Investor updates – turning obligation into opportunity – tips from a Silicon Valley capital raising pro

In this week’s episode of Platform Diaries, the words ‘investor reporting’ can induce a feeling of dread or indignation among founders. The fiduciary duty has been described by some as a ‘necessary evil’, like going to the dentist or getting your car serviced. While you don’t have to love it, my guest today shares why you should make the most of it.

Nathan Beckord is described by his Silicon Valley clients as a ‘wingman to start up CEOs’. Nathan - CEO of Foundersuite, a cloud-based solutions software designed to help investment bankers, startups manage processes for the fundraising cycle - has been helping start-ups become scale ups for over 20 years.

“Many founders feel that investor reporting is an obligation or duty. People gave you money, and now they expect to be able to follow along with your company’s journey, and they expect you to report to them about how the business is doing,” Nathan acknowledges.

The common view of investor reporting is that it is quite burdensome. Having to constantly justify the state of your business or come clean if things aren’t going the way you like can be jarring for founders.

“I like to flip this view on investor reporting. I think of it as marketing your business. You are marketing your business to both current and future investors.”

While no singular start up journey looks the same, any founder will tell you that you can’t go it alone. Networking, building connections and presenting your brand and product to new people is a crucial part of the process.

“Using this report to engage your investors and put them to work for your business is hugely valuable.”

By leveraging the knowledge, expertise, and connections of your investors, you can strengthen their connection to your company, Nathan believes.

So you’ve got your report ready to go, full of statistics and information. What do you do now?

“First, build a list of target investors in your industry, then ask them: ‘I run a startup, I’ve identified you as someone I’d like to form a relationship with, can we send out a one-page company update, once a month to you?’,” Nathan says. “So you start sending out an update with your company overview, wins, or recent progress, maybe some metrics or an image of your team, and that’s all it has to be.”

Nathan tells me that building these relationships and portraying yourself as a go-getter who will be engaged with an investor if they do choose to give you their money is a sure-fire way to keep your start-up at the front of investors’ minds.

He points out that if two start ups were put in front of an investor to choose from, they would be likely to select the one who has reached out to them in the past and proven their communication ability.

“Once you raise money, the update expands a bit. Now you can add a few other sections, like the challenges or problems that you’re facing, and a section on how the investor can help. Maybe a section thanking investors for helping out.”

This feedback loop will ensure that investors feel at ease with your business practice and using their knowledge and skills to overcome issues is a brilliant way to leverage their involvement.

“There’s a famous Angel investor here in the Bay Area called Jason Calacanis. He put out a quote recently saying ‘if my start-ups are not sending me a regular update, I assume they’re going out of business.’ Not sending out an update is a negative signal.”

Although not being proactive with your investor reports is mistake number one, Nathan also thinks basic things like not editing your report, if it is too long or hard to read, can also undermine the success of pushing them out.

To get in the habit of using your investor reports as a marketing tool, Nathan believes blocking out a time in your calendar every month is a good way of ensuring it gets done.

“It doesn’t have to be a painful, onerous process. You can actually get into a rhythm of investor updates and do these things in a regular, efficient way… it doesn’t have to be a Pulitzer Prize winning masterpiece.”  

Do you dread investor reports? Or perhaps you’re completing them as a ‘check box’ style activity. This week’s episode of Platform Diaries will motivate you to make the most of your reports, and unlock a strategic method of marketing cloaked in a ‘boring’ task.