How to write great investor update emails
Say more with less — here’s how
There are three reasons to write investor updates:
- You want them to be informed and trust you so that they will keep investing.
- You want them to help you. And they need to be informed to be able to help.
- You want to zoom out and reflect. Much easier if explaining to someone else who cares a lot about what you do, but is not up to date.
Here’s my template, section by section:
- What we do (can be subject)
Everything you write should serve one of two purposes: help you or inform the investors so they trust you and can help you in the future. These people are not your bosses.
1. What we do
Startup Inc — uber for bots
Start the email by reminding people what you do. Many angels and VCs get a ton of email and work with a lot of people. This is less needed if the recipient is your investor, but much more so if you want them to become one.
Just write a short line to get people to remember. Could be the subject if you include month.
Hi! It has been a rough month with a lot of hard work and some team stress, but we are pushing through and closing in on the public launch.
Very happy to get help with intros to media (see the help section below). Cool fact: we are more than 10x faster than Uber on routing!
This is the executive summary. Make sure to mention mood and the bigger picture of what is going on. Give the investors the current brag and pitch and tell what help you need.
Some investors will only see this, and it should be enough to get what is happening high level. (I believe in recipients being able to read this without scrolling on a mobile phone.)
- Got $200k credits from Google Cloud. Free money! :)
- Hired third developer. Remote in Brazil. Check out her amazing profile: [github-link]
- Great feedback from beta users (more on Traction below)
The three things that were great. Just give a short bullet for each and link if there is media material or things to read.
- John (third co-founder) decided to leave, and we are looking into vesting, etc. Sad story, but I think it is best for all.
- The moving took a lot more time and focus than we wanted. :( Next time remind me that the three only things that are important are employees, product, and customers.
- Can’t come up with a third. Sorry.
The three things that were bad. Transparency is a good thing. Surprises are rarely bad if communicated early and honesty.
I usually don’t send really bad news if I haven’t slept on it and thought a bit on mitigation, but I absolutely don’t want people to hear it from someone else first.
- Cash: $1.3m in the bank (!), burning ~30k. Expecting to increase to $90k so roughly 17 months in the bank. [Link to rough “budget”]
- Product: 23 ns from order to dispatch (-20% since last month. Remember: less is better)
- Traction: 450+ installs and more than 20% ordered a ride first week. Still early. (New metric. Nothing to compare with.)
More metrics to come as we are defining them with Lucy (thanks!!). If you want to see more check [link to metrics dashboard] and explanation of what we are measuring [google docs link].
Update people with metrics and if they are not obvious; explain them. Also, put them in context on how they have developed over time. When you have multiple months of data, it might be better to also include charts.
The metrics will change over time as you develop so “deprecate” metrics and add new ones, but explain when this happens and why.
Finances is always a metric you need: cash in bank, current burnrate, and runway (without revenue or at least without any optimism). When are you “Default Dead”?
When you have sales metrics then include them here, but high-level and again: these people are not your boss, but communicate what is actionable or informative.
Product: “Finally got the narrative and pitch coherent!”
- Focus. We are really sure about the pitch now and the focus to be the best virtual transportation platform for bots. For more details on pitch check: [dropbox link].
- Biggest fear is time from order to dispatch, and we are looking into a p2p system to be able to get cheap global coverage. Plan: Mark (CTO) is looking into it, and ETA is 2–3 weeks.
- We need analytics on usage and completion and are looking into how we can set that up. ETA: 3 weeks.
This is a section a lot of founders write too much about. You are probably 100x more knowledgeable than your investors and advisors about this. That means you risk not only talking over their heads but getting idiot feedback from people you respect a lot.
I recommend adding a simple summary, as if you told it, within quotes. This summarizes the context, so it is easier to understand how you feel about it and get an overview.
The goal of this section is to make sure your advisors can sell your product. Also, use it to convey your plans so that you have to think that through.
Team: “Lost co-founder, hired dev. Trying to stabilize.”
- As mentioned, John left. Short story: we have very different ambition levels, and I would still hire him any day as an employee. He suffered a lot from the uncertainties of being a founder, but the most reliable coder I know. Happy to do intros.
- Hired new dev [github-link]. Seems amazing.
- No further changes planned coming 2–3 months.
Announce team changes or recruitment needs. Usually, keep this short. This is not a team performance thing, so don’t use then as an outlet to give feedback to your collages. This is facts, and praise if needed.
I like having it as I want this email to be sent to the rest of the team too and introducing team members makes it easier for investors to reply with a welcome to new people.
If you want, you can skip this section and just keep it as a number under KPIs with how many people you are.
- Moved into new office at [address]. Drop by if you are around!
- Going to offsite next week so will be slow on email.
Add if needed what things don’t fit the other categories. But keep short.
Sometimes I skip this and have a specific “Coming Up” section if there is something concrete happening soon.
- Would really need help with the launch! Comment on this doc [google drive link] or pick a time in my calendar [calendar link]. I am super inexperienced on this so any help will be rewarded with a bot with your twitter handle :)
Write where people can help you and be as explicit as possible to make it easy for people to help you. If you need intros, write to whom or to what kind of companies and roles. Include a blurb about the company that the investor can copy-paste intro the intro.
Remember: Make it easy to help you! People want to be needed. Don’t hesitate to ask for help, that is why these people are here.
- Lucy for helping out with metrics!!
- Evan for doing all the legal work related to co-founder departing. Saved us $50k+.
- Marie for reviewing blog posts. (This is your 5th mention here! Streak: 5.)
By thanking the people who have helped you they are more prone to help you again. And, the people who didn’t help you feel that they should be on this list too. These people are peers, so they compare themselves to each other.
Also, notice the trick of introducing a “streak” for super helpful people, motivating them to keep helping and not breaking the chain.
These emails should at least be sent monthly. But the faster you move, the more you want people informed, the more frequent. If you are in a three-month accelerator, do bi-weekly. If you just closed a round or signed a big deal, maybe do an extra, shorter version.
Style and Length
Make it brief, but make it reflect who you are. If you like emoticons, then it is ok to use them. If you don’t, then don’t add them to look smart. Be yourself, but realize that people are not here to read novels but to be updated and potentially help.
This email is intended for very close people — like advisors and investors. People you trust not to forward this to media or competitors.
When you don’t have investors, send this email to to-be-investors, but once you have signed a “real round” then keep this to that group.
I like having the team on CC to show that we are united on this, as well as it is good to make sure everyone has the same information. But if you don’t want to it is ok.
Personally, I like putting all investors on To and not Bcc, but people have different opinions on this one.
Honesty is paramount if you want to get value out of the email. Part of the purpose of the email is to enlist people on your common voyage. If you’re not honest, no one will be able to help with things that are important.
Be honest and enthusiastic. But also constructive, self-critical, and crass.
Sending a short email but adding links to your dashboards, plans, and documentation doesn’t aide you. I think it is cool with startups that give access to the CRM or bug tracking dashboards, but I don’t go there.
You want informed investors, and it is lazy and dumb not to write a summary so that people can help you.
The example above looks like a lot of work. It is. Reflection requires thinking. I usually book 1–2 h in my calendar to write this where the main bulk is thinking what we’re actually doing and why. Go through it with the team to get everyone on the same page and get feedback. Then 30 min to implement their feedback. And send.
If you feel that it is too extensive: Do less. Just make sure to do it.
Topics not to include
Certain things are sensitive or outright stupid to write. Remember that the email can be forwarded. My rule of thumb is that I would be able to say the content to someone’s face.
If you are patenting something or in a legal battle, don’t explain it on email. Lawyers don’t like that.
Also, if you are approached by an acquirer or even just another investor, I don’t include it but call the closest advisors and discuss it with them. I would actually urge you to always keep your close investors updated on these matters.
Please avoid. And — don’t send your investor update as a PDF. It makes it impossible to reply and comment to.
What to expect
Most people will not help out or even reply. Just as in rest of life, a majority are leechers and a few will always be there for you. Don’t get angry, just find and work with the good ones. And remember, it is not that easy to help out.
Other media to include
Some people are more visual, and some topics are better conveyed in images or even video. Feel free to use that then. I have done (hidden) podcasts as well as videos to give people the overview of where we are.
Videos are not a replacement for email. Send emails too.
Other emails to send
I send a different email to a wider net of potential employees and future investors (“Three great things that happened to COMPANY NAME in January!”). That contains the short line of what we do, three highlights (slightly polished and not as transparent as the template/example above), and how they can help or engage (upvoting, download, etc.).
Another email is the public one. Like your customer / partner / user newsletter. That is done with marketing and user education as a purpose.
Also, if you want help from one person; send them a direct email about it.
I really hope more startups spend the time to think things through and keep their advisors, potential investors, and current investors up to speed. If you are in doubt, listen to Backstage Capital’s Arlan talk about how to use investor updates as a hack to get an investment (disclosure: I’m an LP).
Remember, why do you do this; because you need help and need input from people who have done it before. Be honest, be consistent and be clear. These people are on your team.
Here’s my second guide: How to get investors to work for you.
What did you think I missed or should have been different? Just ping me on Twitter, email, or comment here.