Investor Updates

Regular written communication from founders to their investors — a debated but empirically validated practice at early-stage startups.

The debate

For:

• Useful to organize thoughts on a regular basis and ensure everything the team does is aligned with long-term vision
• Investors are an extended team; communication helps them help you
• Nick Tomaino (1confirmation): observed strong correlation between consistent investor updates at early stage and long-term success in his portfolio — the OpenSea example (2018 first investor update) was his illustration

Against:

• Product-market fit is the only thing that matters early on, and time spent on email is time away from finding PMF

Best practice (Lemkin’s 10 Tips)

Jason Lemkin’s most important tip: send monthly investor updates within 48 hours after the month ends. The key is not to spend a lot of time on it — MRR, cash burn, NPS, and key metrics should already be known, so the barrier to sending is low.

Additional tips:

• Board materials out 3 days before the board meeting (not the morning of — a confidence destroyer)
• Know and share your exact zero cash date, updated monthly
• Have your team present more, and you less
• Regularly ask investors how happy they are on a 1-10 scale

Where this appears

• Founders Often Debate Whether It’s… (tweet)
• When Times Get More Stressful… (tweet)