Communicating With Investors As You Scale
Maximise transparency, minimise time commitment
With each round of financing, founders typically bring on new investors. The lead investor usually takes a Board seat, another may become a Board Observer. Other investors desire information transparency even if they’re not on the board. Eventually, the amount of time a founder needs to spend updating individual investors will become unmanageable.
So what can a founder do to scale investor comms and avoid spending too much time delivering the same update to different people?
Investors want to know 3 things:
How is the company doing? What are you learning from customers that could influence the product roadmap? How is the sales pipeline looking? What’s the cash runway?
Are there any blind spots? Does the company need to make changes to the current strategy based on the answers above? Do forward-looking metrics suggest we should scale GTM faster, reduce burn, or hire someone to accelerate a particular area of the business?
Can we help? Who are you looking to hire and can we help with introductions to our network? Would you like an intro to an advisor who can help you solve a particular problem you’re facing in cybersecurity or sales? Do you need help with customer introductions?
How can you deliver this information at scale?
Boards are most effective when they stay small. Having nine people around a table doesn’t usually lead to productive discussions, particularly when people don’t know each other well, because attendees don’t feel comfortable asking questions and sharing opinions for fear of sounding stupid.
As the company grows, try to move early investors who are no longer major shareholders off the board. Most investors have too many board roles as it is, and want to save time while getting access to the information they need. They are often happy to receive monthly updates if these answer the three questions above.
Mix & Match: Monthly written updates, group Whatsapp & Zoom calls.
Founders I work with mix and match async written updates and live group Zoom calls based on the composition of their investor base (how many investors they have and whether they’re angels or institutional VCs) and how much they enjoy writing.
Monthly Update
The founder sends a monthly email update with information on the product roadmap, customer wins, new hires and active roles, progress against OKRs and budget, and core product and financial metrics. Investors can reply with questions, and the founder can respond in writing or offer to schedule a call.
This is different from the monthly email update that some companies share with prospective investors — there is more detail in this update so you should only share with highly-trusted current investors.
Group Slack or Whatsapp
For more ad hoc updates, you can create a group Slack channel or Whatsapp group where you celebrate wins, share specific requests, and hear market intel from investors.
Monthly Zoom
You can schedule a monthly or ad hoc 45-minute Zoom for all major shareholders. In that call, you cover all the topics you would include in the written update and can answer questions live. Where a board is for strategic decision-making, this call is a trading update for information transparency, although founders can use the time to ask investors questions. Alongside, you can send a metrics doc in advance which shows the core metrics and performance vs budget.
High Transparency, Low Time Commitment
You will likely continue to have more regular catch-ups with your 1-2 most important investors, but moving to monthly written updates or calls should save time with everyone else.
What you’re trying to achieve is a feeling of transparency with your investors. If investors hear nothing they expect the worst. By mixing and matching group communication channels, founders create an open and transparent way of sharing information that builds trust but doesn’t require an unmanageable time investment.
Articles I’m Reading
Science of Scaling by Mark Roberge
The best playbook I've seen on scaling GTM teams in B2B SaaS.
He Dropped Out to Become a Poet. Now He’s Won a Fields Medal
Huh discovered that this kind of mathematics could give him what poetry could not: the ability to search for beauty outside himself, to try to grasp something external, objective and true, in a way that opened him up more than writing ever had.
The secret lives of MI6’s top female spies
A profile of the most senior women in the British Intelligence Service
A psychologically based taxonomy of Magicians’ forcing Techniques: How magicians influence our choices, and how to use this to study psychological mechanisms
If you want to learn more about how magic tricks work.
Podcasts I’m listening to
With all the Generative AI hype, I’m trying to find a more balanced perspective on where the opportunities and risks are with transformer-based models, and who will capture the value — existing software behemoths (Canva, Microsoft), startups (Runway, DeepL), or the platforms themselves (Open AI, Stability AI).