A short & sweet Guide to Investor Updates (for early stage companies)
Recently, a founder friend asked me what the best investor updates we get look like. Figured it would be fun (and hopefully helpful!) to share some of our discussion.
First taking a step back, what is the point of an investor update?
For investors — updates provide a snapshot of where the business is (and overtime, can be a somewhat helpful historical record of the trajectory). They help give investors a sense of health in the business so they can, for example, make sure there is sufficient runway (and if not, support appropriate next steps e.g. planning the next fundraise). Often investors also need certain information/metrics for internal reporting.
For you as a founder — it’s an opportunity to send a bat signal for things you want help on via an “asks” section. The rest of the update gives your investors a snapshot of the business so they can stay up to date and be better equipped with the information needed to help you. Hopefully these updates also serve as an opportunity for you to step out of the day to day execution and reflect on the business on a high level at a cadence. Lastly, investor updates can sometimes be used to engage / keep warm prospective downstream investors (minus any proprietary info).
Given this, the best investor updates are pithy — concise, clear, and comprehensive.
For example, a great starting outline might look like this:
What we do
[One liner on what the company does — a nice way to start the update and a refresher on the latest positioning][Qualitative info]
Asks (for your investors)
e.g. does anyone have connections to xyz (e.g. someone with experience scaling up a sales team; someone great at selling to government; customer intro)? Looking for intros!Highlights
[Can be related to any part of the business: product updates/development, GTM/sales/marketing/partnerships, customer growth/usage/learnings, hiring etc.]Lowlights
[Similar to above, can be related to any part of the business]Focus for the next month
[Whatever the top priority/goal(s) are][Quantitative info]
Finance & Metrics:
- Revenue
- Cash in bank
- Monthly burn
- Months of runway
- FTE headcount- Depending on the stage/traction of the business, other metrics could also be relevant here e.g. breaking down ARR (new, expansion, contraction, churn), net revenue retention, logo retention, etc. If there are any business-specific “north star” metrics (e.g. GMV, any usage metrics, etc.), they are helpful to include here as well. It is ideal to keep this set of metrics consistent so it’s easy to compare and show progress between updates.
Shoutouts (for any helpful investors/angels/advisors. These are nice call-outs + friendly peer pressure for others to add value :))
— e.g. Thanks Sarah for [the customer/advisor/candidate intro, advice on xyz, or whatever was helpful]
Here’s a copy/download-able google doc of the above outline — feel free to make a copy and use it!
Another possible format is to structure the update by areas of the business (e.g. customer developments, product/tech, finance and operations, team, investor asks & shoutouts).
There’s no single right or wrong format. I like the above outline because it’s clear, easy to digest, and covers everything I’d want to know as an investor. Happy update writing!
Special thanks to my friends Dion Dong and Matthew for thoughtful suggestions that helped refine this post.
Early stage here referring primarily to pre-seed through Series B companies.
