Investor updates are an important part of maintaining transparency and trust with investors, ensuring they have the information they need to make informed investment decisions. They are also an effective way to keep investors engaged in the company, giving them a chance to use their experience, networks, and resources to support the business as it scales.
Investors want to see how the company is progressing, including financial performance (including cash runway and burn rate), team changes, and customer wins. They also want to know whether the company is hitting its core metrics, such as daily active users or monthly recurring revenue.
The best investor updates are clear, concise, and navigable, with a structure that makes it easy for investors to understand what the company is aiming for. To create a consistent format, it is helpful to develop a standard list of sections, including key metrics and milestones, as well as what’s been going right or wrong. It is also helpful to stick with the same metrics month after month to build trust in your reporting.
It is also useful to include a brief self-evaluation at the end of an investor update, which can be as simple as a one sentence overview and 1-5 assessments on each category. A common mistake is trying to only highlight the good, while forgetting that there are some months where it is not as great as others. This is why it is important to be open and honest in these self-evaluations, as well as to share the lowlights so that investors can help support through tough times.
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