It’s 11pm and it’s been a long day. But my work is not yet done. Because it’s the first of the month and that means Investor Update time.
It’s one of those things that is like flossing – I know its benefits and I know that I should. It’s just that I can also find any number of reasons why I don’t need to do one – I’m too busy, I don’t know if anyone even reads them, I don’t know what to show.
And the ironic thing is that I spent the better part of my former career doing these with great precision. Tracking and reporting on key metrics as a part of my brand management and consulting jobs.
But somehow now, as a founder, I used to be unwilling or incapable of putting out a simple update to the people that enable this very company to exist.
Finally, about a year ago, I was chatting with a fellow founder and one of his investors. Somehow the topic of updates came up and the investor started raving about how helpful he found the updates that founder sent each month.
And I realized that it had been nothing but sheer laziness on my part to not do them. So I did what I should have done months before and I asked to see an example of that founder’s regular emails. Like most every founder I come across, he was only too happy to help.
So pulled together my first update – of course it was the hardest because I had no system in place to pull all the data. But determined to make this a regularity, I built the ability for it to systematic each month.
It’s so far from rocket science and it plays such an important role in running a transparent company that is accountable to its partners. So every month I commit to sending this simple email by the 5th of the month.
I’m so glad that I have. Because beyond being the right thing to do, it establishes an important expectation within the company – my whole team reviews it before it goes out – everything from the revenue numbers to our burn rate to our challenges and opportunities.
This is our company and that’s the only way to really make it feel that way.
So how can you create and commit to your own investor updates?
1) Create a template.
Mine has the following simple sections:
Summary: 2-3 bullet points on where we were and what we’re working through
Key Metrics: highest level stats like revenue, bookings, MAU, NPS
State of the Business: details on our key metrics with simple bar charts
Company vitals: cash in bank, burn rate, # months runway, # employees
Help needed: what help I could specifically use from this audience
In the subject line I also state whether we’re Default Dead or Default Alive. If you don’t know that background of this, read Paul Graham’s words on the topic here.
2) Build a system.
We already had a dashboard based on our key metrics but we built it out a bit more so that it was simple for me to update the information above in 15 minutes or less.
3) Commit to a cadence.
This, I think is the most important part. Pick a date of the month and stick to it. Religiously. No ifs ands or buts. Especially the tough months. Those are actually the most important ones to get out.
Investor updates are such a tricky thing – most times you’ll never hear whether they mattered or not. It’s easy to assume they don’t. Don’t fall into that trap.
Investor updates aren’t for the investors. They’re for you, the CEO, to hold yourself accountable to yourself and your team.
Don’t mess up that opportunity.