I’ve been told by my Coach investors and startup friends that I write great investor updates. Entrepreneurs often ask me what my process is and how I write an update. Having been asked enough times, I thought it’d be easier to write up how I do them, so others can learn the process.
How often to send updates
I think the going consensus amongst most founders is to send investor updates no less than once a quarter. I personally think that’s shockingly low and as bad for you as it is for your investors.
My opinion is to increase the frequency from the standard four a year to as close to once a month as possible. This helps you in a number of ways:
- Effort: You may think that sending updates more frequently will take more time, but the opposite is true. When less time has gone by since your last update, you have fewer things to mention and can truly pick out what’s important to share.
- Thoroughness: You can be more extensive when your updates are more frequent. With startups, a lot can happen in a month and while things may not feel important enough to be included in a quarterly update, in a monthly update they will. More information will make your update and will help paint a clearer picture of what’s happening with your company.
- Reflection: More frequent updates means more times a year that you can reflect on what’s happening in your startup. It’s great to review what you’ve done over the past month, which will inform what you do during the next month.
- Team morale: I share my investor updates with all of my employees (financials and all) and sharing them every four weeks is a great reminder to them about all the great work they’ve done.
There are times when it doesn’t make sense to send an update four weeks later. Those times are usually around the end-of-the-year holidays and when a major update is say, a week away and you want to wait for that to be out before notifying your investors. That being said, aim to keep it under six weeks, or it’ll get away from you.
Gathering the data
A lot of people complain to me that gathering the data is the hardest part about sending an investor update. For me this is the easiest part. Here’s what I do:
At Coach, we use two separate Trello boards to manage our marketing and development tasks. We have our various lists in each for managing our to do’s and then at the end we have two lists: (1) “Deployed” and (2) “Told Investors ;-)”.
When I sit down to write an investor update, I look at all the tasks under “Deployed” in both our marketing and development Trello boards and use that data to inform my update. It’s almost as easy as copying and pasting what’s in “Deployed” into Google Docs.
Then once the data is in a fresh Google Doc (“Investor Update #1, Investor Update #2, etc.), I move the cards in Trello from “Deployed” to “Told Investors ;-)” and I have a clean “Deployed” board that will fill up over the next month.
Obviously, the investors don’t need to know about every little detail in “Deployed” (i.e. - every bug fix), so I pick and choose various high-value data pieces when moving them from Trello to Google Docs.
Formatting the investor update
The format of my investor update is very straight-forward. It’s a combination of what I’d want to know as an investor and what other entrepreneurs do.
It starts off with an appropriate “Subject” for the email I’m going to eventually send at the end of the process. For us, all subjects begin with “Coach Investor Update:” and then finish with a few words on the highlight of the month.
I then write an introduction to the update, which is high-level and no longer than a couple of paragraphs. I’ll usually highlight the best part of the update as well as keep the language pretty informal and candid.
The first section of the update is our “Key metrics” highlight; within this section I have three bullet points:
- Our cash in the bank as well as our current runway
- Our main KPI
- Our current growth rate (MoM and WoW)
I then link to our live KPIs in Google Sheets.
This is typically a one-liner that’s either “Nothing new to report. We are X full-time and X contractors,” or it’s introducing a new employee or contractor, as well as recapping our current head count.
This is a simple bulleted list of product work we’ve done since the last update. As I mentioned earlier, I take the most important things from the “Done” board in Trello and type them up here. I just use my gut to judge what’s important from what’s not.
I like to stick to no more than 1-3 sentences per product update to keep it concise. I’ll then link to an example of it and have sometimes recorded short screenshots to show it off when they’re behind a login/password.
The key here is to write the most important product updates at the top, so that they’re the most prominent.
I treat this section almost the same as I do “Product” but I include more data. I’ll often announce new marketing tests we’re currently running, as well as an update on how our past marketing efforts performed.
I don’t always have asks at the end of my investor updates. Sometimes you’re just heads down and you don’t have anything to ask for. Other times, you may have broad questions that you want to toss out there and see if anyone bites.
I’ve found that “Asks” receive a lot less attention than actively reaching out to your individual investors and asking them directly. An “Asks” section is nice to have, but I wouldn’t use it for anything that’s critical. Going direct is best for the important stuff.
Wrapping it up
A simple line to wrap things up and my email signature.
How to send them
BCC all your investors in a single email? Nope. Eric Friedman actually gave me a much better suggestion back in the day: Create an account on Mailchimp or your newsletter sending service of choice and send your investor updates that way. With this method, you’ll be able to track who has read them and which links they’ve opened. It’s always fun to see the few that miss it. :-)And that’s it! Please let me know if you have any questions by commenting below.