Hi, everyone. This is Alejandro Cremades, and today we’re going to be talking about
how to write a powerful investor update. Here’s the thing; when you close your round of financing,
at the end of the day, that is just a stepping stone. It’s not a milestone. Now is when
the real work happens. Today we’re going to be covering how you’re going to be keeping
up to date those investors that essentially are betting on you. So, with that in mind,
let’s get into it. When it comes to really writing an investor
update, what you want to make sure is that you understand the why, the what, and the
when. The why ultimately, really what it is, is why you’re doing this. The reason why
you’re sending an investor update is because you want to keep all your investors up to
date as to how you’re doing. Because, here’s the thing; every 18-25 months, you’re most
likely going to require more money for your business, so the last thing that you want
is to keep your investors in the dark because, essentially, they’re being part of the journey.
If you have them helping on building the business, it’s probably going to come from them. Like,
“Hey, do you need more money? I’m happy to give it to you.” Rather, they have not
heard from you in 18 months, and then all of a sudden, you’re knocking on the door,
and they’re like, “Well, I don’t know what’s going on.” You’re going to get
them completely off-guard. So, with that being said, the why and the
reason of you keeping them up to speed is so that they really are ready to jump in whenever
you need them. The when: literally, you’re going to be
sending them, at the end of the day, one update, maybe like either on a monthly basis or perhaps
on a quarterly basis. It really depends on the stage of your business. So, the earlier
that you are in the life cycle of the business, the more updates and the more frequent those
updates are going to be. The later that you are in the stage, perhaps like growth stage
or whatever that is, you’re going to be probably sending those on a quarterly basis.
In terms of the what, really, it’s a summary of what the business is doing and what accomplishments
you’ve done. But with that being said, we can actually go more in detail in a little
bit. In terms of what to send, you’re going to
be sending them a summary of the most recent period, and I think that you’re going to
want to do this in a way in which they can benchmark with how you performed in the past
so that they can see what progress has been done maybe this month compared to last month.
Or maybe this quarter compared to the last quarter in terms of your key metrics of the
business because this is going to really give them an idea on what kind of progress has
been done. So, you really want to benchmark those so that they have an idea. Otherwise,
it’s just going to be metrics of this month. “Okay, good numbers, but I have no idea
as to how you’ve been progressing.” Another thing that you want to include is
product launches. For example, if you’ve recently launched a product, a feature, or
something like that, maybe you want to talk to them about what exactly you launched. What
was the performance? How did your customers receive it? What you’ve learned from it?
So, this is something that perhaps you want to include.
Another thing that you want to include as part of the investor update is the key hires
that you’ve done. Here, maybe you want to send them a picture or a headshot of that
new hire. You can also send a bio of that new hire so that they get an idea.
Then, the title, and what exactly that key hire is going to be doing for your business.
I think that at the end of the day, this is going to help them understand that you’re
executing well, that you’re good at really attracting talent, and this is something that
they’re going to want to see. The next thing that you want to talk about
is milestones achieved. Let’s face it. At the end of the day, what is going to get you
closer to the next financing cycle is going to be the milestones that you’re achieving
over the course of time. So, for that reason, maybe one way that you
want to go about this is at the end of every newsletter or every update you send the potential
new milestones that you’re looking at accomplishing for the next month or the next quarter.
And when you get to that update on the next quarter, that’s when you say either you
accomplished that milestone or you didn’t. Obviously, the more that you accomplished,
the better you’re going to look, and the better and the happier they’re going to
be. But, at the end of the day, I think that you’ve
got to be transparent, and you’ve got to be clear about the milestones that you’re
setting yourself up to accomplish, and then how you are doing in the process of doing
so or not in terms of accomplishing. You want to ask for help. Remember, investors
at an early stage, especially, they like to invest so that they can be helpful, so they
can really jump in and help you with whatever is needed. So, you need to ask your investors
– you need to ask them for help. What can they help you with? Is it maybe like
introductions to more investors? Is it introductions to key hires? Is it introductions for distribution?
You need to ask and believe me. They’re going to love that you ask, and they’re
going to be involved because this is the type of investors that you want investing in your
business. Then, you want to talk about runway. How much
cash is left in the bank? How many months do you have left to execute? The runway, at
the end of the day, is how much do you have left in terms of – runway alludes to airplanes,
to being able to take off. What runway means is how much do you have
left in order to take off, in order to have your business take off? At the end of the
day, it really comes down to how much cash do you have left in your bank account? And
how many months does that give you to continue executing at your current speed? That’s
something that you want to convey with investors so that perhaps it’s going to come from
them, “Hey, let me give you some more money so that you can continue to extend your runway.”
The last thing you want to share: any press, any mentions, anything that’s exciting that
has happened in your industry. This is something that you want to share there, so that they
have an idea of what everyone is saying, of what the market is doing, and then you bring
them up to speed and some articles that they can read.
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