Investor updates delivered at a consistent cadence are critical in developing confidence among founders, investors, advisors, and those closely involved in the success of an emerging startup.
As a founder, learning how to properly leverage your network through coherent and succinct investor updates will give you and your team a lasting competitive advantage as you scale.
Despite the importance of investor updates, most founders don’t fully take advantage of them as a vehicle for communication, accountability, and growth. In this piece, we’ll dive into our three key components of a compelling investor update: highlights, KPIs, and asks.
A strong investor update always opens with the highlights, whether that be your latest product launch, press release, new hire, or key board member signing on. Starting off on a high note not only relays the success of your hard work but underscores the positive attitude of your team.
Sample highlights include a team member (ex: hiring a head of sales or direction of engineering with links to their bios) or growth spotlight (ex: daily or monthly active users increased by 30%).
Once you’ve set the tone with the highlights, making sure to include relevant social links to new personnel profiles or media appearances, move quickly onto the more quantitative portion of the investor update: KPIs.
Including a key performance indicator section on your investor update is critical. KPIs are how you properly measure the overall health of a business and project out its potential for growth.
Key performance indicators, or “north star metrics”, vary widely by your business model. Critically, these KPIs should remain industry specific depending on your niche vertical.
For example, a two-sided marketplace may choose to disclose GMV and average contract value, while a fintech company opts for new user growth and cohort retention.
If you’re operating a media platform, you’ll likely decide to focus on DAU and MAU metrics. Or, if you’re scaling a subscription-based consumer product, you’ll share cohort retention and churn.
While the prior highlights section and following asks section may both skew more qualitative, your KPI portion should be heavily quantitative, based solely on hard data and metrics.
In How to Leverage Your Angel’s Network, we reiterate the importance of accountability in setting goals with your investors. Angels in particular, when properly leveraged, can significantly augment internal hiring processes, product development roadmaps, or future capital raises.
However, to fulfill that value, it’s critical that you sit down with the investor and align yourselves around what is needed, why it is important, and what ideas they have. By driving this early alignment with your investors, you can significantly accelerate distinct parts of your business.
The “Asks” portion of your investor update maintains that accountability and alignment by staying consistently top of mind. In a perfect world, your investors might predict your problems and immediately email or text you with solutions.
While this almost never happens in the real world, a strong investor will take the time to move the needle for you. However, you first need to ask for help as specifically as possible.
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