A Template for Updating Your Investors

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The last thing I ever want to do is create work for my portfolio companies.  That being said, I think that there's a certain amount of management communication that serves a purpose well beyond just letting the investors know what's going on in the company. 

Ideally, investor communication serves the following purposes:

1. Focuses the attention of the CEO on goals over a fixed about of time: "What are we going to accomplish between now and the next update?"
2. It can create a sense of urgency by putting those goals to paper.
3. Requires the team to reflect upon how well they acheived prior goals and whether anything can be learned to improve performance.
4. Helps experienced investors identify fact patterns that the management team might not notice--because sometimes another pair of eyes can look at things just differently enough to spot a key opportunity or a potential future problem.
5. Focuses the efforts of well meaning investors who want to help onto the most pressing issues and opportunities to contribute.

Here's a template you can use--inspired by Rob May of Backupify:

-- INTRO --

Cash in the bank:  $x.x

Cash out date: March 2099

[Key performance metric]:  What's the one headline number the whole company is focused on right now?

The biggest news in the company is this... and here's one sentence about it.

-- BAD NEWS --

- Here's a problem that we're facing.  This is how concerned I am about it.  This is the reason for the problem.  This is what we're doing to address it.

- Here's another problem that we're facing.  This is how concerned I am about it.  This is the reason for the problem.  This is what we're doing to address it.

-- GOOD NEWS --

- Here's something that's generally good about something really important to the company.  Here's a reason we're optimistic that it will continue, based on this key assumption.

- We're launching some stuff and here's when it's going to happen, and why it's important to the company.

If we're a more mature company, we might even go this far to update you...

--  BUDGET UPDATE --

Here's our cash situation and that's based on several key assumptions.  Are we moving fast enough, or too fast?  Here's what I think the answer to that is, and why.  Here's what we're driving to in terms of breakeven/goals for fundraising/revenue growth.

-- SALES and MARKETING UPDATE --

Now I'm going to talk about the top of our marketing funnel.  Here's what's going on with new leads, and what's driving them.  Here's what we're doing to get these up.

Here's how conversions are going.  It is at/above/below plan and here's what we're doing about that.

-- HOW YOU CAN HELP --

There are two things I can use from you right now...

1.  This is something specific you can help with... not something like "More devs!!" but something actionable like, "Can you introduce me to a recruiter, or to someone who excels at hiring?" 

2.  Here's another specific ask that I need from you.

3. Here's a list of our top five biz dev partners and a priority description of the kinds of companies we can work with.  Here's a blurb you can send to them when you do an intro about what we do.

Thanks,

The Team

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