You did it!
You closed a big funding round! Time to pop the champagne!
But you still have one little problem: what are these pesky investor updates?
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If there’s one thing that really confuses founders I meet, it’s investor updates. Many big investors require regular updates as part of a funding round.
Meanwhile, founder after founder has no idea what’s expected of them.
Updates can and should be simple. This is what I want to see:
- Revenue
- Burn
- Cash in Bank
- Runway
- Highlights
- Lowlights
- Next month’s plan
- Asks for investors
Here’s an example update I wrote. It’s for my favorite startup, Uber (yes, even now).
The information is completely fictional, but here’s how it should look:
Uber – June 2022 Investor Update
Hello,
June was a great month for Uber! We saw significant growth across markets:
Burn: $75,000/month
Cash in Bank: $1,082,453
Runway: 14 months
Highlights:
- Major growth in new New York City market brought us our highest monthly revenue ever
- Hired 2 new engineers to build out user profile function
- Reduced CAC from $45 to $35
Lowlights:
- Cease and desist order in Austin, Texas. We are appealing.
- Departure of a strong front-end engineer
Next month’s plan:
- Expand to New Jersey
- Hire 2 more front-end engineers
Asks:
- Intros to strong front-end engineers with experience in Python
- Lobbyists with connections to taxi boards in major cities
Thank you,
Travis Kalanick
Many founders update their investors only rarely, if at all. And when they do, there’s way too much information!
This update gives investors all the key data points about your startup. But it doesn’t take tons of time to write or to read.
So what can updates do for you, as a founder?
Updates get your existing investors excited about your progress. This makes us eager to invest more even before you ask! 💰
You also get to put those moneybags to work for you! Your investors have tons of connections and expertise just waiting to be harvested.
Go with monthly updates, or at least quarterly. If we only hear from you quarterly or even less, that’s fewer opportunities for us to help in a timely fashion.
Even if the terms of your financing don’t require any updates, send them anyway! You want your investors engaged, excited, and helping you.
Finally, investor updates are a good idea even for companies with no investors! Call it a “Company Update” and make sure every potential investor you meet gets it in their inbox like clockwork.
Once they see your diligence and your company’s progress, they’ll be breaking down your door to invest.
What questions do you have about investor updates? Leave a comment at the bottom and let me know!
More on tech:
Talking Startups and Today’s Fundraising Pullback
Are You a Venture Scale Business?
Talking About Today’s Startup Market on The Accelerator Podcast
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