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Send. That. Update.
Investor updates can be a pain to write.
We know. We have to do it too and we’re far from perfect at it. But if you feel like you’re getting zero value out of them, it probably says more about your investors than it does about the exercise. It might also signal that you don’t have the right relationship with your investors: they should be partners and allies, not judges and censors.
Finding the right tone isn’t always easy...
As an early stage founder, your mind is probably cluttered with all the things that need fixing. At the same time, you’re tempted to only share the good news with investors since you might need more money from them or help on your upcoming round. Updates are your opportunity to celebrate what’s going well while also getting help and advice on things that aren’t. They don’t need to be too detailed: 3-5 metrics you’re tracking, the “good”, the “bad” and where you could use some help. Here’s a good example by the Gitlab team.
… but investors can’t help if they don’t know.
Not giving any news for months and then just showing up one random day when things are really going terribly wrong is not a way to build trust. It’s also a wasted opportunity to get help from people whose interests are very much aligned with yours. Investors want you to succeed and though they might not all be able to help on each problem every time, an update at least puts you top of mind. In the early days, sending a monthly update is probably the best pace.
Updates are a good way to keep score.
Committing to regular updates is the best way to keep track of your progress and how you are comparing to the targets you’d set for your business. It’s one thing to set those targets internally, but sharing them with investors increases the level of accountability. It’s also useful to get some perspectives from outsiders. Though they’ll never know more than you about your business, they can ask questions that positively challenge what you’ve been prioritizing.
Investor help will evolve over time.
In the earliest days, as Calvin from Segment points out, investors (and especially angels) could help a lot with user-testing, intros to beta users & early customers, and hiring. As you probably know if you’ve already started, recruiting very talented people is a thing you absolutely need to become great at as an entrepreneur, so every bit of help should be welcome: give investors a chance to be your champions! When you grow, they might be able to get comparables from other companies or introductions to executives you’re looking to bring onboard.
Stick to it.
Investor help is a resource you should leverage as much as you can: the cost is just an hour or two of your time, the upside is great, and it keeps you focused & accountable. So even when it feels like a pain, stick to it. Like a lot of good habits, it just takes some getting used to.
The Family’s next startup batch will happen remotely starting in January! If you’re an entrepreneur willing to grow your startup in the best conditions, apply here. Get ready for an intense 6-week program: getting smart advice, accessing top operators and fundraising with the best investors.