6 Tips on How to Write Investors’ Updates and Build Investors’ Trust

One of the most frequent complaints I hear from investors is that founders don’t communicate regularly with them, and even when they communicate they don’t give investors the information they are looking for.

After you raise a round, the most important thing you need to do next in building your relationship with investors is to maintain trust. At the minimum it includes communicating with them regularly and in a transparent manner about how your company is doing. It also includes getting their buy-in on any strategic decisions which require their approval, and of course informing them in a timely manner of any challenges so that you can determine a way forward together.

1. Set clear expectations 🎯 on the format and frequency of your communication. Ask investors how often they would like to get updates and in which format. For example, do they prefer a list of selected KPIs, all financial statements and strategic plans, or just the overview of main accomplishments?

Follow our recommended investor update structure:

2. Start with a concise summary 💻 of where your company is with supporting data📊.

3. Be clear where you need help 🆘 and specifics on how investors can help.

4. Cover what went well 👍.

5. Be honest about your challenges 😨 and transparent about your plans to address them.

6. Be specific about future milestones 🔥.

1. 🎯 Expectations:

1. 1. Frequency: Set clear expectations how often you will be communicating with investors and stick to that schedule. We recommend sending updates on a quarterly basis.
   2. Format: Find out from investors how detailed they want the updates to be and whether they want a follow-up call to take them through the update and Q&A. Our blog presents our recommendation of one such format.

Investor Update Structure:

2. 💻Summary: A strong opening summarizing key company achievements for the past time period

1. 1. Qualitative: Include a short paragraph describing main company accomplishments
   2. Quantitative: Support your narrative with listing 4-6 key performance indicators, how they’ve moved in the past time period and the significance of that change. These metrics will vary by company and can include # new users, subscriptions, customers in the pipeline, conversion rate, revenue, etc.
   3. Data behind the metrics: Provide more context behind the metrics. We suggest you include graphs for the past 6-9 months to show a trend and, if needed, additional narrative to explain the numbers.

3. 🆘 Help needed: Investors are your partners. They also often have years of experience of building startups and extensive networks. Investors updates are an excellent way to ask them for help where you need it. We suggest to have 1-3 clear asks in the following areas, as relevant:

• Sales/ Business development
• Product development
• Hiring
• Fundraising

The following three sections are dedicated to a more detailed performance overview and future plans. We recommend also splitting each of them as appropriate into: Sales/Growth, Product development, Hiring, and Fundraising. For example, if you are not currently hiring or fundraising, skip them.

4. 👍 What went well: Everyone deserves a chance to celebrate the results of one’s hard work. Don’t be shy in this section but also don’t exaggerate. Include a summary of 2-4 main accomplishments along with 1-3 supporting data points for as many sections listed above as is relevant for this update.

5. 😨 Challenges: No one likes to talk about setbacks. It is even less pleasant to admit your failures to others, especially to the people who believed in you and gave you capital to pursue your dreams. You may fear they will lose confidence in you or, worst case scenario, take your company away.

Here is something to think about: if you chose your investors wisely and if they trust you, should not you also trust them? They have invested in other companies before and they understand that setbacks happen. The problems arise not because you encounter setbacks but because you don’t react to them on a timely basis and don’t ask for help when you need it.

Our recommendation is to be upfront about where you face challenges and also list one or a few proposed solutions on how to address them. You may also choose to ask for feedback.

6. 🔥 Future plans: Setting priorities for a startup with limited capital is very important. Focus is everything. Be specific what your near-term goals are for each of the 4 areas above, as relevant. If you have quantitative targets – for example for sales or users, list them as well.