4 Investor Communications Templates

Investor Communications

Strong communications skills are important in all of business. Strong investor communications skills and habits are critical for entrepreneurs with equity investors. The need for clear and consistent investor communications starts from the first fundraising effort and only increases with time.

And most entrepreneurs suck at investor communications.

That’s been my personal experience. And it’s shared by others. You should read this Techstars “Open Letter to Entrepreneurs” on the subject. It says in part:

In my opinion, one of the greatest factors contributing to a company’s demise has been the lack of a communications strategy by the CEO, specifically as it relates to nurturing long-term relationships with their investors and potential investors. While communication during the fundraising process is critical, it’s even more important in the post-fundraising stage of a company’s early life. Identifying goals and metrics and communicating updates against them on a regular basis creates a cadence that will undoubtedly help when you start to run out of money.

If you have a commercial banker, strong communications is equally important!

It doesn’t have to be difficult, but it does require discipline. And it requires a willingness to be accountable to others. Both are required if you want to use Other People’s Money. If you don’t want to be self-disciplined or accountable, stick to bootstrapping.

Monthly Equity Investor Communications

Another TechStars guest blog post used a company’s “pre-investment” regular investor communications email as an example. The whole post is worth reading for context, but the template provided is:

  • Summary — a couple of lines at the top. A busy investor will only read this. Put it at the top. No more than 2–4 lines.
  • Ask(s) — investors (and advisors) LOVE to feel useful. Give them some specific ideas for things with which you need help.
  • Highlights — hit the high notes. What’s the best thing going in your company? What are you most excited about? It’s the color commentary.
  • Achievements — what have you accomplished since the last time you sent an update?
  • Action Plan — what’s next?
  • Numbers (optional) — if the you have a trust group, you might share your KPIs, which vary from company to company. Some common ones include monthly cash burn, monthly revenue, cash on hand, number of customers, churn, etc.

Investor Communications Template #2

Ty Danco is an angel investor, and he gives a full template with details for communicating to investors and advisors. The categories are:

  • The Good – 3 things that went well in the last month
  • The Bad and The Ugly – 3 things that didn’t go well
  • Key Performance Indicators – 2 KPIs actual and forecast
  • General Corporate Stuff – new staff, legal, facilities, etc. if important
  • Marketing Pipeline – recent activity, future forecast
  • Big Strategic Questions – 1 or 2 Board-level or senior management level issues
  • Asks – recruiting, introductions…

Investor Communications Template #3

Written by a New York City centric investor blogger, This Is Going To Be Big offers the following template (again, more details are worth reading including the “why do it”):

  • Intro: $XX cash in the bank, March 20XX out of cash, 1 KPI, 1 “Headline”
  • Bad News
  • Good News
  • Budget Update
  • Sales and Marketing Update
  • How You Can Help 

Investor Communications Template #4

Finally, a software coder turned VC blogged the following template (more why and details on the full blog post, a companion post explaining how founders get value from investor updates and thoughts about being creative in asking for help):

  • KPIs – 3-5 monthly numbers you are tracking over time
  • Notable Events – 1 each Great / Good / Bad / Ugly
  • Thanks – optional but thank investors / advisors who added value
  • How You Can Help – in other words, how you can get into the Thanks section next month!

You’ll see important common elements in all four investor communications templates:

  • They are concise. Investors are busy with overflowing in-boxes and only have time to skim.
  • They are regular. Monthly is best.
  • You don’t need detailed financial reporting monthly, but you DO need to identify Key Performance Indicators (KPIs) and show that you are tracking them, and when appropriate, acting upon them.
  • Include bad news. This is EXPECTED by investors. (Sorry to SHOUT but this is a surprise to a lot of entrepreneurs!)
  • Communicate progress over time.
  • Ask for help.

Don Gooding

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