When was the last time you sent out an investor update email? If it wasn’t recently, you are missing out on a massive opportunity that will pay off big over time. It’s a good idea to give your investors an email update at least once per quarter and provide a full overview and summary of your progress on an annual basis. They can help you more than you know!
Read on to learn more about what you can include in your investor update and access investor update email templates.
Why Send Investor Update Emails
To an investor, no news is worse news than bad news.
They gave you money and took a chance on you, and they are interested in your story! Even if the story isn’t going well they want to know. They know it was a risk. Losing that money is disappointing, but not knowing where their money stands is TERRIFYING!
There are other reasons why you want to give regular updates, even if you have little to report.
- They are on your captable. They have certain rights as to visibility into your company, and you have a fiduciary responsibility to include them in things that affect their investment. Neglecting to keep them informed as to your financial position can have legal implications later on.
- This is a long term relationship. It’d be nice if it was a friendly relationship. Regular communication strengthens your bond. It makes the joys of success more choice, and helps the pains of low points pass easier. Keeping investors involved keeps you connected to the world around you. This builds your character as a founder and as a good person.
- It helps them get to know you and your company better. Familiarity builds affinity. By inviting them into your company and making them a part of your world they feel like they belong. This makes them like you more, through good times and bad times. If investors feel like partners, they will act like partners.
- Investors can advise you through the downfalls. Investors frequently have more knowledge and experience than you have, and you can benefit from it. To some degree, they are a built-in team of consultants. By giving them regular updates, you may inspire them to simply volunteer that knowledge and experience for your benefit.
- Help them help you. It is in the investors best interest to look out for and help you, but without knowing where you are and seeing what is on the horizon, they won’t know how to help, let alone that you need help! All further assistance is dependent on them knowing your direction, your position, and the market context. Build this early.
- It is very likely that you will need funding later. If they like working with you, you won’t need to win them over. If they already know you and like you, they will be the easiest sources of future funding. Not only that, they will be likely to introduce you to others. If they enjoy working with you, they will want to share that joy with their friends.
- If investors trust you, they will likely trust you with their contacts. Your cap table is a built in network for you to tap into. However, for people to share with you, they need to know their association with you won’t hurt the relationships they have already built. Building your connection with them will make them likely to share their connections with you.
- Talent is getting harder and harder to find. Your investors can be talent brokers. Why wouldn’t they want friends or family of theirs working for a company they trust and love? Why wouldn’t they want a company they are financially invested in to have the best talent they can get their hands on?
- Investor updates are powerful opportunities to get ahead of the story. There isn’t a counterpoint to your update, so you get to set the context under which your investor sees your company. In other words, regular updates are teaching your investor how you want them to view your company. This gives them talking points when bragging to friends, but also gives them the story to tell themselves that they will keep them engaged.
What To Include in Investor Update Emails
Data – Investors want evidence of what is happening. This doesn’t have to be fancy. Regular high level numbers like current sales, current expenses, cash flow (burn), margins, current pipeline, churn rate, customer acquisition costs, etc. should be enough. Adding internal KPIs (contracts signed, value of each contract, conversion rate, sales cycle, etc.) may also be helpful. You can also sprinkle in irregular numbers that demonstrate your success, even if you don’t track them regularly or don’t report on them every time. For example, net revenue retention rate, decrease in salesperson churn, increases in sales leads per conference, ROM spend on a particularly good campaign, other wins, etc. These can demonstrate good efforts you are making that may not reflect in big picture numbers, but that demonstrate the improvement of your team over the short term.
Story – Give the data context. Explain it the way you need it to be understood. No need to use fancy jargon. If your numbers aren’t looking good, you get to tell the story behind that. Focus on what you are learning about the market that will help you in the future rather than explaining what happened. If numbers are good, explain what you have discovered that is allowing for this success and what you plan to do to leverage this in the future. Investors don’t want excuses, and you don’t need to take credit. Focus on learning and opportunities.
Problems – It might seem odd to hear, but give your investors something to worry about. If you tell them everything is fine and nothing is wrong, they will worry…about the wrong things! If you give them what they should worry about, they will think about that. Be willing to admit mistakes. Investors know you aren’t perfect. Vulnerability demonstrates character. You don’t want worries to be catastrophic, your mistakes to be incompetence, or concerns something that can’t be addressed, but you do want to demonstrate that you have your feet on the ground and eyes all around.
Focus/Strategy – Investors love the big picture. If your strategy or focus doesn’t change, simply restate it in new words. If it has changed, state the new one. This is a perfect place to ask for input or help, but don’t phrase it like a solicitation. Rather than this: “If any of you know someone who X please let us know.” Instead simply state what you are doing: “Because of X, we are currently trying to find Y.” OR “This development has led us to finding <partnerships, customers, employees, market segments> who can X.”
Outlook – What next? What do you currently see, and what challenges do you expect to encounter? Whether your data and your story is good or bad, be sure to show the character and culture of your company in describing how you are responding to these opportunities and challenges. Investors understand that everything won’t be good news, but they expect bad news will be met with a plan, even if that plan is “figure something else out.” Show them no matter what the market throws at you, your team knows how to survive and thrive.
What Your Investor Update Does NOT Need to Be:
- Long – Especially if it isn’t an annual review. Investors don’t like reading, they like understanding. If you can help them understand quickly and easily, then keep it quick and easy! If you are intimidated or overwhelmed by this task, then you are doing it wrong.
- An essay – It doesn’t need to be a written document in paragraph form. Bullet points or a chart can say more than a paragraph.
- Different – If you find a format that you like, stick to it. If investors know what to expect, they will more easily engage. This isn’t an exercise in creativity or expression.
- Cold – You are a business, but you can still be warm and personal to investors. You are building a relationship, not checking a box.
- Comprehensive – For the most part, assume your investor knows the basics of your business. Focus on what has changed, not on recounting everything about everything.
- Professional/Formal – I mean, it’d be better if it was! But if you are an early stage startup, investors understand your limitations! Remember, no news is worse news than bad news. They’d prefer a regular friendly check in than a polished document. Remember, it’s okay to let your personality shine through your words!
- Perfect – There isn’t a platonic ideal for updates. Give them a flavor for the culture of your business. Be what you are, not what you think you should be.
Fill in the Blank Quarterly Update:
Here is an investor update email template to help you get started drafting your quarterly update. Feel free to use it as-is, or make adjustments as you see fit.
Hello <company name> community!
Hope all is well! Here is a quick recap of <quarter>.
This quarter was all about <theme/primary focus>. Here is what we have accomplished so far…
KPIs
- MRR: <$X>
- ARR: <$X>
- Customers: <X>
- NPS Score: <X>
- Cost per acquisition: <X>
- Other relevant KPIs, etc.
Challenges:
<Mistakes, Threats, Critical concerns>
Successes:
<Wins, New customers, New hires, Product developments, Sales developments>
Outlook:
<Strategy, focus, Things you’ve learned, next steps, current needs>
Additional:
<PR, Culture, Fun Facts, personal stories>.
<Personal message of gratitude>
Please feel free to reach out to me with any questions, concerns, suggestions, or recommendations for partnerships, employees, or introductions. <contact info>[Example: I appreciate your being a part of our journey (elaborate), or thank you for your support (elaborate), or I am grateful that you are a part of our team (elaborate), or your confidence means a lot to me and my team (elaborate)].
Thank you again for being a part of our journey.
<CEO Name>
Fill in the Blank Annual Update:
Here is an investor update email template to help you get started with your annual update. Feel free to use it as-is, or make adjustments as you see fit.
Hey Investors,
It’s been an awesome, but intense year.
We are thrilled at the progress we’ve seen so far, and are grateful that you are taking this journey with us.
Many things are tracking well, but there are some challenges we’re working through.
Highlights
- Revenue is up <XX%>
- We’re scaling up <Important Product Initiative>
- We finally closed <Impressive Customer Brand> for a major partnership
- Big time hire — we closed <Impressive LinkedIn Bio> as our new <role>
- <Me/Co-founder/Other Significant Employee> had a <Wedding/Baby/Marathon>
Key Metrics:
We continue to have momentum across every important metric. From <month> to <month> we grew <important KPI by XX%+ every month>. From <month> to <month> we grew <XX%>. We are also on pace for a really huge <current month>.
<GRAPH/CHART of rapidly increasing sales figures>
We’ve learned something big this quarter about our <Pricing/Sales/Product Model> and by we’ll be on a <$XM> run rate. Needless to say I’m cautiously optimistic.
We’ve basically <Xx’d on Key Metric> so far this year and I believe will have <XXx’d> by the end of year.
One big thing we are scaling up is our <important product initiative>. We now have <XX+ Companies>/<X,XXX Customers> that have bought our <important product initiative>.
In the last week we’ve added <Cool Company #1, #2, and #3>. Right now I’ve got more pipeline that I can handle but if you have any companies you think would be a good fit for this let me know.
<CHARTS, GRAPHS, TRENDS, ETC>
Fundraising — <Next Round/Current Plans>:
We are in active fundraising mode. This is super aggressive but my goal is to get something done by <month>. I was in <SF/NYC/Boston> last week for some “sneak peek” conversations with friends and families. These went really well.
Here is my current list of conversations — <Link to Google Doc filled with impressive investor and notes about the conversation you had>.
If there is someone missing from the list that you think I should get in front of, please add them to the bottom and I will connect with you about setting up an intro. If there is someone on the list already that you have a really great relationship with, please let me know 🙂
The deck is still a work in progress but you can take a look here —<Link to a well-polished deck detailing your many impressive feats> .
Learnings since last update:
We now have a meaningful number of people that have hit their contract milestone. Our overall renewal rate is <XX%>, which I think is pretty amazing. What we’ve realized though is that if we can get you to do at least two <Core Customer Interactions> the renewal rate goes up to <XX%>!
We are also getting better at acquiring users to <Core Customer Interactions> faster! Last year it would take us <X months> on average to accomplish this while now we are doing it in <X weeks>. We are starting to focus on improving this even more.
We also started surveying our members. <XX%> said they were told about <your startup name> from another user and <XX%> said they told at least <XX> people about <your startup name>. Our NPS is <XX>. This is obviously huge but I still think we are just scratching the surface of how powerful our community can be.
Team
The huge growth we’ve seen this year is a direct impact <X big hires> we made at the start of the year for <Key Function #1, #2, and #3>. It’s really taken our team to another level and it reflects on what we’ve accomplished.
Everyone is pumped and feels the momentum. We are stretched thin though and while it’s been awesome seeing everyone step up, I do worry about fatigue setting in at some point.
What I feel good about
<Insert cool GRAPH>
The graph on the left shows the huge rise in <core sales metric> and the graph on the right shows the decrease in customer support tickets as <core sales metric> increases.
All the work we’ve done over the last year and half is paying off. We’ve built the foundation that is going to let us grow and provide an amazing experience.
What I am freaked out about
For our <Function #1, #2, and #3> roles I invested in director level people instead of junior folks. We’ve also been <utilizing faster, but more expensive methods of scaling>. Our burn is up and we’ll be out of money by <Month>.
What’s next
Get this round down and put money in the bank account.
We’ve also got to finish <Month> strong. We are pacing really well but there is <industry specific seasonal impediment> coming soon so it’s not going to be easy. At the same time we are preparing to take advantage of a massive surge for <industry specific seasonal impediment>.
What I need help with
Please take a look at the list of investors we are lining up —<reuse that link to Google Doc filled with impressive investors> .
Let me know if there are people we should be talking to or if there are people already on the list with whom you have good relationships.
Thank you to <Investor #1> and <Investor #2> for helping get the ball rolling on these with intros and deck feedback.
Thank you <Investor #1> , <Investor #2>, and <Investor #3> for letting me practice the pitch on you.
Happy to answer any questions you might have.
Thank you for all the support.
<CEO Name>
Outcomes
Your investors will appreciate your proactive communication. They knew it was a risk investing in your company, but communicating with them transparently will help them strengthen trust and confidence in you.
We hope these investor update email templates help you get started with your quarterly and annual investor reports. See additional resources below for further insights.
Other Resources:
Learn more about RevRoad and RevRoad Capital. Apply to join the RevRoad portfolio at apply.revroad.com.
