A startup’s investor update is an important communication tool that allows founders to highlight company successes, challenges, and future plans in a way that helps investors stay up-to-date on the progress of their investment. When done well, investor updates build trust and transparency that can be critical to long-term success.
Depending on the stage of your business, an investor update may include various sections such as key metrics, company performance (e.g., revenue growth, cash runway), and more. Some sections of an investor update lend themselves to more detail than others, but it is generally a good idea to be as consistent as possible with each update to provide investors with a clear picture of your progress over time.
It is also a good idea to open up the lines of communication during an investor update by allowing investors to ask for help or give advice. Many investors will have connections to other entrepreneurs or companies that they can make an introduction to, so this is often a great opportunity to tap into the networks of your investor base.
While it may take a little bit of work the first time you write an investor update, once you’ve got a structure in place it will become much easier to produce them. The most important thing is to stick to a consistent cadence, which will help investors know that you take these updates seriously. A regular investor update sent on the last Friday of every month will make an explanation of why you missed a revenue milestone target and a request for help finding a VP of engineering much less dramatic than an email received 6 months late.