As entrepreneurs, we often think about investor updates only after receiving our first investment, whether from an angel investor, friends and family, or more serious backers like institutional investors.

However, at OpenseedVC, we believe you should consider this much earlier. And even if you’ve already secured investment, the next best time to start is now.

Why Are Investor Updates Important?

Zoom out for a moment. The purpose of an investor update is straightforward: it’s periodic communication that gives investors a pulse on their investment in your company. But what exactly do investors want in an update?

The Basics:

1. Progress: What’s going well?
2. Challenges: What’s not going as well?
3. Action Plans: How do you plan to address these challenges?
4. Future Plans: What are your key plans for the near future?
5. Needs and Support: What do you need, and how can investors help?

More Tactical Information Expected:

- Customer Growth: Do you have customers, and how are they growing?
- Revenue Generation: Are you generating revenue, and how is it growing?
- Team: Is the team growing or changing? What key competencies are you filling?
- Financial Health: How much money do you have in the bank, and how long will it last?
- Milestones: What is the next big milestone you’re trying to achieve?
- Blockers: What is the biggest blocker to achieving your milestone and how *exactly* can they help?
- Fundraising Status: Are you still fundraising, and how is that going?

For you as an entrepreneur, investor updates help keep you accountable. They also get you into the rhythm of stepping back from the daily grind and building consistency in accountability to an external party. It forces you to:

- Zoom Out: It often helps to see the forest from the trees, identifying what’s going well versus what isn’t.
- Clarify Plans: Get clear on your short-term plans and share them.
- Streamline Requests: Make asking for help more straightforward, direct and clear.
- Maintain Accountability: Stay consistently accountable to someone outside your business.

Key Question 1: How Frequently Should You Share an Investor Update?

Some founders opt for monthly updates, while others prefer quarterly. At Openseed, we recommend monthly updates, especially in the early stages when things change rapidly. Quarterly updates can create a lag between what investors see and what’s actually happening and that can create communication gaps that erode trust.

Key Question 2: What is the the Ideal Length and Detail for Investor Updates

Effective updates are:

- Simple: Find a structure that’s easy to read and understand.
- Consistent: Stick to a regular schedule (monthly/quarterly), format, and send date.
- Engaging: Avoid large blocks of text to keep investors engaged.
- Deliberate: Share the most important information quickly and clearly.

Aim to put your update together in 30 minutes to an hour. I

f it takes longer, reconsider how you gather data and look for ways to streamline the process. Your update shouldn’t feel like an additional job, and it shouldn’t be so long that investors lose interest.

Optimise for a five - seven minute reading time tops for your newsletter.

Key Question 3: Should I Have Multiple Newsletters for Different Audiences?

Some founders keep investors informed more frequently than other stakeholders.

For example, you might update investors monthly and send a quarterly newsletter to a broader audience, sharing non-confidential highlights from the investor updates.

Choose what works best for you, both have rewards, and the latter can be in incredible tool for passive outreach for potential angel investors.

Key Question 4: How do I Protect Confidential Information?

For investors, include a note at the top of your update explicitly asking them not to share or distribute it.

Given that their interests are aligned with yours, they’re likely to respect this request. However, be aware that there’s always a risk of information being shared.

Other more tactical ways is to have your updates as pdf uploaded on a docsend link, or a platform that allows you track who views it with an email authentication step.

Key Question 5: What format should I opt for?

Monthly videos or newsletters (email updates) are common.

The latter tends to be easier to maintain consistently. Whatever format you choose, ensure it’s simple, engaging, and sustainable long-term.

Key Question 6: What is a Simple Investor Update Template I can adopt?

We’ve drafted a sample template to make it easier for you to get started. Adjust it to fit the information most relevant to your startup. See template HERE

Conclusion

The best founders are consistent with updates. They help investors stay informed and identify specific ways to support you. Don’t be tempted to always paint a rosy picture, businesses are rarely a straight line.

Investors should finish reading your updates feeling that they understand how you and the business are faring, know your key goals and plans, and have clear, actionable ways to support you.

Remember, At OpenseedVC, we are first investors in experienced operators starting their technology company. We invest up to $150k and bring a global network of operators to support you from zero to one.

We invest across the Future of Commerce, Work, and Health in Europe and Africa. We review every application, and if you’d like to tell us about what you’re building, no matter how early in the process you are, do so HERE

We recommend you read our FAQs before you apply.

Till next time!

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Maria

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