Why Monthly Updates are Crucial…
I always pride myself on being a top notch communicator. Being direct and genuine but focused on the facts that communicate substance with nuance are central to my communication style. I try to speak this way and write this way. How one communicates in business and in personal relationships has a huge bearing on their ultimate success or failure. This morning I had a meeting that drove home the realization that I have (recently) failed in this core CEO discipline area. Here is what happened and how I plan to fix it.
In my current company we have been involved in a financing process that started over a year ago and under challenging circumstances. Nonetheless, we have raised a fair amount of money, the last major slug came from one investor who is a serious public equity investor as his primary occupation. His investment occurred in the spring and, at the time, looked to be the catalyst to move on to another stage. We never achieved the expected momentum and today I had a follow up meeting hoping for more money.
The crux of the problem: first, I did not clearly state how important his cash was to us when he invested and second, over the past six months, my updates have been sporadic at best. This creates a serious problem around disclosure and lack of consistent communication.
Many experienced people will point out that the investor should have asked more questions. That is true but besides the point. We are all only in control of our behavior and actions. If one cares about credibility, s/he needs to constantly build it. This action will pay dividends later.
So, I am getting back on my schedule of regular updates. For the early stage entrepreneur monthly updates are a great discipline. Done well, they are an organizing element for goal-setting, reflection and communication to shareholders and partners (where appropriate). My style is to include the following:
- qualitative description of recent events
- new people/partners
- direct recognition of challenges/setbacks/risks
- recent financial performance (summary #’s)
- what to expect in the near future
- an “ask” — i.e. how the reader can help
It should take 5 minutes to read. It will take a little longer to write but will save you time in the future and build credibility for when you need it most.
I suspect my investor will end up participating in this round regardless, but I want to make it easier for the next time around.