209. Send the Update!

VC Minute
Consistently sending investor updates maintains awareness, opens opportunities for serendipitous introductions, and demonstrates transparency about the company's progress and challenges. Follow more of Allyson's writing on the VC Minute Substack: https://vcminute.substack.com/

VC Minute – quick advice to help startup founders fundraise better

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Allyson Plosko:

Over the last several months, I’ve talked to dozens of companies that are interesting, but too early for SpringTime. I always ask to be added to any investor updates, but I’m always shocked at how few founders actually send them.

As discussed in episode 174, recency bias is real, especially for investors who see and talk to dozens of companies weekly. Updates help founders stay top of mind and increase the chances of serendipitous intros. In episode 174, an update from a founder prompted Rich to connect the dots and introduce the founder to an investor he thought would be a great fit. Without the founder sending an update, it’s unlikely that connection would have happened.

Beyond staying top of mind, routinely sending updates shows investors you can communicate, a highly valued trait in founders. Early-stage investors know things don’t usually go as planned. That doesn’t bother them. Not communicating or waiting too long to communicate about the twists and turns does.

As episode 174 points out, the thoroughness of an update is less important than consistency, but the following are some basic tenets of a great update:

  1. The very first item in your update should be a one-liner on what your company does. As we’ve already mentioned, investors meet with hundreds of companies a year, and no matter how much they want to, it’s impossible for them to remember what each one does. Help orient your readers by providing some quick context.
  2. In addition to what your company does, it can be helpful to outline your North Star or key metrics. This not only helps to start establishing a trend line but also shows investors you understand what’s critical for the business.
  3. Include an ask section. You never know who is reading your updates and who might be able to help with a very specific request. Increase the odds of serendipity by outlining where you could use support.
  4. Keep it succinct. There will be times when you should write extensive briefs to your current investors, but for more general updates to folks who haven’t invested, my recommendation is to keep it short and sweet. Unless it’s a portfolio company, seeing an update with a wall of text is overwhelming, and I’m likely not going to read through it all. Ideally, it should not take readers more than a couple of minutes to get the gist.

Consistently sending investor updates is crucial to staying relevant and building trust with investors. Keep them simple and focused to engage readers and hopefully get support along the way.

About AVL Growth Partners
AVL Growth Partners, founded in 2009, is the leading fractional Finance and Accounting firm supporting organizations in pivoting from growth to scale. AVL brings an experienced team of CFOs, Controllers, and Accountants to your organization, delivering transparent, strategic actions for short and long-term success. Transform your financial approach affordably with AVL, supporting companies coast to coast – get to know AVL Growth Partners at avlgrowth.com. (Sponsored)

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