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š How to write an investor update
3 tactics, 2 traps and 1 tool to write investor updates
Welcome back to āTactical Tipsā by Jerel and Shuo at DECODE, the largest founder community co-hosted across Berkeley and Stanford.
Today, weāll be answering the question, āHow to write an investor update?ā and covering insights around leading with numbers, adding the context that matters, and skipping everything else.
So, here is advice inspired by Mandy Cole, Partner at Stage 2 Capital.
And ... weāve curated a YouTube playlist featuring our best founders, operators and investors.
š„ Inside this issue:
ā
3 tactics to write an investor update
ā
2 traps to avoid
ā
1 tool to leverage
šLetās dive in.
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3 tactics to write an investor update
š Follow a template
You can personalize your own template over time, but start with a general template with these key sections:
Subject line: Metric-anchored, built to get opened
TL;DR: 3ā5 sentence narrative that hits every section at a glance
Key revenue metrics: Current ARR, new ARR this month, expansion, contraction, churn, as well as the plan (including goal and % to goal)
Cash: Balance, last month burn, 3-month average burn, runway, flagged if elevated
GTM update: New logos + ACV, expansions, renewals, churn with reason, current quarter target, pipeline coverage ratio, any named deals worth flagging
Product: What shipped, whatās coming, what do customers say
Team: Headcount, new hires, departures, open roles, leadership updates
Asks: Specific areas where your investors can help and make connections
Investors track the % to goal metrics; you want to show the calculation of both your actual number and your goal, not just one or the other
Donāt use % to goal without showing the goal. āWe hit 87% of planā is meaningless without knowing the plan
š© Check the flags
Explain any orange or red flags:
If burn is elevated, explain why
If pipeline coverage is tight, explain what youāre doing about it
Explain any churn with the actual reason, not āstrategic misalignmentā
If runway is under 18 months, explain how you plan to address this
Balance any orange or red flags with a āCustomer Loveā section
One real customer quote or anecdote (e.g. the VP who told you your product changed how their team works) does more for investor confidence than three more metrics
šÆ Sharpen the TL;DR
Before you send anything, refine the TL;DR section, which is arguably the most important section as most investors will read only this portion
The TL;DR section should answer these five questions in 3-5 sentences:
What was your biggest win or miss this month?
Whatās the key product or strategic move?
Whatās the team headline?
Whatās the one honest flag (e.g. burn, pipeline, a risk?)
Whatās the energy on the team right now?
Rule of thumb: The TL;DR does the heavy lifting and everything below it is for investors who want the detail
2 traps to avoid
šØ Not sharing bad news early
Donāt hide any potentially bad news because it feels uncomfortable; itāll only bury landmines in the long run
The goal of a monthly investor update isnāt to impress your investors but to keep them calibrated
Well-calibrated investors ask better questions, make better introductions, and provide better support
šØ Letting AI write the strategic narrative
Company strategy (why youāre making a big bet, what the market is telling you, etc) has to be written in your own words
Investors can tell when founders donāt write their own conviction
1 tool to leverage
š Best practice on sending investor updates
Commit to a cadence; regular updates instill investor confidence
Most small startups send monthly updates
Growth or late-stage companies typically send quarterly updates
Leverage these AI prompts to add depth, analysis and narrative context to raw metrics in your investor updates
Bonus: 1 trend to spark startup ideas
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