Please accept YouTube cookies to play this video. By accepting you will be accessing content from YouTube, a service provided by an external third party.

YouTube privacy policy

If you accept this notice, your choice will be saved and the page will refresh.

There are many good reasons to update your investors regularly on what’s happening with your business. Some venture capitalists and angels like monthly updates, some prefer quarterly investor updates, others are fine with ad hoc information – one founder created a WhatsApp group of his investors and just messages us whenever he wants. It helps to build confidence when an entrepreneur takes ownership of updating their investors and do not wait for investors to ask for updates.

The investor has placed their trust in you and taken considerable risk to help you achieve your dreams. Regardless of your fiduciary responsibility, the entrepreneur has a moral obligation to let these people know what’s happening with their money.

In addition, when a startup is young and relationships with investors are new, it’s even more important to invest in building a relationship. However, an entrepreneur’s first responsibility (and passion) is to move the startup ahead. Regular investor updates help solve both problems to a large degree, without the founder(s) needing to take time away for one-on -one calls or meetings.

  • It helps continue to build trust.
  • It keeps the investors interested and excited about what’s happening with your startup.
  • If things aren’t going so well, it isn’t a surprise to your investors. Bad surprises aren’t a good thing for anyone and frequently end with frayed relationships.
  • If you need help with something, this is your chance to ask your investors for help. It is especially important when things aren’t going as planned.
  • If they know what’s happening, you continue to build trust with them, then, when you take another swing at raising more money, they’re more likely to help you or participate.

This is an example that a company selling a product online might send to an investor.

Dear Pankaj,
It’s time for another update on where our startup is going. Here are some high level things to start with:

  • Gross Burn Dec 2018: $100,000 / month
  • Revenue Dec 2018: $20,000 / month
  • Net Burn Dec 2018: $80,000 / month
  • Cash in the bank Dec 31st, 2018: $850,000
  • Runway (typically Net Burn but could be different based on growth, cost cutting, etc.):14 months
  • Total Pageviews this month Dec 2018: 4,250,000
  • Pageview growth from (last month/last quarter/last year): 60%
  • Total Unique Visitors Dec 2018: 2,125,000
  • Visitor Growth from (last month/last quarter/last year): 40%
  • Total Items Sold Dec 2018: 8911
  • Items Sold Growth Since (last month/last quarter/last year): 10%
  • Average Order Value Dec 2018: $2.25
  • Order Value Growth Since (last month/last quarter/last year): 15%
  • Gross margin Dec 2018: 35%, up from 24% in Dec 2017
  • New product summary, Challenges Being Faced, Goals and targets for 2019, etc.

Of course, please modify this for your business, include your KPIs and adjust for the frequency with which you update investors.

Getting a routine for investor updates going also helps your team focus on the targets you’ve laid out together as well as keeping you apprised of situations that may be brewing and having a good handle on your KPIs.

What tools do you use to track your KPIs, effectively create and share your updates with your investors and stakeholders? Please share them in the comments.