How to Energize Your Investors with Regular Updates
We at Bax spend a lot of time talking with startups — they’re our client-base. In that time, we make a point of picking up all the useful information we can — anything that might give our clients an edge.
One pattern that we see in top startups is the tendency to get into a cycle where one success puts them over the top, so to speak, for the next success and so on in progression.
This is sometimes referred to as a virtuous cycle, and regular investor updates can jumpstart it. Here’s how it works.
While in fundraising mode, startups should send regular progress updates to every investor in the funnel. This steady drip approach has the consistent impact of gradually building a relationship and driving investor excitement. There is a limited amount of funding out there. To stand your best chance in a competitive field, you have to be proactive in your courtship of investors.
For this email drip campaign, you will want to create a template that captures all of the positives over the past month or so — customer base or revenue increases, new deals or partnerships, new key hires and so on.
Keys to a Successful Drip Campaign
- Include an up to date “who we are and why we matter” summary at the top.
- Keep it under a page.
- This is a sales letter — keep it positive. It is supposed to “warm” your leads.
- Send it every time there is a new development.
- Send it to everyone you’ve identified who hasn’t said “no.
Why does it work?
It helps investors get to know you. More than that though, it shows investors that you can incrementally solve problems and make progress. Moreover, it shows that you can keep investors in the loop. This is powerful.
Definitely keep the lines of communication open with the investors on your cap table, but recognize that you are communicating for a different purpose now. For example, they already know your company, so ditch the company summary. Also consider slowing the pace of your communication a bit. Think “Quartly Updates” rather than constant check-ins.
The other key difference in updates to current investors is that they should include the specific challenges and growing pains that the startup is facing. Top startups leverage their investor-base as much as possible.
Keeping Current Investors in the Loop
Add these three additional sections to your email template:
- How You Can Help
- Shout Outs and Thanks
A consistent breakdown of your most relevant KPIs is a great addition too. Reporting metrics consistently and well will pay dividends on your next fundraising round.
Why does it work?
Energy begets energy. When investors are better able to see what you’re doing and how you’re going about it, they are far more comfortable with increasing investments in the future.