How often should I update my investors?

As a startup CEO, you have a lot on your plate. From fundraising to product development to team building, there are a million and one things vying for your attention at any given time.

One thing that's easy to let fall by the wayside in the midst of all this craziness is investor updates. But staying in touch with your investors is crucial to maintaining a good relationship—and keeping the money flowing.

So how often should you be sending out updates?

Err on the side of communication

The answer, of course, depends on a number of factors. In general, you should err on the side of communication and send updates more frequently rather than less. If you communicate too little or infrequently then investors may feel neglected or unsure of the progress of their investment. But don't overwhelm them with constant updates.

At the same time, you shouldn't bombard your investors with updates every day or even every week. This can be overwhelming and may give the impression that things are not under control.

Aim for monthly updates as a starting point.

That being said, here are a few guidelines to help you figure out how often to update your investors:

When you're raising money and even when you're not

If you're actively raising money: Once a week, at minimum. If you're in the middle of a round of funding, your investors will want to hear from you frequently so they can see how things are progressing.

Keep them updated on your progress towards your fundraising goal and let them know if there are any changes to the timeline or expected amount. This can be helpful for investors because it allows them to make any necessary adjustments to their own investment portfolio.

If you're not actively raising money: Once a month, at minimum.

Even if you're not actively trying to raise money, it's important to stay in touch with your investors and keep them updated on what's going on with your company. Send them monthly updates with key metrics and highlights from the past month. If anything major happens (good or bad), be sure to reach out right away so they don't hear about it from someone else.

When you hit major milestones

Whenever your startup hits a major milestone or achievement, it's a good idea to send out an update to your investors. This could be launching a new product, securing a partnership, hitting revenue goals, and even something as small (but still significant) as hiring a new team member.

Of course, not every small accomplishment warrants an update – use your discretion and only send updates for truly significant events.

Here are some common "major milestones" to consider making investor updates for:

• Reaching certain revenue or user growth goals

• Closing a round of funding

• Launching a new product or feature

• Securing partnerships with major companies

• Hiring key team members (especially at executive level)

At any other time, if there is news to share In addition to the guidelines above, it's always a good idea to send updates any time there is news to share with your investors.

Quarterly and annual reports

One universal best practice is to send out quarterly and annual reports to investors. These reports should include financial information, key metrics, achievements, and any challenges or obstacles the company has faced in the past quarter or year.

By sending quarterly and annual reports, you are not only keeping your investors informed but also demonstrating transparency about the state of your startup's finances. This can go a long way in building trust and maintaining good relationships with your investors.

What to include in your reports

Key metrics

No matter how often you send out updates, it's important to include key metrics that give insight into the progress and health of your startup. Share any key metrics that show the growth or success of your company, such as user or customer growth, website traffic, etc.

Some metrics to consider including are:

• Revenue growth

• User/customer growth

• Monthly active users

• Conversion rate

• Customer acquisition cost

• Churn rate

Key achievements

In addition to sharing metrics, also include any major achievements or milestones your startup has hit in the past quarter or year. This could be things like launching a new product, securing partnerships, reaching revenue goals, etc.

Challenges and obstacles

No business is perfect – there will always be challenges and obstacles along the way. Don't try to hide these from your investors – instead, be honest about them and share any steps you're taking to address them. This shows that you are being transparent and proactive in finding solutions.

Financial information

It's important to also include financial information in your updates, such as revenue numbers and expenses. This helps investors see where their money is going and how it is contributing to the success (or potential challenges) of your startup.

Overall company updates

In addition to the specific information above, also provide a general overview or update on what's going on with your company. This could include new team members, changes to the business strategy, upcoming plans or goals, etc.

Ultimately, it's up to you how often and what type of information you want to communicate with your investors. At a minimum, send monthly updates and quarterly/annual reports – but also make sure to reach out any time there is significant news or milestones to share. This will help maintain good relationships and trust with your investors.

Conclusion

Investor updates are an important part of being a startup CEO—but they're also easy to let fall by the wayside in the midst of everything else that's going on. By following these guidelines, you can strike the right balance between staying in touch and overwhelming your investors with too much information.

And remember, there's no better or easier way to keep your investors in the loop than with VenturePort's investor relations platform. Check it out here.