Discover more from Texts with Founders
Texts with Founders: Weekly Investor Updates
Keep investors close and yourself on track
Welcome to Texts with Founders — tested tactics for early-stage startups. This free newsletter is designed to give an inside look at how I work with other founders.
Note: I’ve included all of the content from the sms screenshots at the bottom to accommodate anyone unable to read the images.
If you’re exploring starting a company take a look at the upcoming cohort of On Deck’s Founder Fellowship.
One of the more common questions other founders ask me when they're getting started is how frequently they should send out investor updates.
Put me in the camp of "only innovate when necessary." There are plenty of areas where founders try to be clever, and it becomes a distraction or harmful.
That said, it's helpful to improve how founders do investor updates in the early days of their startups. I recommend writing weekly updates:
Weekly Updates are Clarifying and Focusing
Startups are all about gaining and then maintaining momentum. It's easy to fill a week with things that feel productive but do not help you move towards your goals. Weekly updates enable you to stay on top of what matters, stay honest with yourself, and make more progress.
Taking 15 minutes each week to write down what happened creates space for you to reflect. Knowing that you will be sitting down to analyze how the week went will cause you to make the most of each day.
No investors? No problem.
If you have no investors, it can still be valuable to begin writing weekly investor updates. You can start out by sending them to yourself or close friends. You'll get the same benefits of clarity and focus. Plus, you'll have an asset you can share with investors when you decide to raise money.
Weekly Updates Help Your Fundraise
In a previous post about Handling Inbound From Investors, I wrote that sharing past updates can help investors build conviction to back your startup:
One way to build familiarity over a brief window is to share the weekly or monthly updates you’ve written so far. That enables the investor to see how you’ve progressed to date. This tactic has the added benefit of showing prospective investors how you would communicate with them on an ongoing basis if they were to get involved.
Put yourself in the position of an investor — they usually have little to go by beyond the conversations they have with you as a founder and your pitch deck. If you give them an archive of your investor updates, they can trace your company's entire journey so far. If your weekly update archive shows consistent progress, you will look compelling.
Another startup I work with sent weekly updates during their fundraise, which helped convert many investors. They recently shared their tactics with some other founders:
Send weekly updates and create an update archive on Docsend to show your growth during the raise.
After we started doing that, conversion rates for angels were ~40%
Contents of a Weekly Update
Feel free to make it your own, but here's a rough outline:
A high-level overview of what happened this week — sentences, not paragraphs
Usually 1-4 key metrics
Indicate how they've changed from last week
Highlights, Lowlights, Asks, Testimonials
Make it concise and easy to parse. Consistency of formatting from week to week is beneficial.
Nothing to report?
Repeatedly having little to share might be a warning sign that you need to make more progress or are focusing on the wrong things. Instead of switching to monthly updates, think about what can be done to make more meaningful progress each week.
Weekly Updates Work
That founder who texted me has been doing weekly updates consistently for the last 8 months. They have made incredible business progress and are experiencing significant interest in their seed round.
Weekly updates are not what makes a great startup or founder—but they can help that founder focus and communicate their progress with investors.
When should you stop sending weekly updates?
Founders who send these weekly updates tend not to stop after the raise because they realize how helpful it is to reflect and look forward each week.
If you really wanted, you could move updates to every two weeks or even monthly, but I recommend continuing to do them weekly. It's the world's best way to keep the momentum up.
I've made that recommendation to a lot of founders. Many went monthly, and those that did seem to be moving slower now. I watched a founder recently move back to weekly, and they almost immediately picked back up on speed.
I've also seen the transition from monthly to quarterly correlate to a reduction in momentum. It's always hard to be sure of the cause. Perhaps the founder switched to quarterly because they saw that they could not report much of note each month.
The purpose of this post is to illuminate, not intimidate. While there is value in writing weekly updates, I am not dogmatic. There are many successful founders who share monthly or quarterly updates. Ultimately it’s a personal choice and founders should do what best matches their operating style and goals.
The concept of “weekly updates” has been referenced in two earlier posts:
Texts with Founders is entirely free.
If you feel these resources might benefit someone you know please text or email them about it
Fundraising (Before and During)
Check Size Doesn’t Matter - Forget minimum amounts and optimize for quality people
Raise the round behind you - Avoid a drawn-out process and optimize for the best investors.
Conditional Commitments - Why they aren't commitments and what to do about them.
Handling Inbound From Investors - Avoid distractions and keep potential investors warm.
Avoid Hiring Too Early - Navigate external pressure focused on vanity metrics
Customers understand before investors do - And some investors will never understand
The Benefits and Downsides of Responsiveness - Where it can help and where it can backfire.
Avoiding Gossip - Nimbly navigate an awkward scenario.
No identifying information is shared in texts.
Text from the screenshot:
Depends on how fast you can move
And if you can make the investor update useful for you
Meaning, done right, writing the update can be a helpful reflection and review of priorities and not just busy work.
This is an extreme opinion but I think weekly early on can be hugely valuable as it helps you develop a strong feedback loop and keeps investors close. I can't think of a single startup that sends frequent updates that isn't going well—but I can think of many where the opposite is true.