What are investor updates?
"Investor Updates" are a common term used across the startup ecosystem to describe a progress report that is typically written by the CEO and/or founding team of a company to:
- Discuss how the company is performing...
- What has changed since your last update...
- How your KPIs are performing...
- What your company needs help with...
- And a variety of other things...
We will dive into more details around this in a future newsletter.
Why should I write updates?
For veteran entrepreneurs that have been through a few capital raises and exits, writing investor updates is second nature. They probably have a hard time remembering when they didn't write updates. After you raise money from VCs or larger investors, this exercise will become mandatory on a consistent cadence. However, there are various reasons (listed below) on why you should be doing this now instead of waiting until it's mandatory.
- You want to grow your network.
- You need to keep your stakeholders up to speed with what's going on.
- You want to foster relationships with prospective investors.
- You want to build trust with your investors and mentors.
- You need a way to ask for help.
- You want to keep your team and company up to speed with how things are performing.
- You want to send weekly CEO notes internally.
- You want to stand out from the crowd of other entrepreneurs.
- You want to document the progress of your business over time.
Should founders only send "Investor Updates" to their investors?
A common misconception is founders only send "Investor Updates" to their investors.
This couldn't be further from the truth. To remove any confusion, we prefer to call these types of updates "Company Updates." You can also send them to your team members, mentors, prospective partners
Below is an explanation of what you can write about with our standard template. Feel free to start using this, or create your own!
Okay, let’s begin!
Investor update intro
Try to summarize your entire update in the beginning in 3–5 sentences or a couple of short paragraphs. This gives people a high-level overview of what to expect in your update and how your business is progressing.
📢 Shout Outs
- By thanking the people who have helped you they are more likely to help you again. The people who didn’t help you may feel more inclined to lend a hand to also receive a future public acknowledgment of appreciation
- Don’t forget to acknowledge your team members in this section as well!
- Protip: Founders often use “@full name (bold)” to publicly acknowledge their help
- In this section we often see founders write 2–3 things that went well since their last update
- It’s a great section to share your biggest wins and things you’re proud of that you and your team have accomplished
- Discuss strategic changes in your business
- Has your business model changed?
- What’s your go-to-market strategy?
- Talk about your beachhead market and why it makes sense to attack
- Discuss business development and partnership opportunities
- This is a section a lot of founders write too much about. You are probably 100x more knowledgeable than your investors and advisors about this
- The goal of this section is to make sure your advisors/investors can sell your product and see how things are progressing
- This is also a great section to talk about your roadmap updates
- Discuss any big announcement, events, travel, etc. you’d like to share here
- Share your financials
- You don’t have to send these financials to everyone, but try to share your basic financials in charts
- Take a screenshot or upload images taken from your business intelligence dashboards
- Cash-on-hand vs Burn
- Pro-tip: Use charts and graphs to display progress
- Plot your metrics over time and be consistent with every update!
- Try to find your “Northstar Metric”…the one metric that drives your entire business
- Example: Facebook found that new users who added 7 friends in 7 days had a much higher likelihood of converting to longterm Facebook users. Once they found this metric it became the key metric they focused on to grow and scale Facebook to the dominating player it is today
- Explain each metric in every update so people can easily reference and understand them. Remember people receiving your updates often get a lot of them and they’re not always going to remember what they’re looking at
- Did things go well? Talk about why. Didn’t go well? Explain
- Pro tip: Use screenshots from metrics/business intelligence dashboards in your update and colored text to make your numbers pop
- Write about how people can help you and be as explicit as possible to make it easy for people to help you. If you need intros, write to whom or to what kind of companies and roles. Be specific!
- Pro tip: Include a blurb or forwardable intro about your company that can be copy and pasted to send intro requests
- Remember: Make it easy to help you! People want to be needed. Don’t hesitate to ask for help, that is why these people are here
Other sections you may want to include
- 🏌️♂️ Sales
- 📨 Marketing
- 💼 Hiring
- 👤 User Acquisition
Who should I send my updates to?
Unless you live in complete solidarity, you probably have plenty of people to send your company update to, so no excuses!
One of the most important things you will need to excel at while building a business is networking, and one of the best ways to grow and engage your network is to update them. When sharing your company update with your network, it's one of the only times just about anyone will be happy to let you add them to a mailing list, so make it count! People want to hear about your journey, and many of them want to help when they can.
Updating the state of your business allows you to take the time to have a 50k foot view of how your company is performing and how you can get better.
When you share your high-level view of those wins, challenges, and strategic changes, you allow other people to understand where you're at in the process and allow them to engage and help. Over time you begin to build stronger and lasting relationships with those people. Whether it's this company or the next, the steps you can start making now will have a lasting impact on your entrepreneurial career.
Our platform is centered around updating, and we've seen founders send their company updates to a variety of people. Remember that building a company is a challenging journey, and you never know who might be able to help you along the way. Which is why we see the most accomplished founders send consistent updates to nearly their entire network; here are some examples of the types of people we've seen founders send company updates to:
- Friends and Family
- Prospective Investors
- Prospective Customers
- Fellow entrepreneurs
- Mentors / Advisors
- Prospective Partners
- Board Members
- The list goes on...
Our goal at Paperstreet is to help you excel at this. We want to make it simple to allow you to share the state of your business as easily as possible, help you analyze engagement, and, most importantly, grow your network with the right people
- Add a closing statement and thank those who made it to the end for their support
- You can also remind people that you’ve added them to your updates because they’ve expressed interest in your company. If they would no longer like to receive your updates let them know they can unsubscribe with the link included in the email
You now have all the tools and the context on how to write a great update, so good luck and get writing!
Please feel free to contact me directly if you have any questions at email@example.com and if you know another founder that might benefit from using our platform feel free to forward this email to them, and they can join our waiting list by filling out this form here.