Founders: Keep Your Investors in the Loop

Most founders (including me) seem to forget about their investors as soon as their check clears the bank — at least until they’re raising their next round. The irony is that investors can be a startup’s most valuable resource. Your investors have a vested interest in your success and the difference between success and failure is often dictated by the market’s perception of your startup. Well informed investors will brag about you and your startup. They love talking about their deals and their conversations are often with other potential investors, potential customers, and potential acquirers. If you keep your investors in the dark you sew the seeds of discontent — in the best cases unhappy investors will replace you and in the worst cases they’ll sue you.

Your investors can be the least expensive PR firm you’ll ever find if you simply keep them in the loop. If you arm them with actionable information your investors will be your biggest cheerleaders. They have already bet on you and if your startup fails their reputation will suffer so they’ll do almost anything in their power to help you succeed. The best way to keep them in the loop is a standard email template sent out on a regular basis (I’ve included my suggestions for sections below). Monthly updates are preferred for early stage startups transitioning to quarterly updates for later stage companies. The most important thing is that you make your updates predictable — always delivered at the same interval. Never miss an update.

Investors hate surprises. Just as you never surprise your board members at a board meeting you should never surprise your investors in an update. If you’ve got troubling news you MUST reach out to them personally before you send out your update. Just as importantly you should never send out your update to multiple investors using “carbon copy” — always send each update individually. You don’t want a frustrated investor to “reply all” to your update — as you’ll always have sensitive investors who need more hand holding — accept this fact and cater to their needs without upsetting your other investors.

Section One

The first section of your update should include a short summary of your challenges and the ways your investors could help the company. Always include an ask and don’t forget to follow up on the ask before the next update.

Section Two

The second section of your update should include a standard set of Key Performance Indicators (KPIs). Once you’ve determined which indicators are key to your businesses success you should create a standard template and assign someone in your organization to keep the template up-to-date so you can use it in your investor communications and updates. One last bit of advice, don’t bother including cumulative numbers — investors want to understand the trend and the best way to reveal that data is using month-over-month data.

Section Three

The third section of your update should include progress on the product (development, sales, issues, and release dates).

Section Four

The fourth section of your update should include the current state of the team (headcount, openings, and changes).

Section Five

The final section of your update should include cash-on-hand, burn-rate, and terminal date (i.e. when you’ll be out of money).


Use your investor update as a tool. You need to focus on making progress on your business each month — if you’re not making enough progress to justify a monthly update you’re simply not moving fast enough. Get busy.

About The Author

Alexander Muse is a serial entrepreneur, author of the StartupMuse (available on Amazon), contributor to Forbes and Medium. You can connect with him on Twitter, Facebook, LinkedIn and Instagram.