How to Write a Great Investor Update

Commonly, founders initially fund their startups by bootstrapping – that is, from their own pockets or funding from friends and family.  But as they grow, their need for capital grows, too.  This is where startup founders start courting seed investors, and later, Series A and Series B.

If you have investors – or plan to court them – it’s imperative to build credibility and trust by sharing timely, relevant, and clear investor updates.  And while called an investor update, the audience is typically broader, including prospective investors and what we call “connectors” – people who may not invest but can connect you to others who can and want to help champion your growth. 

Many of our client founders struggle with writing clear, compelling investor updates.  With our simple, streamlined process, we demystify the process and empower founders to know exactly what to highlight, and how. 

In this article, we share: 

  • What are investor updates and why they matter 
  • How to craft your own to court and cultivate investors 
  • How investor updates help you have better, more effective board meetings 

No matter where you are on your founder journey, you’ll be sure to find this information useful for your startup.

Investor Updates – What They Are & Why They Matter  

Investor updates are clear, compelling, and timely updates for the people who have given you startup capital, might be interested in investing, or can help connect you with potential investors and opportunities. 

We advise founders to choose 4-5 topics and report out on those same topics every time. This practice will help your investors to quickly digest the information you send them, which they will appreciate. 

Typically, investor updates include five sections: 

    1. Highlights from the last update 
    2. Financials and key performance indicators (KPIs) 
    3. Customer wins and pipeline updates 
    4. Key hires 
    5. Asks

These updates are most often sent by email, and may also point to a shareable cloud-based folder like Google Drive or Dropbox.  We suggest a monthly cadence.

Sharing investor updates helps you: 

  • Build trust and credibility with current or potential investors and connectors.  By committing to regular updates, you are essentially nurturing a relationship with this audience who both needs and wants to understand your company’s growth and trajectory.  It also gives them a chance to ask questions and get answers, enabling you to address any concerns or issues on a timely basis.
  • Ask for – and get – help. Your investor updates go to a curated audience who, in addition to providing access to capital – can help connect you to prospects, resources, and potential key hires. 
  • Gain insights and reflection. As a leader, you can reflect on the progress you’ve made and make better-informed decisions for the future.

How to Craft Your Investor Updates  

At AirCFO, we help our founder clients create two tools for their updates: the written update and the financial executive summary, supporting the written points.  

The Written Update 

Here is an example of the type of update we suggest founders create: 

Highlights / Overview 

  • This month, we continued to develop our pipeline and are currently in the process of closing out those deliverables
  • For renewals, we secured a 5-month expansion on our current terms with (company name)

Q2 Key Metrics 

  • Net New ACV: $98.8k (company name) 
  • Retained: (company x, company y, company z) 
  • Churned: None.  Company x expected to churn in September 
  • ARR @ 8/31/20: $3.52M 
  • Cash Burn @ 8/31/20:  -$281k (vs -268k budgeted) 
  • Q3 total burn projection: -$853k 
  • Current runway: 6/2021 

Key Wins – September

  • Presented at (conference name) 
  • Honored as a Transformative Technology by the (organization name) 
  • Chosen as a finalist and pitched at (organization name) 

Key Hires 

  • Onboarded Susan Smith as Head of Sales 

Asks 
In November, we’re headed to (conference name).  We are looking for introductions to key decision makers in the following attending companies: 

  • Company x
  • Company y 
  • Company z 

As you can see, it’s essentially a one-pager that is easy to understand.  Both good and less positive news is reported, but an update like this makes it very simple for an investor to feel like they understand what is going on, and importantly, if they can be helpful in some way. 

Many of our clients also like using a simple dashboard to update investors, raise capital, and track metrics from a single platform.

For this, we recommend using Visible.

Here’s an example of a customized template we’ve built using this powerful tool.

The Financial Executive Summary 

At airCFO, we offer financial guidance to help you make better decisions and craft compelling pitches and investor updates.  Depending on the founder and stage, we can help you build and manage your own model, or set and train you on how to use specialized software that creates investor dashboards and manage your investor contacts in a simple, streamlined way. 

Here is an example: 

The model is fully customizable and provides a quick, easy to read view into the health of the business.

Use Investor Updates for Better Board Meetings 

Whether you meet with your board or advisors monthly or quarterly, regular investor updates leads to investors feeling better informed and more included as key team members.  
We recommend the following: 

  • Time your investor updates so they arrive at least one week before board/advisor meetings.  Simple, straightforward, and timely communication will go a long way in ensuring that nothing catches your board or advisors by surprise. Ensure you are sending out any pre-meeting materials with enough time for the board to review. We suggest 3-7 days in advance, which lets board members review and have a chance to reflect before the meeting. Less time than that will likely mean you are getting less thought and reflection at the meeting. 
  • Set a consistent cadence for board/advisor meetings. Whether it be once a quarter, or every 2 months, it is important to have board meetings scheduled ahead of time. However, if the company is facing a difficult time or several pivotal decisions, don’t be afraid to ask for interim meetings if required. 
  • Establish a consistent meeting flow. Things will naturally change as you scale, but in your preparation materials, include a schedule and do your best to stick to it. In your schedule, include some buffer time should some items run long. You don’t need to map each minute, but you should have clear blocks of time set aside. 

By following these simple steps, you are signaling respect and consideration for your investor community. 

So now you know what investor updates are, why they matter, and how to craft your own.  And you can also see how these important updates can be used to create better board meetings, establishing you as a clear communicator and effective leader.  

Need help? Let’s talk.

airCFO builds best-in-class finance & accounting teams to enable your company to grow from startup to scaleup. 

Schedule your free 20-minute consult today.

Need help? Let’s talk.

airCFO builds best-in-class finance & accounting teams to enable your company to grow from startup to scaleup.
Schedule your free 20-minute consult today.