An investor update is a communication from a startup to investors that shares key business metrics, milestones, and other important company news. They are typically sent on a monthly basis by early-stage startups, while growth and late-stage companies may send them quarterly. Investor updates help build trust and confidence with investors and increase your chances of a successful fundraise.
While writing an investor update is a time-consuming task, there are several best practices you can follow to streamline the process. First, collect the information you need for your update in advance. This can include financial metrics from your accounting software, marketing data from your CRM, and project management data from a database management system. Once you have all the information, it is easier to write and share your investor update.
Generally, the investor update should include four sections: Overview, Performance, Economics, and Needs. The Overview should be two to three short paragraphs that describe the overall health of your company. This is your opportunity to paint a positive picture of the business, and it’s OK to be honest about challenges you are facing.
In the Performance section, highlight any key KPIs that investors care about, such as revenue, churn rate, and net new MRR. It is important to keep in mind that investors will want to see consistent metrics from month to month. For example, if you calculate your revenue numbers using a certain formula, it is important to use the same calculations in every update. Also, note your cash runway and burn rate.
About the Author
