The investor email you don’t want to write (but really, really should)
The investor email you don’t want to write (but really, really should)
Advice for keeping investors informed and engaged
DEAR STAGE 2: My newest investor asked us to start sharing monthly updates. We’ve never done this before and don’t want to add a ton of overhead to our month-end process. Do you have any templates or ideas on what these should look like? ~Communicating with Investors
DEAR COMMUNICATING WITH INVESTORS: We are huge fans of the monthly update email! While it may feel like a burden to Founders, sharing these updates regularly can actually save you time. As more investors join your cap table, they will want to see different things and will ping you for metrics/reporting on their own schedule. If you proactively gather those requirements and set expectations on the cadence of communication, you are in control of this rather than trying to meet today’s arbitrary fire drill (yes, I am guilty of sending that urgent text)
When we think of founders leveling up from a seed business to a growth business, one of the first things that comes to mind is how a CEO communicates to investors and the board. A clear and concise Monthly Update is a significant signal of a CEO’s maturity. Similar to how public companies conduct hour-long earnings calls, early stage founders can level up their role as a CEO with a monthly update. Investors are already on the cap table - you are on the same team, so sharing both good and bad news early is critical to keep everyone aligned.
I teamed up with my Partner, Jay Po, for this post. From Jay’s perspective “the monthly update is how we move fast as a collective unit - it keeps everyone rowing in the same direction and allows us to move quickly and make decisions. This business is all about trust building and this is an easy way to start.” Here’s what we want to see in a regular monthly update:
Before we dig in:
Know the audience: the level of detail you will include in an update to existing investors is different than one going to your entire company, prospective investors or advisors. Start with the most detailed and strip it back to make versons for a broader audience (if needed).
Add a confidentiality disclaimer to kick off every installment: “confidential, please ask before forwarding”
Be consistent and provide context: decide what metrics you are going to share and share the same ones monthly with context - comparison to last month, progress towards board approved plan, etc…
Be timely: Our top performing companies get this update out within a few days of month end. Pick a day you release it and aim to meet that every month. The earlier/sooner, the better.
4 essential topics to cover in every monthly update:
The numbers: These KPIs should be customized to your business, but generally we would expect to see metrics that cover growth, retention, efficiency, and cash position/burn
ARR - where are we in live ARR and CARR?
How did we do last month? How much did we grow and how much did we churn? How does that compare to the plan?
Key logos - share key logos that have closed or are in the near term pipeline.
Churn - who churned and why? Do a quick assessment of churn. You’re probably already doing this analysis so share what’s going on. Leaks can sink ships.
What's the burn rate and runway - let’s keep an eye on that cash out date.
The team: include any notable updates on who left, who joined, and how you are thinking about the team gaps and potential future hires.
The product: What are you excited about right now? Give a quick high/low on product
The asks: Be upfront and clear with where you want/need help. The more specific and actionable, the better! Whether it’s referrals for an open role, helping close a key hire or an intro that could help in a BD scenario, your investors want to help!
Additional sections to consider:
These are all optional - it’s YOUR update!
CEO Summary/Review of the month
Leading Indicators: at Stage 2 we focus on the leading indicators of both retention and unit economics and this is a great place to highlight them. Check out The Science of Scaling for more info!
Highlights / Lowlights
Shoutouts; Call out anyone who has been particularly helpful or went above and beyond in the last month - investor, advisor, standout performance from a team member, etc…
Departmental Updates
Progress against key milestones/OKRs/big initiatives
Hope this helps you get started on your first monthly investor update. Excited to hear if there are other topics you decide to include.
Looking for more? Visit our website for more resources, templates, and expert tips to help you craft the perfect monthly investor email be sure to check out these Stage 2 resources.