Investor updates

What is an investor update?

An investor update is a regular communication from a company to its investors, containing detailed information about financial performance, team changes, and customer wins. The purpose of an investor update is to maintain transparency and ensure investors are aligned on the company’s strategic initiatives.

Investor updates are designed to provide an overview of company performance, operational milestones, market trends, and other recent developments or challenges. This information can be delivered in different formats, including emails, PDF documents, presentations, video updates, or meetings. Regardless of the format, an investor update should be professional and concise, and meet the expectations of the audience—whether they are angel investors, venture capitalists, or private equity firms.

As your company grows, things change quickly. Sending regular updates will help you build trust and confidence with investors. Many early-stage founders share investor updates on a monthly basis, whereas growth or late-stage companies typically do this quarterly. The better your relationship with an investor, the more likely they are to participate in another funding round and refer your company to new potential investors. Informed investors are also better equipped to guide your company through any challenges.

Below, you’ll learn a few ways to write better investor updates.

What to include in an investor update

When an investor reads a company update, they’re looking for indications of your company’s trajectory. Depending on your stage, this could mean signs of product-market fit or whether your organization is scaling successfully. Most of all, investors want to understand whether you’re hitting key metrics and financial goals, including cash runway and burn rate.

Investor updates typically have five major sections:

1. Highlights: Don’t bury the lede. Your investors want to scan your updates for the most important information about your company. Put your takeaways at the top.

2. Financial performance: Update investors on your financials, including burn rate, so your next round does not come as a surprise. We recommend focusing on a single key performance indicator (KPI), and showing progress against that metric in every update. Depending on your industry, your KPI could be daily active users, monthly recurring revenue, or time spent in product.

3. Customer wins: Whether you’ve landed your first customer or renewed a seven-figure contract, your investors want to hear about it. In addition to customer numbers or sales metrics, consider including new logos added, as well as positive customer quotes or net promoter score (NPS).

4. Key hires: As your company scales, your team will change. It can be challenging to find the right lead for engineering or marketing, but when you do, your investors will want to celebrate with you.

5. Asks: Whether you’re trying to make an executive hire, sell to key customers in a certain segment, or expand to a new country, your investors may be able to help. Your investors have extensive networks and connections, and they want you and your company to succeed. Let them know how they can help in this section of your investor update.

Updates can also include miscellaneous items like new board members, your latest product launches, or recent press coverage.

How to write a great investor update

Regular updates will help your investors track the growth of your company. Early on, talk with your investors about their expectations for updates: Are there specific metrics they’d prefer to see? What is their preferred style of communication? 

Setting clear expectations and communicating openly will build trust between you and your investors. In addition to your investors’ particular preferences, here are some general tips to keep in mind:

• Keep your metrics consistent: To provide a clear picture of your company’s progress over time, include the latest numbers without changing the metrics you’re tracking. Don't just pick your best results—investors will see through this. Being transparent will help them understand when or how they can support you. 

• Commit to a cadence. Regular updates instill confidence. Most small startups send monthly updates. Growth or late-stage companies typically send quarterly updates

• Use a standardized format: Ensure your updates are easy to scan and compare by including key information in headlines and adopting a standard format.

→ Find out how to send effective investor updates faster with Carta’s Communications Center

Investor update template

Using an investor update template makes it easier to keep your investors informed as your company grows.

Wondering what a great investor update looks like? Download the free template below to see a best-practice example. 

How to choose which metrics to share with investors

We asked experienced investors which metrics they care about from companies in consumer software, enterprise software, fintech, hardware, marketplace, and e-commerce. Then, we created a free KPI template to help you organize your company’s financial data and key metrics, ensuring your updates are impactful and relevant for investors.

Carta customers can also send investor updates directly via the Communications Center. With access to best-practice templates and the ability to import a one-time financial snapshot from your accounting software, Carta offers a secure and efficient way to keep investors up to speed. 

Send and track investor updates on Carta

Your investors already turn to Carta for information on their portfolio companies’ cap tables and valuations. Now, you can update them on company performance and milestones within the same trusted platform.

Carta’s Investor Relations tools allow you to manage all investor communications in one centralized place:

• Use investor update templates to include the metrics your stakeholders want to see.

• Send a one-time snapshot of your financials directly to investors through the Communications Center.

• Select recipients and control stakeholder access permissions based on their share class or relationship to your company, using data already in Carta.

• Share sensitive information and documents securely in a virtual data room.

• Track how current and prospective investors are engaging with the updates, messages, and pitch decks you send in the Communications Center.