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How to Write the Perfect Investor Update
To get started with your first investor update now — check out our template library here.
The day-to-day life of a startup founder is tough. Between building a great product, distributing your product, keeping employees happy, etc (the list goes on and one) it can be difficult to make time for investor relationships.
However, when managed correctly those outside investors can often be a valuable resource for founders and startups. Investors provide more than capital. They offer advice, expertise, introductions, and more. It is your duty as a founder to let your investors know what is happening with your business so they can help.
Step into the shoes of your investors and it will help understand the importance of investor updates. Put simply, an investor (venture capitalists) job is to deploy limited partners’ capital by investing in startups, generate excess returns, and pay back their limited partners with the hopes of doing it again. This means that an investors’ success hinges on the success of their portfolio company. Put simply, your investors need you to succeed.
Your investors likely have other investments and can’t be expected to know exactly where to help each company. In a crowded space building strong relationships centered on trust and transparency is an easy way to stand out amongst other startups. By sending regular investor updates you can stay top of mind for your investors and tap into their knowledge, resources, and capital to continue to grow your business.
Below you will find our guide to help you write the perfect investor update by understanding what metrics and data to share, properly asking for help, sharing big wins and losses, and raising additional capital.
Why Send Investor Updates
As we alluded to earlier in our guide there are countless reasons to send investor updates. It is called investor “relations” for a reason. You need to build relationships so you can build trust, transparency, and a long lasting partnership with your investors. Investor Updates should only take a few minutes a month and can have an everlasting impact on your business and future endeavors. Not convinced? Check out why you should send investor updates below:
Communication is key — We believe that regular communication with investors and important stakeholders is key to a startup’s success. If your investors don’t know what’s going on in your business, they don’t know how to help. Building a reporting cadence with your investors is a great way to promote transparency and build a relationship focused on trust.
Follow on Funding — One of the biggest reasons to report to your investors is the increased likelihood of follow on funding. In our own research, we have found that companies that regularly communicate with their investors are twice as likely to raise follow on funding.
Network — Generally speaking, investors network often and have likely have experience as an...
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