It’s never too soon for founders to start regularly publishing a brief update to your stakeholder community (i.e., investor updates). As a venture investor, I have found a direct correlation between my top-performing companies and those founders who regularly update us on their ups and downs.
Here’s a quick primer on why to start, who to share investor updates with and a template to get you started today.
Why Start Today
Sending regular investor updates will help you attract the top talent you need for the long and arduous journey ahead.
Attracting and retaining top talent is table stakes for any startup. This does not just apply to the people you need to hire.
It applies to everyone that you are going to surround yourself with who can help you along your journey, such as informal and formal advisors and mentors, and investors.
Top-performing people are scarce, in high demand and have choices. They will choose to spend their time (and capital) on you, in part, because you are organized and responsible.
It’s not enough to say that you are organized and responsible. Your stakeholders will interpret every signal you send and make that determination for themselves.
Collectively, the signals you send become your brand. Everything communicates.
By sending regular investor updates, you are communicating that you take your time and other people’s time seriously, that you will respect their time and you will use it valuably.
A through Z (not A through N)
Before founding my first company and, ultimately, GrowthX, I spent the early part of my career as a corporate lawyer. That meant dozens of hours negotiating a complex deal followed by at least as many hours memorializing the details in a legal contract.
At first, it was hard to see my clients and the investment bankers go out for a fancy dinner while I was stuck back in my office drafting agreements.
After a while, though, I realized that by reducing everything in my head (i.e, soft copy) to paper (i.e., hard copy), I was building mental muscles that enabled me to think more thoroughly and clearly than everyone else.
Regular and written investor updates force you to organize your thoughts and think through things more thoroughly.
Where everyone else sees a period, you’ll see a comma.
These new mental muscles will help you build more realistic and defensible strategies, and execute more efficiently and effectively (preserving valuable runway).
Help People Help You
The best advisors, mentors and investors are attracted, first, by their ability to be helpful. At GrowthX, helpfulness is the bedrock of our investment due diligence process.
We evaluate investment opportunities through the lens of whether and how helpful we can be in helping you through your go-to-market challenges. That’s our expertise and it signals whether or not our fund is a good fit.
Regular investor updates are an excellent way to empower time-starved stakeholders to be as helpful as possible by asking for the specific help you need now.
In addition to including an “Ask” section in your investor updates, your regular communication also helps your community spot areas where they can be helpful in ways you might not have known they are capable (e.g., specific knowledge and experience or useful relationships).
In his book “Outliers,” Malcolm Gladwell popularized what has become known as the 10,000 hour rule. That is, it takes 10,000 hours of practice to achieve mastery. This is absolutely true when it comes to your regular investor updates.
The earlier you start, the more it will become a habit that is harder to break when you’re busier and you have more stakeholders.
You’ll also be a master communicator by the time the stakes are higher (when you’re also preparing for and running board meetings).
Not only will you be better, you will also have given yourself the opportunity to discover and develop your personal communication brand. It’s not only about what you communicate; it’s also about the tone, tenor and style of your investor updates.
Who to Include
As the name suggests, investor updates are most often associated with helping you raise capital and keeping your investors current on your progress. But, investors are only one of your stakeholders.
The benefits begin for you and extend to other stakeholders, too, including your team, and informal and formal advisors and mentors.
At the earliest stages of your company, you will likely be able to send one update to your entire stakeholder community.
However, as you gain traction and early investors, you might have one version that you use exclusively as your investor update. Your investor update might include financially sensitive and confidential information that your wider update might omit.
A Template to Start Today
I work closely with GrowthX portfolio companies and 100s of other founders from around the world helping them send effective investor updates.
Here’s an investor update template to start sending regular investor updates (and wider stakeholder communications) today: