SEND THAT INVESTOR UPDATE!!!

There is enough and more talk on this - and I do recognise most of us have read (glanced) through on this subject.

Why then, do I still think its worth the time and energy to both - write about it again, and to ask you to make time to actually read it.

Because I am convinced that it is a) that important, b) that impactful and yet c) equally neglected and not practiced, including by the smartest of people.

I must qualify here; I write as somebody who has and continues to sit on both sides of the table. Across this piece - you could replace Company Updates to Investors, with Fund Updates to LPs and it'd be bang on, still.

We recently sent out our first formal LP update, detailing the status on the fund, the investments we've made et al, and that's in part what nudged me to write on this.

Bottom line

Share periodic updates with your key investors and stakeholders;

Do this with as regular a cadence as possible;

Present a true factual summary of the business, short to mid-term goals, challenges and blockers - and make sure to add key asks and requests for help;

Do this authentically, with vulnerability, trust and without 'perception management'.

I’m going to break this down - and detail this out over --> Why do this? How to do it right? How to (easily) get this wrong?

At this point, I also really like to put out a call and request to founders to add their stories and anecdotes - in your own posts, in the comments here, however you will; how a practice of sending updates has helped you. I warrant you have gone through a journey of resistance, learning and then the aha in contex to sending updates - and I'm sure nothing will convince other founders more, than to know about that journey.

Why do this?

There are a couple of reasons to do this. Most importantly to me:

Clarity

Leverage and Help

Reputation

Clarity

One of the hardest things when you’re building (company / fund, …) is to be able to operate while doing both - completely zooming in with narrow focus, but also zoom out looking at the macro. Sounds easy. Is hard. Stays hard. Especially the latter.

(Assuming you're good at the former cos if not - well nothing is going to get done).

The process of writing an investor update - identifying and articulating a summary of your business, top metrics, priorities and challenges - forces you to take a step back, zoom out, and build a solid macro view. It leads to strong clarity on what you need to more of, and what you need to say no to. Where to direct money, people, resources.

I know second time founders, who now bootstrapping, write investor updates - as a practice - and send to no-one.

Leverage and Help

Building something is ridiculously hard, and may of us end up fighting these battles with one arm tied around our backs. Unconsciously so, even.

Tapping into and leveraging your investors can be a huge help. Typically - your investors come with deep operating and building experiences, and strong networks and support systems.

Communicate with clarity, and truthfullness.

Ask for help. Unabashedly.

They already believe in you and have skin in the game. It's rather unlikely they say no.

Reputation

Operating and communicating with this transparency will stand you out from the crowd. Whatever happens to your business, whenever you're next starting up - investors are likely to want to back you again if they saw some of this in your journey.

Every investor's portfolio has founders that do this, well, and those that don't.

Build your reputation and credibility - do this, do it well.

How to do it right?

Less is more.

Some of the best updates I've gotten from companies - even as they've scaled massively - have been simple plain text emails.

They reflect a deep clarity in founders, to be able to summarise their business to the most important few aspects - easily conveyed over an email, without decks and what not.

Be extremely focused with your asks. Vague and generic asks are rarely actionable, and hard to implement.

The more precise you are, the likelier you are to get help.

Ask for time from specific investors if you are confident they can help / add value - don't wait for them to offer it.

Pro-tip I learned from a founder:

With every update - call out, and thank your most helpful investor and how they helped you. Usually gets the more serious investors scrambling to find ways to best that, and help you even more. Investors are competitive, alpha beasts. Use that for your benefit. ??

How are you may be doing it wrong?

You worry too much about trying to make it look like all's great.

You hide the metrics giving away the under-the-hood challenges.

You aren't clear in your requests for help.

You make up stuff / lie.

Yes investors who follow-on, will often need to see you reach particular milestones to double down. But faking it - is nearly always going to end badly for everyone involved.

Note: I didn't want to close on this, but - as much as this is a huge needle mover in the 0-1 and 1-10 journeys; and I wish it were as simple beyond, but from what I've learnt, it's hard to avoid politics adding some friction beyond a certain scale and type of investor on cap table. ????♂?

PS. Staying true to something I said - and hitting post with minimal editing, so forgive errors.