How to Write an Investor Update (With Example)
Managing your investor relationships is a critical part of running a business. After completing your fundraise, begin regular communications with investors to build a long-term relationship with those who believed and invested in you. This article describes the reasons to send investor updates, their components, and an example investor update (below):
Why Send Investor Updates?
Keep your investors regularly updated to build trust, allowing you to lean on them for resources as you scale.
- Trust — Builds connectivity with your investors so they can support you in good times, and help you during bad periods. Plus, investors do *not* like surprises, thus, regular updates reduce that risk.
- More Capital — Prompts your investors to offer you more capital and intros to more potential investors, as a result of sharing updates with them on growth or difficult situations.
- Marketing and Proof of Proficiency — Demonstrates your business’s success and leadership, giving your investors talking points to speak highly of you. Investors can then promote you with more potential investors through their personal networks, amplifying your growth.
- Business Introductions — Gives investors information to help introduce you to prospective clients and/or vendors, this is especially valuable when you’re expanding, pivoting strategy, or in financial trouble.
- Recruiting — Allows investors to help you close candidates, or suggest and refer top-tier talent to you.
- Goal Tracking — Captures quantitative and qualitative data in each period. This record holds your team accountable, logs your metrics, and motivates you for future goals.
- FAQs Preparation — Grooms you to answer tough investor questions, especially if they arise on phone calls or in-person meetings later.
Guidelines for Investor Updates
Set a standard frequency and format for your investor updates. Consistency improves the reader’s interest level.
- Frequency — Send updates monthly/quarterly and annually (e.g., monthly + annually for businesses less than $3M/yr sales; quarterly + annually for businesses more than $3M/yr sales).
- Length — Keep updates brief, to hold the audience’s attention and to make the task of writing one simpler (e.g., aim for 250–750 words for monthly/quarterly; and up to 1500 words for annual, if needed)
- Prep — Draft the update ~1–2 weeks in advance, to avoid missing a scheduled communication and to stay consistent. Work closely with your team to ensure you have financial and product metrics ready ahead of time.
- Format — Use a simple email format, for ease of readability. Most investors will not click or view an attachment, which reduces your readership.
- Transparency and Tone — Be honest about your wins and losses alike, knowing that investors may respond with difficult questions.
- Archiving — Save your investor updates. Use your prior period’s update as a template to create a new one, which is much easier than starting from scratch.
Components of Investor Updates
Give your investors a snapshot of the last period, plus any changes you need to make for your future strategy.
- Highlights of Last Period — Start with a few sentences about any significant changes to the business or fundraising since the last communication.
- Performance, Revenue, and Growth — Give key metrics of revenue and growth, plus why they are performing as such based on your business structure.
- Requests for Help — Ask for help. Remember, your investors want you to succeed, but they need specific requests from you to be effective.
- Sales and Marketing — Report any changes to your sales pipeline, plus number of clients reached and closed. Mention any developments in your marketing, branding, and PR initiatives.
- Operations — Describe any significant cost cutting measures you’ve taken. Be sure to call attention to any HR matters that may expose your business and investors to lawsuits.
- Strategy and Milestones — Share milestones you’ve hit and those pending. In addition, state if you are continuing with the original strategy pitched to investors or if there will be adjustments.
- Upcoming Fundraises — Mention if you’ll be fundraising soon (equity or debt). This helps you identify investors interested in giving more capital or getting introductions to potential investors.
- Good News, Releases, Press, Investor Spotlights — Include positive press, client testimonials, recent news, and important hires. Plus, spotlight investors who’ve been helpful to show your appreciation. Include a schedule of upcoming engagements, for example team events, where your investors can attend, if applicable.
Investor Update Example
Hello All,
Please see the Q4 update for ACMEco below.
Highlights: In Q4 we won two new clients, Costco and Walmart — projecting $100K in sales by year end. We continue to focus on regaining business stability, challenged by minimum wage hikes and the closure of our Los Angeles operations.
Performance: Revenue grew in Q4 versus Q3 by 42%, with quarterly gross sales of $500K from $350K; large events were a big contributor during the holiday months. This brings annual gross sales to $1.5M, and we expect to outperform competitors 2x next quarter with 55% growth.
Requests: As always, please send along any leads or referrals of clients looking for private events. Media intros also welcomed, in particular we’d appreciate an intro to Forbes if you have one. Thank you.
Sales & Marketing: On November 15th, we launched our partner program with finance companies like Goldman Sachs, which is currently working — bringing in 1.5x additional foot traffic at test locations.
Operations: We are in the process of renegotiating our vendor contract with Square, projecting a $2K/month savings if successful.
Strategy: With our Los Angeles operations winding down, we plan to push on expansion through Northern California in the next quarter.
Upcoming Schedule: We will begin raising our Series C round of $50M next month.
News: We were recently featured in the SF Chronicle [insert link], and excited to see clients like Google interested in our offerings. Here’s a customer quote from the article: “ACMEco has the best quality products I’ve seen in decades.” — Google Executive
If you have questions or feedback, please do not hesitate to contact me.
Thank you,
[Managing Partner/CEO/Founder]
Sending updates to investors is a great way to say thank you, while delivering useful information to those who support you financially. Be sure to give your investors a chance to hear about your progress on a regular basis, and help propel your growth.
Kaego Ogbechie Rust is CEO at Foresight Advisors — working with foundations, investment firms, non-profits, and for-profit ventures — offering comprehensive support across vision & strategy, investing & financing, and operational planning during critical periods of your growth.
If you’re looking for help, contact kaego@foresightadvisors.com or visit www.foresightadvisors.com.
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