Mastering Investor Updates: A Template for Effective Communication

Navigating the complex world of startup growth and investor relations can feel like steering a ship through unfamiliar waters. The key to a successful journey is reflecting on developments and communicating them effectively to yourself & your investors. 

This is where investor updates are crucial. 

At 500 Global, we read hundreds of investor updates daily from our diverse portfolio that covers various geographies and company stages. In this blog, we will explore why investor updates are essential, how they should be done, and provide a comprehensive template for crafting effective investor updates.

Why they matter: Regular investor updates enable founders to reflect on their company’s performance and inform investors about potential problems and opportunities. Even if a startup doesn’t have a board of directors, founders can create accountability by providing updates to investors.

The big picture: Mike Preuss (Visible CEO) noted that startups that provide regular updates are 3x more likely to receive follow-on funding from investors. Updates can be sent to prospective investors to drum up interest.

When they should be done: Investor updates should be comprehensive —covering product, team, customer engagement, and financials over a specified time frame. 

• Early-stage startups are recommended to send updates monthly
• Later-stage companies will find quarterly updates more appropriate.

Below is an investor update template we at 500 Global believe could be an effective framework for crafting investor updates regardless of a startup’s stage.

The 500 Global Template 

TLDR: Bulleted summary of most important points discussed.

Message from CEO (Optional): Brief intro greeting message personalized for investors.

Wins (Highlights): Good news and progress made since the last update, including goals hit or exceeded, new key hires, product updates, etc. Anything that made the previous month great.

Challenges & Learnings (Lowlights): Most difficult moments and lessons learned from the last update and steps taken to address these challenges.

Priorities Next Month/Quarter: What 1-5 things is the company focused on next month or quarter?

Key Metrics: Key metrics should offer valuable insights into how they have evolved over time. Presenting them in tables or charts is recommended for better data visualization. However, presenting them in bulleted points is also acceptable if you are pressed for time.

• Revenue
  • Expressed Monthly or Quarterly
  • Benchmark against last month or quarter

• Cost of Goods Sold (COGS)
  • Direct costs associated with the production or delivery of the products or services your company sells. For SaaS or software startups, COGS may include costs like server expenses, third-party services, and customer support. For companies with physical products, COGS generally consists of manufacturing costs such as raw materials and labor. Provide figures in US dollars (USD).
  • Benchmark against last months or quarters
• Operating Expenses (Including SG&A)
  • Costs to sell your product and run your business. This encompasses overhead costs and SG&A expenses like rent, utilities, marketing, sales (including commission) and executive salaries. Provide in (USD).
  • Benchmark against last months or quarters
• Cash in Bank
  • USD or USD-equivalent at the end of the quarter or month
  • Benchmark against last months or quarters
• Months of Runway
  • How many months does your business have cash for?
  • Benchmark against last months or quarters
• Burn Rate
  • Amount of money a company loses in the month or quarter (Revenue – COGS – all other Expenses)
  • Benchmark against last months or quarters
• Total Headcount
  • Across All Teams/Departments
  • Benchmark against last months or quarters
• Total Active Users
  • Benchmark against last months or quarters

Shoutouts: Special thanks to team members and investors who have gone above and beyond.

Asks: Leverage investors for strategic asks. Specific asks that investors can efficiently respond to by drawing on their networks, experience, and advice.

Fundraising: If currently fundraising or planning to fundraise in the near future, update on the fundraise.