Investing in Investor updates

While seed rounds often have 1-2 “lead” investors, participation from many investors at smaller amounts, commonly small seed funds and angel investors, is standard.

Over the past few years, I’ve been a moderately active angel investor. Like most angel investors, I’m usually the smallest check on a cap table and post-investment value-add is admittedly reactive in nature.

Irrespective of check size, one of my major pet peeves as an investor are companies that fail to provide regular investor updates.

Recognizing that larger investors are usually in close contact with their founders, I know that following missive is primarily geared toward the lines of communication with smaller investors (for small seed rounds, this may mean all investors).

Bluntly, it’s not OK to be opaque with the investors who have supported you while risk levels are at their highest. Whether as an active or silent partner, investors want to be part of the journey.

More importantly, I think it’s a huge miss not to provide all of your investors with regular, effective updates. It’s impossible to optimize on your investor base without them.

So what is the appropriate communication etiquette?

1/ All companies should send regular updates to their investors. The frequency is up to you based on what you think is appropriate for the business, but a normal cadence should be set.

2/ These updates should go to all investors, no matter the size of investor, with the following caveats:

-There may be certain sensitive items that are only appropriate to discuss with only significant investors

-As companies mature and scale, only significant investors with information rights should get these updates.

3/ A standard, succinct template should be used for consistency to aid ease of readership. In terms of length, think tweet storm vs. long form blog post.

4/ Updates should include the good, bad, and if appropriate, the ugly. Investors don’t want entrepreneurs that act as spin-doctors. Savvy investors will see past it, a chance to engender trust leaks away.

5/ Should include a clear call to action.

Now most of the updates I get from founders are inherently positive, undeniably a function of the direct correlation of company performance to update frequency. Although it’s easy to shout from the rooftops when life is good, the best operators understand that the most critical investor updates occur when major challenges are present within the business.

Investor updates also have the following benefits:

1/ They can serve as a forcing function for founders to momentarily untangle from the weeds and be introspective. This may inspire an idea around a new opportunity or allow you to identify a problem before it happens.

2/ They provide a forum for founders to clearly define how investors can be helpful. As mentioned earlier, small investors often rely on regular investor updates to determine how to help.

3/ Fostering of trust through transparency.

Here’s an example of an effective investor update. It includes the core elements of good investor update: a summary of progress since the last update, progress on KPI’s, and clear articulation of a call to action.

ABC Company

Investor update, June 2015

Greetings ABC stakeholders – hope you are having a great summer so far.

Below is the summary of developments since last month’s update.

If you’re stretched for time, please note *Time sensitive information and the How you can help section.


June cash burn: $200K

Cash in bank: $950K

*We are in final round of doc discussions with a Series A investor, who would lead a $6MM round of financing. I will share much more information once it is finalized this month.

Progress on KPI’s

Product Development

 Implementing new functionality in response to pilot customer feedback

*Now available on IoS and Android operating systems – as of June 15th.

We had a few bugs that we identified during our pilot around app stability and responsiveness. We have fixed those through our latest version.


As mentioned previously, we began paid betas with over 10 Fortune 500 companies in March.

Our MRR in June was $78K, our highest month to date, and we have converted 6 of the betas to full paying clients. This aligns with our projection of $72K listed in last month’s update.

Although scale has taken longer due to longer than anticipated sales cycles, we are very encouraged by the latest developments.


*[rockstar sales person] has joined our team as VP of sales this month. David was previously head of sales at and led the company to over $100MM In ARR. He will immediately lead channel relationships.

*[product guru] has joined us as head of product management, and will spearhead our product roadmap from conception to implementation, working closely with engineering.

Our team now consists of 7 Full-Time Employees. With the close of our Series A round, we will be looking to add 2 full stack software engineers, along with a UX/Design individual.

July Objectives

Implement additional product functionalities around:

-Team sharing

-Full admin dashboard

-Enhancement of mobile interface design.

Close Series A round

Hire at least 1 Software Engineer

*How you can help

-If you know anyone with the appropriate experience for any of the available roles, we’d appreciate the introduction.

-We are contemplating augmenting the Series A round with Venture Debt. If you know of good providers or have expertise on the subject, please send me a note.

-Our lease in our current location is up in September. We will need to move into a larger space, preferable near SOMA. Our estimate is that we will need 3000 square feet.   Let me know if you can help us source a good location.


CEO, ABC Company.

This is a good update as it provides investors with a clear update on material business matters, is transparent on challenges, and has a clear call to action for all investors. It also lays out expectations for the upcoming month to support accountability.

I’ll give a final impassioned plea to founders – Don’t ignore the importance of investor updates.

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