Entrepreneurship

Keeping your investors in the loop about how things are going is one of the most important tasks for a start-up CEO. You want not only avoid surprises but also engage them as much as possible so they can provide timely advice and input into strategic decisions. Here is what I usually recommend as best […]

An assortment of United States coins, includin...
Image via Wikipedia

Keeping your investors in the loop about how things are going is one of the most important tasks for a start-up CEO. You want not only avoid surprises but also engage them as much as possible so they can provide timely advice and input into strategic decisions. Here is what I usually recommend as best practices:

  • Send out a short investor update every 4-6 weeks – an email with a few bullet points and metrics is usually enough. If the situation is critical (e.g. you are running out of money and working hard to close a financing round), more frequent updates are better.
  • The email should cover key milestones you accomplished since the last update, what’s on the horizon for the next few weeks and key metrics (not more than 4-5).
  • Most importantly you should include a little section on how your investors can help you. Be very specific in your requests, e.g. “I need a strong introduction into company x” or “Who knows a great graphic designer that can help out short-term with some projects?”
  • One of my companies recently started to post these emails on an investor blog which I really like as an idea as it facilitates follow-on discussions through comments.

Independent if you stick with emails or use an investor blog, keep regular investor updates high on your to do list – as one VC recently said to me: the failure of a start-up to keep their investors informed is usually a reliable sign that there is more trouble down the road.

Enhanced by Zemanta

Version One

It’s been about a little over a month since I joined Version One and returned to early-stage venture after spending the past five years as a founder in the addiction treatment space. While a month is a short amount of time, it’s been fascinating to see how certain things have changed during my time away. […]