I Hate Investor Updates
When I was a founder, I wrote weekly investor updates. Every Sunday night, I dutifully spent 1-2 hours in front of my computer writing them.
And you know what? I hated every minute of it.
Plenty of founders will tell you that writing regular investor updates helps them to gain clarity about their business. That the process allows them to step out of the day-to-day grind and look at the big picture. That may be their experience, but it wasn’t mine.
My experience was that writing investor updates was a tedious, time-consuming pain-in-the-ass.
My todo list was seemingly endless, yet every week I had to spend 1-2 hours writing an investor update. As the years went on and the challenges we faced grew more frequent and complex – I dreaded Sunday night even more.
But no matter what, I sat down in front of my computer and wrote an investor update.
Every. Single. Week.
I still have every investor update I ever wrote
If you’re thinking to yourself “but Chris…nobody forced you to write those updates,” you’re absolutely correct.
My investors didn’t demand it. There wasn’t a clause in our investor docs mandating weekly updates, yet every single week I did it.
I hated it, but it was one of the most important, impactful things I did as a founder.
Why Investor Updates Matter
If my investors didn’t demand weekly updates and I hated doing them, why did I persist on writing them week-in-and-week-out?
Because consistency breeds trust. And trust is one of the most important things a founder can develop with their investors.
When someone invests in your company — whether they’re an angel investor or a VC — they’re taking a massive leap of faith in you as a founder. For as much diligence as they might do, at the end of the day they’re trusting that you will do the things that you said you would. Investor updates provide them with a window into the businesses.
When I first became an investor, I was surprised by how varied different founder’s approaches to investor updates were. Some founders sent weekly updates. Others sent monthly ones. A few sent quarterly updates.
Many founders sent no updates at all.
I quickly found myself spending more time with the founders who kept me in the loop. I knew what was going on with their businesses (at least, at a 10,000 ft level), so I could reach out when I thought I could help. Many would ask questions or share requests with their investors, and I would jump in where I could.
And when things got tough and founders needed extra help, I already had a strong understanding of the underlying circumstances.
At least, for the ones who sent updates.
Which Brings Us to Today
Today, we’re in a really tough market.
Many companies are facing serious challenges. Revenues are falling, runways are shortening. A significant number of companies will need to raise capital this year having not hit their milestones.
So what does that have to do with updates?
When the times get tough, one of the first things to go for many founders is the investor update. Weekly becomes biweekly or monthly. End-of-month updates start coming a few weeks late, and so on. As a CEO, it can be tough to garner the energy to write an investor update when it feels like you’re under siege, so many skip it.
The thing is, investors notice it. Immediately.
The best investors want to help when things get tough, but in order for that to happen, founders needs to keep them in the loop. Which means providing regular updates. No matter what.
Making Investor Updates Work for You
When things get hard, it’s easy to justify prioritizing something urgent over your investor update. Which makes it crucial that you do them in a way that works for you.
In my case, certain aspects of my updates became automated over time. Manually-calculating metrics turned into spreadsheet calculations, which eventually turned into database queries and then real-time dashboards. That helped reduce the burden and allowed me to focus on the important part of the update: the narrative. Aka my interpretation of what was going on.
Of course, that part of the update can be like leg day at the gym: no matter how consistently you do it, it still sucks every time.
But you need to do it. No matter what.
The folks at Highline Beta have a great investor update template
Investors take a massive leap of faith in you when they invest in your company. Maintaining that level of trust is essential if you hope to rely on them when facing challenges.
The last thing an investor wants to think is that you’re hiding bad news from them. Regular investor updates don’t guarantee that every investor will be there with things get tough, but skipping them almost guarantees that they won’t.
In my case, providing our investors with regular updates gave them the confidence to lead our Seed round when we failed to raise from new investors.
So keep it up. Find the energy and write that investor update email.
No matter what.