So you raised money for your startup? Good for you! When was the last time you sent your investors an update? I'll bet you a large Philz coffee that it's been more than 3 months.
Am I right?
Sending regular investor updates is one of the highest-ROI activities a startup CEO can do. It's also the single activity that founders procrastinate on the most. While some folks are naturally super-disciplined, others can benefit from a nudge or "productivity hack." Here are three ways to turn your self-interest into motivation to write your regular investor updates:
Self-interest reason # 1: Write updates now to shorten your fundraising cycle later
For most funded startups, there's a very high probability of future fundraising rounds. It is much easier to "upsell" an existing investor than to convert a cold lead.
Your regular updates are a great way to show that you know how to both execute and communicate and are thus a good bet for investors to double down on. It also shows you respect them enough to keep them in the loop.
Self-interest reason # 2: Ten brains and twenty hands are better than one
Your investor update should be exactly that - an update on your progress, new initiatives, metrics, challenges, etc. While most of the update should focus on what's happening in your business, it should also always contain an "ask for help" section. Leaving this out is a huge missed opportunity.
What can you get your investors working on? In general, the best projects are ones that are high-value but low time commitment.
In our case, I recently asked my investors to help us think through a product line extension and the concurring business model. While only 4 of our 10 investors responded, their feedback and input was hugely valuable.
Apart from you and your team, no one has as much at stake in the outcome of your startup as your investors so ask for their help and put them to work.
Self-interest reason # 3: Tap the collective Rolodex for leads and sales
Investors typically have amazing networks; after all, you don't become a rich investor by being a recluse.
Take the initiative and consider their network to be an asset you can leverage. In general, I recommend leaning on this network for high-level introductions to other investors and VP- or higher-level partnership contacts.
In our case, we asked our investors for intros to accelerators and incubators, and they made several connections that allowed us to get Foundersuite adopted by the program. Good stuff!
One final tip: make it easy for them to make the intro - sending along a short email they can forward. An "opt-in" approach tends to work the best.
Leverage your investors
In general, don't think of writing your investor updates as a "chore" you need to do once a month or every quarter. Instead, think of them as a way to leverage your time and network to get more done, faster.
What strategies do you suggest to maximize investor relations?