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How to Maintain Good Investor Relations

Jonathan Furman
Jonathan Furman

Keeping your investors up to date and in your corner

Relationships with investors should be ongoing. They are just as invested in your company's success as you are. In essence, they are your allies. And they are definitely your mentors, particularly if this is your first foray into entrepreneurship.

Your investor will also expect you to keep in touch, and will take the liberty of calling on you or emailing you when they have a word of advice or want to connect you to an expert resource. When your investor texts you their congratulations on a great conference or tells you that one of their business associate is having trouble using your app, you know there's someone watching over you. Support from investors transcends finances into the realm of moral support and personal interest in helping you achieve milestones..

It goes without saying that you should be proactive in building solid, harmonious investor relations. This isn't a difficult job – if you know the best ways to go about it. Sure, maintaining correspondence will take up time and effort, which my be in short supply during the initial stages of your business. But this is when the mentorship and experience of investors can make a massive contribution, which is why you must start the relationship early.

The rationale behind engaging investors from the moment they show an interest in your business is easy to understand. They are likely to be your first stop during subsequent funding rounds. The more investors know you, the greater the likelihood that they will come to your aid when you make your next pitch.

Why you should create a two-way communication channel

  1. You can understand investors' concerns and expectations better. Initiating and encouraging dialogue with investors is a good way of understanding the risks they're willing to take. Investors don't make decisions in a vacuum; they make logical conclusions informed by their professional insights and experience. By listening to what they have to say, you can understand their thought process and align your thinking accordingly.

  2. Make your passion and mission known. Investors are unanimous in their claim that they seek passionate and tenacious founders. You want to convince your investors that you have it in you to lead your company to its envisioned mission. The easiest way is to simply communicate what you wish to achieve and boost their confidence in your ability as a leader and visionary.

  3. Keep them in the loop. Investors will never interfere in the day-to-day operations of your company. They will expect to you to lead independently without constantly relying on them for direction. However, they still want to know what's going on and how your venture is coming along. Where necessary, they may step in to provide guidance or help you out of a tough spot.

    Hands-on vs. hands-off approach: When investors or venture capitalist (VC) firms implement a hands-on approach, they advise you on strategy and growth, perhaps in return for a seat on your board. As part of this relationship, they will expect to receive copies of management accounts and minutes of directors' meetings, and may even exercise their right to veto critical business decisions. However, they will not be involved with daily operations. Hands-off investors and VCs will expect to receive financial information on a scheduled basis but not involve themselves in any way until the time to exit arrives. They may step in when your company faces difficulties or is unable to meet the established targets.

Needless to say, maintaining a synergistic relationship with your investors isn't very different from any other important business relationship with partners or clients. Respectful communication and a dynamic attitude is welcome – being cryptic, pessimistic or cynical may cast doubts on your ability to lead from the front.

Startup entrepreneurs have many tightropes to walk and many balls to juggle. What matters most at the end of the day is how honestly you can assess your efforts, judgment and the outcomes. Every failure is a learning experience, and every win is a reason to accelerate your efforts even more. The right leadership mind frame is imperative to soldier through headwinds and celebrate glad tidings with a laser-beam focus on the mission. If you can demonstrate the right attitude, there is no reason why your investors won't pull up their sleeves to help you when you ask for it.

With this in mind, here are some ways to keep the communication lines open and active.


Email newsletters that include links to company news, events and press releases are one way of updating investors. However, they are not as common as email updates that allow investors to respond immediately for further action when needed. Newsletters are more commonly reserved for customers as part of content marketing campaigns. The content in newsletters is often a mix of educational and promotional, such as industry reports and articles, special offers, company milestones or awards, links to company social media accounts, new product announcements, or opinion columns from experts. Your investors always have the option to subscribe to your newsletter, but they may expect exclusive business development news via simple, concise emails.  

Email updates

Investor email updates are very common. They serve three main purposes: (1) to tell investors what you're doing with the money they gave you, (2) alert them to issues you are facing so they can provide their input or refer you to valuable contacts, and (3) give them confidence to pump more money into your venture in the future.

In the nascent stages of your business, it is best to send updates every month. Here is a look at what to include, and some example templates.

Easiest format for recent startups

  1. Requests: What do you need help with? List three or four items, and put them at the top of the email so they immediately come to investors' attention.
  2. Highlights: These are your milestones and achievements for the month – a bulleted list of three or four items.
  3. Lowlights: These are the problems you faced this month – also in a bulleted list of three or four items.

Longer format: What to include

  • KPIs
  • Achievements
  • Problems and challenges
  • New hires
  • Kudos
  • Media mentions

Template #1: The Good, the Bad and the Ugly

Here are our updates for the month:

Current customers:
Burn rate:
Users active after 30 days:

The good:

Were featured in X, Y, Z, which led to 100 new trials and 40 new customers

The bad:

Still searching for a senior analyst

The ugly:

We missed our target on ABC last month, though things are picking up this month so far. Our next board meeting is scheduled for Aug. 7 at 11 a.m.  Would you like to join or get on call/Skype?

What you can help us with

Can you connect us with an experienced data analyst?

Template #2: Simple reporting and requests

Hi, find below our updates for the month.


Excellent reviews (4 and 5 stars) from new app users



We lost three pitches with big business clients, which a competitor has bagged. Can you please spend a bit of your time perusing our pitch and value-adds?


We plan to roll out two new features within the next four months once app subscriptions pick up more pace.


We lost John and are looking for a new manager.

Your inputs


Thanks to ...

Anna for referring two junior analysts

Tips for creating investor update emails

  • Quantification and visuals: Include numbers, graphs, charts, screenshots and links.
  • Tell a story: This is possible if you stick to a schedule that can help investors evaluate your progress and see the big picture.
  • Brevity and clarity: Get to the point quickly and be authentic. Investors shouldn't have to call you up to clarify something that they could have clearly comprehended via email.


If your investors are agreeable to the idea of meeting every few months, this is a good opportunity to discuss strategies, developments and problems on a more personal level. The agenda for the meeting can be quite similar to what you would put on update emails, with the difference that you will discuss the items face-to-face. So, should you plan to use a PowerPoint or whiteboard at meetings, here are a few things to discuss:

  • The two or three most important deals you won
  • Cash flow; profit and loss summary
  • Key changes and developments
  • Key problems to resolve
  • Most important and relevant industry news or trends that potentially affect your business
  • Burn rate and current cash position
  • Team position: a new senior-level hire, or your team size and one or two key hires if you've been on a recruitment spree
  • Company events (lighthearted team-bonding activity, Halloween party, etc.)

If you have any information on new deals or can forward introductions of aspiring entrepreneurs (perhaps fellow alumni or ex-colleagues), this would be a good time to bring it up.


Though annual reports are not needed if you're already sending out email updates, they may be required once your business grows or you go public after a couple of years. Creating simple financial reports as a foundational step or even as an early exercise in your entrepreneurship journal can help you down the road.

The report can include an executive summary covering income, expenses, budget and spending plans for the coming year. Of course, you should add key developments and achievements, and also consider adding a message from the founders (you).

When to dial up communications with investors

There are three phases or instances where businesses seek to create top-of-mind awareness about what's happening:

  1. When they're starting out and there are many things to contend with. Investors may be particularly keen to understand developments during the earliest stages of a startup, a concern that may be exacerbated when the founder(s) in question are first-time entrepreneurs.

  2. During a time of major change or transformation, such as a high turnover, development of a new process or creation of multiple monetization streams.

  3. Unexpected challenges concerning infrastructure or industry headwinds that are affecting your top line and projections. Here, it will be important to keep investors in the loop about the severity of the problem, as strategic steps need to be taken to prevent losses.

Final thoughts

Get into the habit of sending your investors monthly email updates. If you've got the structure down, it doesn't take long to craft the updates and push them out.

Investors need to be kept informed about the good news and the bad news. To reiterate, they are your partners and allies – among the first people who can help you when there's a major problem that you cannot fix on your own. Every update is an assurance to investors that you're running the business responsibly and passionately.

If you've not had any contact with your investors for a year and then suddenly ask them to extend your company's convertible note, which is due in the next few days, how do you think they would react? In all probability, they won't mind and will surely cover your urgent need if they're up to date on your business. That's the effect of a continuous and strong relationship. Even in the worst-case scenario that your business goes under, good investor relationships can continue and enable you to secure funding for your next venture.

"For us the main indication of impending doom is when we don't hear from you. When we haven't heard from, or about, a startup for a couple months, that's a bad sign. If we send them an email asking what's up, and they don't reply, that's a really bad sign. So far that is a 100% accurate predictor of death."

- Paul Graham, Y Combinator


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Jonathan Furman
Jonathan Furman Member