Every seed stage founder should send monthly investor updates.
You can make the time.
Update: 2+ years after writing this, I launched a tool to make this easier. See below.
Startups are hard and founders are busy. But most founders get to busily focus on their startup because someone else gave them money to do so. And that’s an amazing privilege.
After starting a few companies, as well as making a few angel investments, I’ve been on both sides. And recently I’ve noticed that not a lot of seed stage founders send updates to their investors. Seeing it, and knowing how it feels to be in the dark about what’s going on with an investment has inspired me to try to send LaunchKit investor updates on a regular basis.
(Shameless plug: LaunchKit is amazing and every iOS developer should be using it.)
In a great post on the topic Jason Calacanis said “If your startup isn’t sending you monthly updates it’s going out of business.” Not true 100% of the time, but it’s certainly a strange sign when a company goes radio silent (especially when you know they’re not experiencing hyper-growth).
It takes 15–60 minutes once a month and, in my opinion, is something all seed stage founders should commit to doing. These updates don’t need to be super detailed. At the very least, they’re a general reminder that you’re not doing nothing with the money you were given. When effective, they keep your extended team on the same page and let people jump in and help when you need it.
So, start an “Investor Updates” folder in Google Docs and set aside an hour every month to write an update. I have a recurring meeting on my calendar at 3:00 PM the last Friday of every month. This is easy to set up in iCal.
Here’s our general format to keep investors — the ones paying our rent — up to date:
- tl;dr: 2–5 sentence summary of email in paragraph or bullet form with the hope that all investors will at least read this.
- Team / Recruiting: Quick update on anyone we’ve hired or positions we’re looking to fill. Investors have great networks, and making sure they know what you’re looking for is important.
- Product: Update on product releases and what’s in development. Attaching screenshots is great if you have can.
- Press: Any significant press we’ve recently received (put after Product because usually tied to that).
- Metrics: A quick rundown of 3–5 key metrics we pay attention to, and how they’ve changed since the last update.
- Runway: How much time we have until we run out of money, and when we’re planning to raise more.
- Misc: Anything not covered above.
That’s it. It really doesn’t take that much time. And it’s actually pretty fulfilling. Most months, it reminds me how much is going on and what we’re accomplishing. Bonus: you end up with a nice little history of your progress.
If doing this monthly seems like too big of a pain, then do it once every two months. Or three. Just don’t do it never.
Once you raise bigger rounds, this kind of frequent update isn’t as necessary because you’ll have more formal board meetings to keep key investors up to date. But in the seed stage I believe it’s important to keep your stakeholders (including ones without legal information rights) on the same page. Consider it an ongoing “thanks for the money you gave me that I don’t have to repay you for if this doesn’t work out.”
Investor Updates Tool
Check out https://www.investorupdates.net, a tool I built to make this whole process easier.
Brenden Mulligan is a product designer building LaunchKit, a set of tools to help mobile makers launch apps. He also works on Cluster, enabling users to create private social networks around interests and experiences. Brenden previously created and sold ArtistData and Onesheet.
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