How to Write Genuinely Helpful Investor Updates (that Don’t Suck)
As a Seedcamp Venture Partner, start-up advisor and occasional angel investor, I’ve found myself looped in to an increasing number of investor updates of late. While I’m by no means an expert in managing investor relations, I’ve spotted a few common patterns that make these updates a joy to read from an investor perspective, while allowing founders to get the most out of their investor and advisor networks. Let’s start with the basics…
For those unfamiliar with Investor Updates they’re simply an email (or sometimes a Notion page) that gets sent round to your investors every few weeks, letting them know how things are going. While this may feel like a chore to some, it’s a great way of keeping your company at the top of your investors (and advisors) minds. Let’s say you're looking to hire a great designer for instance. There’s a good chance one of the recipients of your update may know somebody who’s recently come on the market and would be perfect for the role. They may even be having lunch with them the next day, so getting on their RADAR can be super helpful. The question then comes down to how to write these updates so they have the maximum impact.
Make Your Updates Succinct and Easy to Scan
Running a start-up is fun, and a million things are likely to have happened since your last update. However, while it’s tempting to add every last detail to your updates, nobody wants to read a copy of War and Peace every few weeks. As such, it makes sense to keep your updates succinct and easy to scan. This means breaking the update into clear sections with well written headlines, making liberal use of lists rather than long sections of prose, and highlighting specific issues you need help with, or calls to action.
While there’s probably no perfect structure, most investors will want to see some version of the following information.
The Big Wins
The Progress you’ve Made Since your Last Update
Financial Health and Product KPIs
Start with the Big Wins
It makes sense to start your update with your big ticket items. So have you made any major product releases, landed a key client, hired a killer CMO or been featured in a major publication? This not only gets you readers excited, but will pique their interest in the rest of your update and keep them reading. It’s probably also worth including a few important KPIs in this section, including how much runway you have left, just to give folks a general idea of the current trends.
Journalists talk about using an “Inverted Pyramid” where you start with the most noteworthy information focussing on things like what, who, how, why, where and where, before delving into the details and background. This means that casual readers will be able to pick up the core of the message by reading the first few sections, while more dedicated readers will want to delve deeper.
Outline the Progress You’ve Been Making Since the Last Update
With the big wins out of the way, you can dive into a little more detail and talk about what you and your team have been doing since the last update. For early stage products, this will probably focus on product improvements, recent hires, new customers and important product learnings. As the product progresses, it’s likely to skew more towards sales and marketing activity and growth.
This is an opportunity for you to demonstrate momentum. After all, you don’t want to leave your investors wondering what you’ve been doing the past few months and have them badgering you for an update. So this helps you head any questions off at the pass.
This section should lead nicely into the topic of metrics and performance.
Key Performance Indicators
While you’ve probably already highlighted a few KPIs in previous sections, some founders like to share a detailed dashboard of all the things they’re tracking and how they’ve been performing. It’s often hard for external people to read the data, so it’s usually worth explaining why you think some things are up and others are down. “Signups were low this month due to the summer break. However churn is also down which means our MRR is still 7% up over last month”
While it’s tempting to cherry pick or sugar coat this data, it’s important to be as honest and open as possible. Not every metric will be up and to the right, so being clear on what’s working and what you need help with will allow your advisors and investors to provide the right level of support and advice.
Now that your investors have a good idea of what you’ve been doing and where things currently stand, this is your opportunity to explain what you’re going to be working on between now and the next update. This is likely to be a mix of new features you’re going to be working on, sales and marketing initiatives you’ve identified, new roles you’re going to be trying to fill and how you’re planning to address some of the challenges you’ve just outlined.
Sharing this information gives your advisors and investors confidence that you know what’s going on and have a plan to address your challenges. It also starts planting seeds for how the people on your list might be able to help. In fact this is one of the reasons why these sorts of updates are so useful; because it draws out skills or connections you have in your network but may not realize.
Here’s How You Can Help
Advisors and Investors are there to support you, so it makes sense to wrap things up with a list of specific asks. Are you about to hire a new designer and need help reviewing the job ad or sharing it around the design community? If so, ask for feedback, recommendations or whether they can share the ad with their networks? Looking to target specific companies with a sales message. Ask if anybody on the list has friends on the senior team of X, Y and Z company? Needing help with a tricky tech issue like video performance? Ask if anybody can introduce you to a specialist in this area. You’ll be amazed how much help folks will be able to give you if you simply ask.
To encourage continued engagement, it’s always worth putting a bit of a shout out at the end of the update thanking those who helped you last time around. “Big shout out to Reshma for introducing me to the Hustle Fund crew. Also a huge thanks to Alex for helping me tidy up our cap table”. Not only will the people who helped you get a warm rosy glow from the shout out, but it’ll also set expected behaviour and make it more likely for the other folks on the list to offer their support as well.
Added Benefits of Investor Updates
Investor updates may feel like a bit of a hassle. However, spending time thinking about what you’ve achieved the past few weeks and what you’re planning to achieve over the coming weeks can be a super helpful practice for founders. With things moving so fast it can often feel like you’re not making as much progress as you’d like. However going back over the past few months updates can be illuminating, and show you just how far you’ve come.
While most people limit these sorts of updates to external advisors and investors, there’s an argument to say that these sorts of updates would be of benefit to your wider team. So while you may not want to share every challenge and speed-bump, you may be surprised how much your team appreciates seeing something similar, and how much extra value you might be able to unlock as a result.
One final thing to touch on is cadence. Essentially how often should you be sending out investor updates? Some teams I work with send out updates every month. Others send them out every couple of weeks. I had one founder recently suggest they send them out weekly, which was super keen, but potentially a rod for their own back.
I personally don’t have a preference as it really depends on the bandwidth and velocity of each team. If you are going to post every two weeks it makes sense for the updates to be shorter while you’ll want to go into slightly more detail if you’re working on a monthly schedule. You may also find that as your company grows it gets harder to pull together the necessary KPIs quick enough bi-monthly updates, so I generally see companies switch to more detailed but less frequent updates as they grow.
Time to Write that Next Update
As I hope you’ve seen, investor updates can be a great way to get value from your existing investor and advisor network. They may be a challenge to write at first, but once you’ve got a template going, you’ll be surprised how quickly you can knock them out.
While it’s tempting to see these updates as a purely external activity, I think writing them forces founders to think more strategically about their progress. In fact, investor updates are almost a form of business journaling, and their benefits are much more profound that simply keeping investors up-to-date. So if you are running a start-up and haven’t started producing regular updates, I’d highly recommend you give it a try. You might be surprised how valuable and cathartic you find the process.