Congratulations, you’ve convinced an investor to capitalize on your startup; however the next milestone is to ensure that you maintain good relations with the same in the hopes that they may fund you again. If you wait until you need to raise money again to talk to your investors, they may not take it too well.
You need to address them on progress occasionally, using various means, but one of most convenient and effective methods is by using email continuously. Once a month should be sufficient, preferably the founder should do the emailing. As a result this will send a message to them of your accountability. This information is how they evaluate your performance and whether you’re worth pouring any more money into. Once the time comes when you may need more capital, then they’ll not only invest in you again, but they’ll connect you with other investors and serve as great references in the process.
You can do this by sending out a standard update email with the same format, while they may not always reply, rest assured they are reading and probably appreciate the update and progress of the startup. This is to say that if your startup isn’t doing too well, an email should still be sent out regularly.
To ensure that the email fulfills its purpose, you just need to follow a few basic rules:
- Keep the format consistent. Use the same subject line so it’s easily searchable.
- Keep it short. You want an email short enough for an investor to read just before he goes to bed.
- Stick with the same categories and metrics. Identify the ones that matter most to your business, then compare this month’s stats with last month’s.
- End with one or two “asks” at the bottom. Investors are always saying they want to be helpful, here’s how they can be.
- Proofread; always ensure that your leaving a favorable last impression, so don’t be sloppy.
Here is a sample of how the email could look like;
Hello
[One-paragraph introduction sharing whatever your focus has been over the past month.]
Top priorities:
- [Priority #1]
- [Priority #2]
- [Priority #3]
Product:
We’ve made [summary of latest updates].
Money in bank:
- We have Kes[_____] in the bank. This gives us a runway of [__] months at our current burn rate.
- [Any other relevant funding updates.]
KPIs:
- Revenue last month: Kes[_____]
- Revenue this month: Kes[_____]
- [Other important metric last month]
- [Other important metric this month]
Other updates:
- [Big win #1]
- [Press coverage #2]
- [Other update #3]
[One ask for investors–in bold.]
With Kind Regards,
[Name]