A Framework for Monthly Investor Updates

Between startups in our portfolio and companies that we haven’t invested in but still share their monthly investor updates with us, I get to see a lot of updates. I get to see extremely well-put-together updates, pretty bad updates, and everything in between. While teams may structure their updates differently and focus on different key items, the best updates I see share a set of core common elements and information. 

What you will find below is a framework you can use for your startup for regular investor updates that pulls from elements of the best updates I’ve seen. 

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A Guide for Monthly Investor Updates

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Why You Should Send Investor Updates

Of course, investor updates are a great way to keep your investors updated on what’s going on with your company, but when used effectively, they also provide other benefits. Some of those benefits include:

• Maintaining and increasing existing investors' confidence in your leadership and company making it easier for you to raise more capital from them in the future. 
• Establishing confidence with potential investors and making the case for why they should invest.  
• Showing investors who have passed on investing in your company your progress and traction to make the case for why they should invest in the next round.   
• Being able to consistently and clearly communicate what assistance you need from your investors to help them provide you with real value. 
• Building an open and transparent relationship with your investors.  

Who You Should Send Investor Updates To

Investor updates should go to:

• Your current investors.
• Investors you’ve met with but who have passed on investing in your company. When an investor passes, ask if adding them to your distribution list is okay. 
• Investors you are interested in raising money from but haven’t formally pitched yet. Again, just ask if adding them to your distribution list is okay. 

Update Dos and Don’ts

‍Dos

• Make the update as concise as possible.
• Be open and transparent.  
• Use the update to show why your company is a great investment and why you are a great leader. 
• Focus on outcomes, not activity. 

Don’ts

• Don’t include fluff. 
• Don’t try to hide problems. 
• Don’t talk about what you did without talking about the impact what you did had on the company.  

Update Template

Update Summary

This is a summarized overview of the key details of the update. Not all of your investors will read through the entire update, so your summary should include the most important information you want to communicate to someone who may not read everything. 

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Key Metrics

What is a metric? A quantitative item used to measure, assess, and track performance.  

What are your company's five to seven most important metrics to track, and how did you perform against them between this and your last update? 

Identify the most important metrics for your company's growth and success. These metrics could be user growth, retention, churn, active users, conversion rate, burn rate, runway, or any other critical metric. Regardless of what metric you select, the key here is to focus on actual metrics that are quantified with numbers. 

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Highlights

What are three to five great things that occurred since your last update? 

Focus on tangible things that move the business forward and clearly communicate why each highlight is good for the company and how each highlight moves the company forward. 

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Lowlights 

What are three to five negative things that occurred since your last update? 

There will always be something that isn’t going the way you want it to or a problem that comes up. Proactively communicating those issues to investors is critical to maintaining a relationship built on trust and transparency and alerting them to issues you may need help with.  

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Asks

What are the most important asks that you currently have for investors? 

Things often come up that you need your investors to help you with. This is when you should communicate those needs to your investors. 

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Product Updates

What are the three to five most significant product updates that occurred since your last update? 

Your product will drive the success of your company. Due to the importance of your product, it warrants its own section in your update. This is where you can provide updates regarding significant new features and their value to users, validation conducted, upcoming critical roadmap items, and other key product updates. 

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What’s Next

What are the three to five most significant things you have coming up? 

Here, you can provide insight into some of the important activities, events, milestones, etc. you have coming up. These can include extending an offer to a new critical hire, opening a new investment round, or crossing a major milestone on your roadmap. 

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Sample Update

‍Update Summary

Welcome to our update for this month! 

We are experiencing challenges filling two key positions and need help closing this fundraising round.  

From a runway perspective, we are currently in a strong position and have decreased our burn to strengthen that position moving forward. We’ve added four new customers and have successfully maintained a high user retention rate while increasing user engagement.  

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Key Metrics

• Runway: 12 months - increased our runway by two months by decreasing our monthly burn.
• Investment commitments for the current fundraising round: three commitments totaling $350,000 - no new commitments were added since the last update
• Burn rate: $63,000 per month - monthly burn decreased by $12,000 over the last month.
• Monthly active users: 142 - added 32 new active users since last month
• Customers: 35 - added four new customers since last month
• Customer retention rate: 100% - unchanged from the previous month
• Customer conversion rate: 5% - increased by 3% since last month

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Highlights

• We hired a new Head of Product with significant Product-Led Growth experience, who is helping us increase our customer conversion rate. 
• We’ve seen significant increases in user engagement from the last set of features we launched. 
• We were accepted into an accelerator program providing $100,000 in non-dilutive capital.

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Lowlights 

• One of our lead software engineers left for a higher-paying role at another company, which has slowed down the speed of our software development team. 
• We are still struggling to hire a new UX researcher, which is impacting our ability to validate potential new product features. 
• We needed to pay an external consultant to help us address internal compliance issues. Both the compliance issues and the cost to address them were unexpected. 

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Asks

• Help us find a new lead software engineer. If you are connected to software engineers who may be looking for new roles, please reach out to us for the job description and salary range. 
• Help us find a UX researcher. If you are connected to UX researchers who may be looking for new roles, please reach out to us for the job description and salary range.
• We still need another $750,000 to close this round. Please connect us to potential investors in your network. 

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Product Updates

• We conducted user interviews with more than 200 potential users over the last month, focused on gaining a deeper understanding of the context users are currently working in when they encounter the problem we are solving. 
• We improved our onboarding flow for new users to improve user engagement. 
• We added a core feature based on in-application user feedback and testing to increase user engagement at a touchpoint with low user engagement. 

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What’s Next

• We are launching a digital marketing campaign to drive new potential customers into our PLG funnel.
• We are launching two new product features focused on increasing user engagement. 
• We are conducting another round of user research to refine our user personas and gain deeper insights into our users.