Imagine you give a startup $100,000 to help them grow their business. Six months pass, and you haven’t heard from the company. You’d likely feel confused, anxious, or even angry. That’s because you have a vested interest in the success of the company. You want to know how your money is being spent and whether or not it’s helping push the business towards profitability. This is why investor updates are so important.
While investor updates can vary slightly based on the industry, they generally abide by the same principles and cover similar topics. Investors expect to hear about the big wins and losses, key metrics like revenue growth and team updates. They also expect to be kept informed of any challenges the company is facing. This helps build trust and gives the investors peace of mind knowing their money is being used wisely by a well-run company.
Investors who receive regular investor updates are twice as likely to invest in the next round of funding compared to companies that don’t. This is because the investors are more familiar with your company and can make an informed decision about their follow on investment. They also have a deeper relationship with the founder and can more easily recommend the company to their own networks.
The best way to get started with your investor update is to review the previous month and collect key highlights. Ensure that the key metrics you’re tracking remain consistent month to month, so that investors can clearly see your progress over time. Finally, pick a schedule for sending your updates and stick with it.