Investor report: What should startups include?
Investor Reporting, or should we just call it investor communication. Investors love reports, but there are a lot of benefits of regularly communicating.
Keep it short and simple. Frequency and consistency is key.
Let’s dig in.
Why investors request for reports?
They can help.
If investors are up-to-date, they can talk about you at the right places with the right people regarding opportunities, introductions, funding, recruiting, etc.
They can help, again.
When times are tough, investors can help you identify and solve issues and challenges. It’s much easier to help when Founder’s are proactive and certainly before it’s too late.
Venture Capital’s have to report to their investors (LP’s).
Remember that reports are different, will evolve and should vary depending on the stage of the company and the industry in which they are. Let’s break it down to two types of startups: Early-stage and Later-stage.
Let this be a guide how to do it right and as simple as possible, since a startup Founder’s time is money. It should not take you more than 20min to do.
Early-stage Investor Report (Pre-seed and Seed)
Investors tend to be more focused on the verbal update.. From a financial point they are mostly concerned how long your startup is going to stay alive with current funding.
Focus: Verbal update
Metrics: Expenses, Burn Rate, Cash-in-hand, Runway and 1-3 key KPI’s for your sector.
Reports: Highlights, Lowlights, Product Development, Help Needed from Investors.
Later-stage Investor Report (A-Round and later)
Investors tend to be more focused on the Metrics since now the emphasis shifted towards performance and hitting targets. At this stage startups usually have active Board members and a CFO thus reporting should be at least on a quarterly basis.
Metrics: Revenue, Net Profit, Expenses, Runway, Burn Rate, Cash, Headcount and 4-8 key KPI’s for your sector.
Reports: Highlights, Lowlights, Product Development, Sales & Marketing update, Changes in the Team, Comments on the Metrics, Help Needed from Investors.
How to do it?
There are several ways to do investor reporting: send an email, Excel spreadsheets, WhatsApp or tools such as Rundit. Rundit aims to be the most founder friendly investor reporting tool that has been created together with Startup Founder’s, Venture Capital’s and Angel’s. Check out Rundit.com/founders for more.
About the author:
Jori Karstikko is the Founder & CEO of Rundit with years of experience in startup funding and investment banking.