#38 Angelinvesting.it - From idea to Series A - Weekly Newsletter

Investor updates ultimate guide!

Oct 07, 2023

How annoying it is to receive mediocre investor updates. I'm writing this guide for myself, hoping it goes viral and improves the quality of investor updates in my inbox. Here are all the secrets to being top of the class.

Why Write Investor Updates

The most underrated tool, especially by first-time founders, is the investor update. This is a regular email (ideally monthly) that the CEO sends to stakeholders including current investors, employees, potential investors, and, why not, potential partners or hires.

Diligently producing and sending the investor update every month yields numerous benefits. Firstly, for the founder, writing the update helps put thoughts into writing and rationalize ideas, explaining and understanding where the project stands and its potential direction.

It helps the team be on the same page and provides investors with a sense of direction. It is also crucial for keeping prospective investors engaged, perhaps those considering the next round or those who previously said no (not too definitively). A single email reaches dozens or hundreds of people; the leverage effect is clear.

How to Build a Contact Database

Founders who understand the importance of investor updates diligently collect emails. They usually do this during pitch meetings or when meeting new people.

At the end of a meeting, they elegantly ask something like: "Would you mind if I add you to our investor mailing list for weekly updates? You can unsubscribe at any time if you're not interested." A positive response, which is common, lays the foundation for building a relationship with a potential partner, employee, or investor.

Some are more aggressive and add you to the newsletter without asking. I'm not entirely convinced by this approach, but I don't entirely condemn it either. If you didn’t use to ask in the past, for the first investor update, send it to a few more; at worst, many will unsubscribe.

The Most Important Thing

When writing an update, clarity and conciseness are crucial. Startups are playing a kind of video game where they need to achieve certain results to level up. A good investor update succinctly explains the startup's current focus and how its results have evolved since the last update.

We investors don't know whether the startup will succeed or fail, and neither do the founders. However, we observe and understand how focused a founder is and how well they comprehend and control growth drivers. Ultimately, for a founder, the investor update is a golden opportunity to build trust around the startup's leadership.

Practical Tips

In the title, write the essentials: <Startup Name> - Month Year - Investors Update
Send the email from your regular email address; nothing exotic. Mailchimp or similar is fine. Don’t waste time making this sophisticated. Your obsession should be product-market fit, not tools.
Send the email at the same time and day consistently. Beginning, middle, or end of the month – your choice, but send it punctually. It signals discipline.
Start by giving recipients the option to unsubscribe. There's no benefit to spamming someone who doesn't want your update.
Before sharing monthly results, remind recipients of your startup’s goal and vision in one sentence. Many investors get dozens of investor updates and may forget about a project.
There are various formats for the update's body. I like 3-4 headings like: (Wins of the Month, Challenges and Lessons Learned, Month in Numbers). I will provide you with alternatives. Choose the structure that works best for you.
On wins
- Don’t oversell; mention only contracted things. You don't want to explain later why something you announced didn’t happen.
- Talk about real wins, significant contracts, metrics that meet or exceed the budget, and customer recognitions.
- If there aren’t many wins, admit it. We all have tough months.
Challenges and Lessons Learned
- As a general rule, transparency and authenticity pay off.
- Don't overly complain. I once heard, "Laugh, and the world laughs with you; weep, and you weep alone."
- Emphasize the insights you’ve gained; I always read those with particular interest.
Month in Numbers
- Share a few relevant numbers. MRR, closed deals, monthly burn, remaining cash.
- With these numbers, let me understand where you are and, importantly, where you are relative to where you wanted to be.
End with specific requests to recipients. Tell them in detail what you need and why.
Before saying goodbye, as a wrap-up:
- thank them for their time;
- remind them they can unsubscribe and provide the link;
- share your scheduling link (Calendly or similar) if they want to set up a meeting;
- provide a link to a page (Notion or similar) where you've orderly listed all previous updates organised by date.

2 Resources to pro

Check this Notion template, it is pre-cooked for you. Rememebr to udpate it with your info :) Link

A single link with several template examples. Link

1 Reason to be happy

I keep enjoying posting Google Translator memes on Linkedin. This week is the translation between VC Term Sheet and English. You can follow me on Linkedin here