There are plenty of resources out there to draw inspiration when writing a monthly or quarterly investor update for your startup – some even down to explaining why we need them.
So, here’s my own take on who really reads an investor update?
Your current investors
- Enough said, your current investors have a fiduciary duty to their limited partners (LPs). They need to report on the progress of their investments (be it good or bad).
- An investor update is considered one of the little things you need to do to build a relationship with your investors and maintain their attention beyond asking for money. This relationship is important if you expect your investors to work with you during tougher days, when you could be asking them for some much needed help.
- FOMO is real in this modern world, and since we can’t avoid it, why not make the best out of it. Potential investors are people who you have met and struck a good chord with during your pitch meetings, but it was a “not right now” for many various reasons. These are people who’ll like to read about your growth, your challenges and how you handle them. They could still be converted into your future investors in the short or long term. Gradually, their indifference towards you, your product, your team, or whatever you can imagine could slowly be turned into affection by reading what you have constantly reported.
You and Your Team
- Committing to sending a regular investor update shows that you are holding yourself and the team accountable. Let’s not kid ourselves here, providing investor updates takes time, and does feel a little bit of a chore on days when you’d rather be working on your product launch, shipping your next release, or business developing with a new prospect. This is the time which you should allow yourself to take a step back and look at your business, to celebrate the wins, retrospect on the losses and creatively think of ways to improve from an fresh perspective.
- A well written, well thought out investor update for members of your team get to read is motivating and helps fuel the momentum you’d like your team to be part of.
Now that you are clear on who reads investor updates, I hope you’ll enjoy it a little more when you’re due for your next one.
One tip to writing your investor updates I’d like to share is to first write one version catered for one specific category of reader (i.e. current investors, potential investors, you and team), then make minor edits, to cater to the other groups of readers.
I’ll give more tips on my next post. Feel free to drop me a line at firstname.lastname@example.org if you have questions. 🙂