certain KPIs are not being reached month to month.
On the flip side, monthly updates also allow you, as a founder, to sit back and look at the bigger picture. Often founders in the trenches of building a company can lose that macro perspective, and these updates are a great way to step back, celebrate the small wins, and evaluate your growth.
Creating a respected reputation and a solid company culture
Monthly updates to your investors are the best way to show the kind of entrepreneur you are: communicative, transparent, and one who respects your investors contributions.
Furthermore, holding yourself accountable to this level of transparency and communication will likely influence your entire company, especially if you are in the earliest stages of your startup. Committing yourself to open communication, transparency, and accountability are core values that will trickle down to your team.
Some funds, like us at F2 Venture Capital, are proactive about keeping up our relationships with founders with the option of biweeklies with our team, and ongoing communication. While many funds are less proactive about engagement, there is the expectation of monthly/ bi-monthly updates.
While they are often expected, instead of viewing them as a burden, we should view them as the chance to leverage your investor network, hold yourself and your team accountable, and set the tone of your company culture with transparency, open communication, and data-driven decisions.
How to write your investor updates
Now that we understand the value of these investor updates- how does one go about actually creating them?
Below is the template I encourage our portfolio companies to use when creating their monthly updates. In each section there is space for updates, lessons learned, insights, and next month’s goals.
Every investor update should end with a list of ‘asks’ where you make clear how your investors can help you.
➡ Tech and Product KPIs
➡ Talent and HR
Feel free to download and edit and I hope it empowers you to make the most of your founder updates in the future and see them as opportunities, rather than burdens.