10 tips for writing a monthly investor update (and why you should)
As a startup, you’re competing with other startups for investors' money — just like you’re competing with others for your customers’ share of wallet.
And like your customers, your investors need to be nurtured. Sending a monthly investor update is a great way to build trust and keep you front of mind.
In fact, according to one VC founder, if you send a monthly update, you’re 50% more likely to retain the support of your existing investors. Why wouldn’t you?
Here are our 10 tips for making your next investor update stand out.
1. Don’t leave it till you need more capital
If an investor has a choice between a portfolio company that’s kept in touch and one that’s not, the former will have the edge. If you only communicate when you need a cash injection, you're likely to lose out to the business that has spent time nurturing the relationship.
2. Be consistent with timings
Don’t skip an update because you’re too busy or (worse) you don’t want to share bad news — that lack of consistency will erode trust (especially if the investor begins to suspect you only share when things are going great.
3. Be consistent with your metrics
When it comes to your metrics, share the same ones each month, measured in the same way (even if they don’t look great). Again, that consistency and transparency will be key to maintaining that investor’s trust.
4. Don’t just data dump
Yes, that investor will be looking to see how your business is stacking up against its KPIs. But numbers aren’t the be-all-and-end-all. So as well as your financials, share your recent wins (and losses), product development, team updates and customer stories.
5. Add a splash of personality
People invest in people — so don’t be afraid to inject a bit of personality into your investor update. Use the update to paint a picture of who you are, how you think, and where your business is going.
6. Get the tone right
Don’t try to sound too salesy. You want to come across as transparent, not unrealistically upbeat (or, worse, like you’re burying bad news). So present your facts and figures as impartially as you can. And when it comes to the words, avoid jargon. Keep your language clear and friendly.
7. Start with the good news, but share the bad news
Leading with the month’s successes will set a positive tone for your update. But to build trust with your investors, don’t shy away from sharing things you're finding more challenging or where you’ve not met your goals. Do, though, be sure to talk about what you’ve learned and explain how you now plan to fix any problems.
8. Ask for help
An injection of capital isn’t the only value an investor can provide. They tend to be smart and well-connected, so take the opportunity to tap into both their networks and expertise. For example, use your investor newsletter to ask for introductions to potential customers, hires or other investors.
9. Keep it short and simple
Investors are busy people, so don’t overwhelm them with walls of text and irrelevant information. Keep your update concise and consider including a TL;DR (“too long, didn’t read”) at the top - in other words, a short, bullet point list of highlights from the rest of the newsletter.
10. Use the same format every month
Having the same format every time will stop you having to reinvent the wheel every month. But it will also encourage you to be as transparent as possible in your update — for example, by prompting you to include what’s been a challenge this month. Here’s a suggested structure:
TL;DR
Metrics
Wins
Challenges
Help!
Need help creating an investor update? Get in touch!
