A lot of founders think investor updates are a chore, so they’ll either issue investor updates begrudgingly or only when the need arises, i.e., when the next investment round is on the horizon, and they want to get their investors motivated again.
That’s entirely the wrong attitude to take about the value of investor updates, although it’s probably because many founders don’t think of investors as partners whose financial support enables them to pursue their dreams. Instead, they see investors as a necessary evil and believe that keeping investors updated with reports and analyses is an inefficient use of their time. Those are the founders who think their energies will be much better spent focused on the development and implementation of the product or service their investors have invested in, not wasting valuable energy keeping their investors updated on progress. It’s a very short-sighted view, and in our experience, they may eventually come to regret it.
Don’t be one of those founders.
The Top 5 Benefits of Investor Updates
- Investor updates are an important way to improve your investor relations by keeping your investors informed and happy.
- Regular communications are an invaluable way to ensure your startup stays front-and-centre in your investors’ minds so that they won’t forget about you and stay focused and enthusiastic about what you’re doing.
- They are a surefire way to build a trustworthy relationship with your investors, so you can call on them for help and assistance and benefit from their experience and insights.
- Investor updates will encourage current investors to inject more money into your business when the time comes.
- When these updates are reworked slightly for a more general audience, they can also be an excellent way to keep non-investors notified about your progress, so they’ll be much more likely to invest in your business in future rounds.
The other way to think about it is this:
As a founder, you should already keep track of your key performance metrics to ensure your startup stays on target. When you produce an investor update, all you’re doing is formalising those metrics in…