A guideline for founders that are not sure what should go in an investor update or how frequently they should be sent out.
Published almost 5 years ago.
Frequency
It's ideal to get your investor update on the 1st of the month, every month. If this is not possible, a thorough update for each of the sections below at the beginning of every quarter should suffice. The reason you want to send updates frequently is because if your investor is not hearing from you, they're making assumptions. Thoughts that might pop into their mind may be "things must be pretty bad over there" or "I have no idea what they're up to".
You don't want that, you want your investors informed and engaged, able to advocate for you and help you win.
TLDR
You should start with a TLDR ("Too Long; Didn't Read") - a single 5-7 sentence paragraph that describes the movement in your single key metric, the largest product efforts, a highlight, and low light since the last update, your biggest ask, how many months of runway are left and the general direction the company is going in until you plan on sending the next update.
You want to include this for your investors that are super busy and need the cliff notes of your journey since the last update. I personally use this to decide if I should look deeper - I almost always do.
Real Example
Blockchain continues to grow, this month in spurts as DeFi products went through somewhat of a cambrian explosion. August was amazing for web3, and Ethereum in particular as new products from the Graph and DeFi space depended on QuikNode offerings: Archive + PRO API. QuikNode add ons continue to drive new revenue and are winning customers day after day. We more than 2x'd in August, from $115k MRR in July to ending August at $253k MRR. In September, we're investing heavily in maintenance, improvements, and requested convenience features to our platform, with the goal of reaching $310k MRR, mainly through content marketing. We're looking at expanding our customer base to banks and other insurance companies, so please make introductions if you know any that are thinking about blockchain solutions. We have 19 months of runway and growing because we're profitable.
Metrics
This is a fairly straight forward section. The things I like to see here, are graphs or charts of:
1. North Star Metric - the metric really exposes the primary value customers or users get from your product 2. WAUs or MAUs - if you don't have a North Star yet, then Weekly active users (for updates sent monthly) or Monthly active users (if you only send updates once per quarter) 3. Retention - What is your cohort retention looking like 4. Revenue - If you're charging people, how is your revenue growth looking
This helps investors understand how things are going without reading a wall of text. That saves investors time and lets them focus on more important parts of your update. Note that not all of these are required, but at least 2 should be included in every update. Ideally, the same metrics appear across updates for a simple understanding of the trajectory of the company. This is not always possible, especially if you're pivoting. In this case, it's probably worth it to explain why the core metrics are changing.
Real Example
We grew average daily requests on our network 20% from 100m requests per day to 120m requests per day in August. We also continue to see 🔥 retention numbers across all of our cohorts. Chart below:
Product Efforts
What you want to include is a short, but descriptive set of paragraphs around the core product or service of the business. You mainly want to share 3 things here:
What was accomplished? Did you launch a new product? Offer more competitive pricing? Redesign the site or app?
What is ongoing? That internationalization you mentioned last update as happening soon, is it still going on? Did you discover some feature that needs to be built that you're in the middle of?
What is coming down the pipe? Got some big news coming I can get excited about? Product Hunt launch? Opening a beta for a particular kind of customer?
These help me feel super involved in your company and like I'm part of the journey, which is part of the reason I invested!
Real Example
We launched xDAI support with a few customers in August; most notably, DAOstack. We also shipped new pricing model, migrating all previous customers over, saving some customers 10% monthly and allowing us to remain competitive in the market. Lastly, we made a small improvement to metrics that shows users how many requests they've sent on their metrics dashboard.
We continue to invest in improving the product through bug fixes, speed ups, and other features that our customers require. We have an open-source tool in the works, EtherFlow, that is up and running - but not yet ready for promotion. In September, we're hoping to ship a new version of our Bitcoin API that will further satisfy customer needs and allow us to retain those customers longer. We also hope to announce a partnership with FUSE network.
Highlights
This section should just have a few points of any high points since the last update. Did you get featured in Bloomberg? Did you make a particular customer really happy? Did you sign a big deal? Get a well-known VC as your lead?
I love to hear this - I want to congratulate you. I want to think about how I might be able to riff off this win and make you even more successful. Keep in mind, this is an optional section - if you did not have any highlights do not make things up. I'm not going to think poorly of you if you didn't have spectacular moments.
Real Example
As mentioned, we grew from $115k MRR to $254k MRR in August, representing 120% MoM growth. August also marks our first 10x since February when we re-launched. We went from $276k ARR to $2.54m ARR in 6 short months! 🎉
Customers continue to shower us with praise, here is a quote from a customer support convo: "Im honestly super impressed with the speed. You guys DESTROY infura. Perhaps we can work on this in the next 14 days, Ill get back to you on this, but it would be wonderful to help promote you guys, your really doing a fantastic job. Simple and fast to setup, and around 10x faster than infura. Best of all NO LIMITS!"
Low lights
Because startups are not unicorns 🦄 and rainbows 🌈 - you should be real and share your low lights. Tell me about the L's - we might be able to turn them into lessons. Things like losing core team members, having an investor drop out of the round, losing a large account to a competitor. These things happen to everyone. Share them and we can talk about what there is to learn from them.
Real Example
Growth towards the end of the month slowed, but this was expected. We're working hard on lots of content to drive SEO traffic over the long term and keep our growth steady.
Asks
This is a big one. Let me know how I can be helpful! You should not be afraid to ask your investors for help. What I want to see in this section is literally anything you need help with that you are having trouble accomplishing yourself. Good asks are specific, short and easy to assist with. For example, if you have an ask for a key role: know exactly what the role is you want to fill, have a job description, some links to "dream candidates" and a forwardable email.
You want to include this because it can literally change the trajectory of your company - I may know the exact customer, hire or investor you're looking get on your team. I may offer you an alternative to some product problem you're having that helps you deliver to customers faster!
Real Example
We are looking to expand our reach into enterprise customers, so if you know any banks, insurance companies or other large enterprises looking for hosted Bitcoin, Ethereum or xDAI blockchain nodes please introduce us. Additionally, it's important to note that we have a fundraise coming up Q1 of 2021, so introductions to press and journalists ahead of our efforts are greatly appreciated!
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