How to structure a good investor update

Earlier this year Adrian, my cofounder in AngelCube, posted about the lack of investors updates he would receive. Having made investments in over 50 startups in 5 years Adrian stated he didn’t receive a single investor update during Q1 2016.

I haven’t made as many investments as Adrian, but across my 35 (including 31 AngelCube companies, and their follow-on rounds) I receive a range of updates from startup founders and I’ve been able to determine what makes a really good one. There are loads of articles out there that tell startups how to form an update, but I’ve put together my take on what makes a good investor update.

First, I want to give a few tips on what really stands out. These are the highlights taken from investor updates I receive regularly.

The Exec Summary
Like many people, I receive more emails than I’d like. Anything you can do to help communicate important information in a short amount of time is helpful. An exec summary at the top of an investor update with dot-pointed key information is ideal.

The Key Metrics
Most early stage startups have a key metric they measure as a high-level indicator of success. For Uber it’s rides, for AirBnb it’s bookings, for Volantio it’s airlines. Clearly stating growth, revenue, and the key metric means I get an immediate sense of what the quarter had been like.

The Solid Financial Update
Key metrics are great at providing a snapshot status update but they don’t tell a story. Seeing stacked bar graphs on revenue and expenses broken down to display their components (revenue broken down by customer, expenses by wages, marketing, rent, etc) show what the story has been for the last 13 months and give an indication of what’s ahead.

The Questions We’ve Received
This one first popped up on a Sapling investor update and I thought it was super clever. As an investor my job is also to talk about the startups I’m invested in, and anything you can do to better equip me for that is helpful. By including a few questions received from customers and how they’re answered by the founders I’m in a better position to talk about the company.

I like to receive 2 types of investor update:

  • monthly updates, with high-level stats, growth updates, quick product updates and any major news. This should take no longer than 20 minutes to put together.
  • quarterly updates, with historical financials, detailed customer, partner, team, and product updates and a rundown of strategy for the next quarter. This might take closer to an hour to put together.

A template for monthly updates

Exec Summary & Needs
Metrics and KPIs
Including MAUs, paying users, current burn, runway, cash on hand, revenue, expenses, customers, partners, and employees
Achievements and High/Lowlights
Operations (& Fundraising)
R&D, funnel details, marketing channels, distribution.
News & Questions from customers
Announceables, media (that investors can share and reference) and questions received.
Challenges & Needs

A template for quarterly updates

All of the above
Detailed Financials
Including broken down expenses/revenue.
Customers & Partnerships
Product & Marketing
Team & Influences
New hires, team initiatives, articles/books/videos that are influencing the company.
Reflection & Strategy
Outline how the last quarter has been, and what’s to come.

What do you like in your investor updates?
I’d love to hear and learn what other startups and investors can add.