An investor update is an essential part of a startup’s communication strategy. Providing consistent updates builds trust and engagement with investors while giving them strategic insight into how they can help the business grow. In addition, these updates demonstrate that a company is managing their investment portfolio responsibly and that they’re good operators. This can lead to greater participation in your next round and referrals from existing investors.
While there are many things that can go into an investor update, we’ve found that four key components are essential:
Overview: Investors want to know how the company is performing and if it’s on the right trajectory. This can include metrics like revenue, new customers, bookings, recurring revenue, customer growth, sales targets, and overall profitability. It should also include the current cash runway and burn rate if possible. It’s also important to communicate challenges transparently, as investors may have solutions or resources to offer.
Metrics: Investors want to see the latest, relevant and reliable metrics. This can include daily active users, monthly recurring revenue, time spent in product, sales numbers, and other data points that give them a clear picture of the company’s performance. It’s also helpful to incorporate trend lines and visualizations where applicable.
Schedule: Set a regular cadence for investor updates and stick to it. This will allow investors to plan meetings around your updates and ensure that they’re read. We’ve found that Wednesdays or Thursdays are the best days to send updates, as this gives investors the weekend to catch up on emails and prepare for meetings.