An investor update is a regular communication from a startup to its investors, typically highlighting financial performance, team changes, and customer wins. It allows the company to maintain transparency with its investors, and better position itself for future fundraising rounds and potential referred business.
For early-stage companies, investor updates are often emailed once a month or quarterly to all of the company’s investors. Regardless of the frequency, all updates should be consistent and follow the same format. Investors want to know what’s working and what’s not, as well as how they can help.
The best way to do this is by including a “highlights” and “lowlights” section in each update. Highlights can include key metrics, like growth or daily active users, or marketing and sales achievements, like new logos or a positive NPS score. Lowlights can include challenges that the company is facing, or mistakes or missteps. Investors want to know these things, but they don’t want to be blindsided by them.
In addition to the highlights and lowlights, it’s important for founders to use their investor update as a chance to ask for help. Investors are not just passive capital, they’re also an incredible resource for their portfolio companies. Between their own networks, other venture capital firms, and their previous experience with other startups, they can help with any operational or tactical issues that a company may be struggling with. If you have a specific need, an investor can also be a great referrer for talent or business opportunities, or even lead an introduction to a prospective new partner.