Updating investors is a necessary part of obtaining external funding.  Regular updates lead to greater trust. Determine the format and content for your updates. Below are compiled tips for updating investors:

Formatting Tips:

Consistent:

It is important for updates to have a consistent format. Investors will want to know where key information is located. The formatting can be as simple as an introductory picture, followed by key information bullet points, and finally an in-depth explanation. Or it could have sections outlined devoted to specific categories. A consistent format will reduce frustration and save time.

Concise:

Keep updates short. Investors are busy people and might not want to read the entire report.  They may be content with a high level overview.  Put important information in bullet points. Be concise with word choice, this way investors have the option to skim through information.

Regular:

Investors need regular updates. While campaigning, give updates weekly by posting on the campaign page. This way, investors see an owner who is highly invested in the funding process. This will translate into an owner who is highly invested in the business, which increase investors’ trust. Once campaigning is completed, yearly updates are required, but quarterly updates are recommended. These updates keep investors connected and maintain loyalty. 

Content Tips:

Funding Milestones:

During the campaign, investors will be curious to know the progress. Reach out to them with information about how much has been raised and how much is left. Some investors will wait to invest until a goal has been reached. Showcase the progress made.

Behind the scenes:

Inform investors what day-to-day events look like at the company.  Share pictures of your team hard at work or at a team party. Introduce employees who keep your company going. Document the office or team meetings. Investors want to see what the company’s operations.

Social Proof:

Showcasing social credibility the company has received will help build trustworthiness. If the company has been given support from well-known persons in the community, give this information as an update. Positive reviews received on various platforms are also an excellent thing to include in investor updates.  Exterior sources of confidence can go a long way in boosting the investors confidence.

Research and development:

Update investors on research and development advancements. Research updates may entail revealing the perfect spot for your brick and mortar store or revealing the company contracted to produce parts. Development updates can include fixes made to code or advancements made on products.  These updates can help an investor gauge how quickly progress is going.

Financial Metrics

Financial metrics are essential for investors.  When quarterly financials are complete, give  investors access. Showcase any metric the company has had success with or improvements the company has made. Pre-revenue companies can use simple metrics such as runway (number of months until cash runs out) and burn rate (expense deficit).  For companies making revenue, common financial metrics such as profit margin or time interest earned are helpful.

Market Conditions:

Has your industry recently gained traction? Success in the industry could increase the company’s potential. Investors will want to be informed of upsides the company can take advantage of. Or maybe, your company has made a strategic shift that opened up possibilities in a different market segment. Notify investors of this decision and the related upside potential.

Updating investors is important at any stage of funding.  It builds trust and maintains loyalty. Follow these tips to make your updates as useful as possible for investors. When treated well, investors can be your greatest fans.