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How do you update investors?

Is there a specific framework to follow that things that need to be stated on the monthly or quarterly updates? Thanks for the help

7 Replies

Joe Albano, PhD
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Joe Albano, PhD Advisor
Using the business of entrepreneurialism to turn ideas into products and products into sustainable businesses.
  • Do you currently have investors?
  • Did you set expectations (in both directions) before youtook your investors money?
  • Is there anything that your investors need to know so that they can help the company more?
  • Is there something you DON'T want your investors to know? Why? (Often a sign of a problem that will only get worse if not dealt with now.)
Vanessa Kruze, CPA
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Vanessa Kruze, CPA Entrepreneur
Startup CFO Consultant
Keep your Quarterly Update email to investors to 4 Major Sections:
  1. KPI Updates: Downloads? CAC? MRR?
  2. Financials: Runway? Burn?
  3. Product: new updates?
  4. Roadmap:New Hires? What's next?
Be concise and use graphs/charts!
Robert Warren
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Robert Warren Entrepreneur
Founder and Managing Director, Mean Eyed Cat Venture Labs
A few months ago we had Joe Milam from AngelSpan -https://angelspan.com/team/

present to our investment group. His tool looks very useful for providing investors with regular updates.

Joe Milam
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Joe Milam Advisor
CEO AngelSpan, Inc.
Proper investor communications can extend the 'honeymoon period' most startups enjoy with investors, particularly angel investors. However, getting it wrong, or not doing it at all, 'poisons the well' of goodwill and can make building your company harder than it needs to be. The proper cadence is Monthly Updates covering the operational progress of your business (little financial data is needed Monthly, particularly for angel investors). Quarterly reports is where your financial data gets included, as well as a balanced overview of the prior quarter. There are a myriad of templates out there on the topics. Sometimes the challenge is finding the time, or the fear of writing properly to sound cogent without going into too much detail. AngelSpan does solve these issues, along with additional professional services that maximize the engagement with both investors & other stakeholders interested in your success. Kudo's for you for wanting to get this right. You are in the minority! Book a Time
Irwin Stein
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Irwin Stein Advisor
Very experienced (40 years) corporate,securities and real estate attorney.
It isn't just what you say but how you say it. With a public company there are very specific rules for shareholder communications. With a private company the rules are usually overlooked because shareholders cannot sell there shares in any event. If you communication or lack of communication cannot spur them to take action you have less liability for a bad communication. A professional VC firm will often tell you what they want to know and how often they want to know it. What you say, when and how you say it may come back to haunt you if you seek additional financing in the future as they will become part of the next round due diligence. Shareholder reports should be balanced with good news and bad. The best advice is to give financial info once a year and nothing else. Even fluff like, "we went to a trade show" can be second guessed; why that trade show or why not 3 trade shows.
Wade Eyerly
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Wade Eyerly Entrepreneur
CEO, co-founder at Beacon
I find it best, when sharing information with a Board, that your format is less important than the information - which should include: The bad news. Where we need help. The good news. What this means. Those four bullet points will be 99% of what needs conveying. It's worth sharing significant milestones that were passed, or significant hires that were made - but mostly, it's "What do I need to know now (bad news)?" "How can I be helpful to the company?" "What are they doing well?" and "What does that mean relative to the plan I invested in?" I find an unscripted email - straight from the founders head is probably best. I'm not the best writer, but I can knock out an update to investors in about 20 minutes. You can, too, and you should. 1. It forces the most important info to bubble up. 2. It is necessarily concise. 3. It will prevent you from spending *way* too much time on a board/investor update freeing you up to run the company. 4. It's authentic. The more polished/varnished it is - the more someone wonders how much time was spent on it, and what is being covered up. So, I start with the 4 questions above, and answer them one at a time. For each company how you answer those questions is different. Is good news a number of members acquired, a profit metric, or progress against a plan and product being shipped? Is bad news the departure of a key employee, loss of a strategic partner, or a delay in shipping product? While the information may be different - the format is usually similar. Next, I think it's important to understand why you're updating investors. Investors should be a.) a relationship you are always cultivating, b.) people whose interests are aligned with yours and eager to support you, and c.) experienced folks whose wisdom can help you achieve your goals. You need to be open, painfully open with them. If the news is bad, it shouldn't wait for a quarterly update. If it's good - that's fine. If it's company threatening, and you're absolutely dreading telling your investors - you need not to send an email, but to pick up the phone. The faster you tell them, the more people that can help you put out the fire. It's in exactly the moment where your instincts may tell you to hide some information, avoid or omit the bad news that you should be shouting it to your board. You're on the same team - and no investor should *ever* be surprised. And it's ok to say, "We just found out X - we don't have a plan yet, but give me 36 hours and lets get on a call with everyone and we'll let you know what we're thinking." Be honest. Be available. Be upfront. And the format will matter a lot less.
Richard Awni
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Richard Awni Entrepreneur
Project Management | Clean Energy | Solar | Go-To-Market | Emerging Technology | Branding I Marketing I Non Profit I HR
Wade you are right on point, to the question asker that is a great formula.
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