We teamed up with our friends at Strut Consulting to develop best practices around sending Investor Updates that can keep your investors, advisors, and admirers not only apprised of company evolution, but more importantly, engaged and inspired to continue leaning in. Below is our guide:
Investor Update Best Practices Guide
A guide to help portfolio companies learn the purpose, importance, and best practices for sharing investor updates.
What are investor updates, and why are they important?
Investor updates are a document shared with investors to update them on your company news on a regular, consistent basis. If your investment agreement requires reporting to investors, regular investor updates may be required. Investor updates are important because they allow your investors to:
Stay engaged in your business so they can assist according to their areas of expertise, helping addresses your explicit asks and challenges
Understand how their investment dollars are being spent
Track your progress on goals and key milestones
Gain key insights to determine future investment and plan cash reserves for follow-on funding in your company
Know that you’re an active and engaged entrepreneur who values your investor base and their expertise
Build trust and rapport with you to further build your relationship
Hold you accountable and allow you to reflect on your business to ensure it’s success
Who should receive investor updates?
Current Investors: Your current investors should receive your investor updates.
Potential Investors: If you are preparing to or are actively fundraising, you may send potential investors your update. However, it is ideal for prospective investors to receive an abbreviated version of your investor update that highlights what you do, how you do it, and your traction to date. Be sure you’re not sharing any privileged information reserved only for your investors, i.e., customer names, partner names, investor names, IP, roadmap details, etc.
Advisors: Formal or informal advisors to the company should receive your investor updates.
The Company’s Leadership Team: Key company leaders should also receive the investor update for transparency and to resonate the company’s vision and plan internally and externally. Additional trust is built when team members have evidence of the CEO sharing thoughtful, accurate, and reflective updates.
How often should I issue an investor update?
Quarterly: As a standard best practice, we recommend sending your current investors a quarterly update no later than ten business days post-quarter.
Monthly: Sending regular investor updates consistently reduces or halts inbound requests from your investors, which gives you back the time required to build your business. Many investors equate regular updates with an increased likelihood of success. Therefore, we recommend sending a monthly investor update to keep investors engaged and willing to participate in future rounds, assuming your business is tracking on goals.
4-8 Weeks for Potential Investors: For potential investors, we recommend sending an update every four to eight weeks to stay top of mind and provide meaningful data that indicates your traction.
How should I share investor updates?
Many investors live in their inboxes, so sharing your updates in an email is helpful and increases the likelihood of it being read.
In addition to sharing your investor update in the body of an email, for convenience, you can attach a PDF version of the update or link to a version stored in the cloud if they wish to download and save the update in their internal document management system.
Software
There are software solutions in the market, like Visible VC, that allow you to automate aspects of investor reporting, allowing you to create and send regular investor reports that appear in the body of an email.
Cloud-based Collaboration Tools
Some companies use Notion or other collaboration tools to create their investor updates, creating an Investor Update dashboard. This looks nice but can present challenges when it comes to investors having to take an extra step to view and save the update in their internal document management system.
What should be included in an investor update?
Typically, we see the following insights provided in an investor update:
Refresher on what you do
KPIs (Contextualize the KPIs against targets (on track or off track). This demonstrates transparency, builds trust, and points to where you need help. Mantra of ‘no surprises’)
Traction + Customer Acquisition Metrics
Explicit Asks
Product Update
Highlights
Lowlights
Thank Yous (optional, but highly recommended)
Include photos, videos, or quotes that bring the update to life (throughout)
For a more comprehensive view of what should be included in an investor update, reference our Portfolio Company Investor Update Template.
Additional resources
Here are other resources and benchmarks with guidance around sending effective investor updates: