Investor updates are a critical part of a startup’s communication strategy. They offer a platform for founders to highlight key milestones and achievements, explain why certain metrics have moved or not (and how they plan to move them), and ask investors to help them solve specific business challenges. They’re also an opportunity for entrepreneurs to reflect on the past month and set some accountability goals for the future.
The structure of investor updates can vary widely depending on the size and stage of the company. However, most updates tend to include the same core sections: overview, performance, economics, and needs. The overview should be a short paragraph that paints a picture of the business’ health – i.e., whether it is growing, flat, or needs to raise capital. This section should also clearly articulate any underlying issues, like lost deals or an unplanned expense.
Once this information is laid out, it’s important to provide a clear breakdown of the economics of the business. This should include the company’s revenue and profitability as well as any outstanding debt. Investors should also be able to see the runway remaining until the company will need to raise a new round of capital.
Finally, the need for investors to help should be outlined in this section. Depending on the type of assistance needed, this could be as simple as a request for an introduction to someone or a specific piece of business development research. It’s generally in the best interests of your investors to see their investments succeed, so they will be more than happy to lend a hand when the time comes.