Aidi — Investor report

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Beyond getting the funding your business needs, managing investor relationships are crucial. This can be complicated sometimes it requires strong communication skills across a broad range of constituents - investors, board of directors, etc. Companies at later stages (especially publicly traded companies), mostly have an Investor Relations Officer/ Department tasked with carrying this out alongside other functions such as maximising the company’s valuation, managing bad news, responding to rumours, etc. However, for most early-stage businesses the founders are the ones tasked with the responsibility of managing this relationship. They do this through various mediums which include - sending regular reports. 

An investor report gives qualitative and quantitative information about the status of a business. It may contain highlights of the previous period, details on performance, revenue and growth, sales, marketing and operations updates, key asks, the successes and lowlights of the given period, upcoming activities, press releases, etc. There is no given timeframe on how often updates should be sent, although quarterly and monthly reports are often recommended. Now that we understand what this report means, why is it necessary to share one? What should be its content? 

Sending updates helps to build trust and makes the founder-investor relationship better. Beyond the funding gotten, people who back your company do not want to be kept in the dark. They want to know how the funds are being utilized, key progress and drawbacks being experienced, as well as the leadership state. Sharing updates helps let them know that you consider them a vital part of the business and in time, helps create trust. The trust built over time pays off as investors who have confidence in the founders are more likely to invest in future rounds, give recommendations,  and are more probable to help in times of trouble. Interested in building a rock-solid relationship based on trust and transparency? Send your report, often. 

Moreso, people are more open to making introductions and sticking their necks out for people they can vouch for and so it is with investors. When trust is built, they are more open to connecting you with opportunities and solutions in your asks (we’ll get to that shortly) and will go out of their way to ensure your requests are met. They will also be more than willing to go the extra mile for your personal and business success, giving recommendations, etc when needed. Lastly, it helps with accountability. Sending updates helps a founder stay accountable to the goals and milestones promised. It puts checks and balances in place ensuring that laid-out timelines are met when due and reasons are given when unmet.

Now, you are ready to send your first report. What should be its content?

  • An executive summary:

An executive summary contains a brief description of what the report is about. It can simply list key hires made, any major decisions you’ve taken, growth metrics and any other critical news. The aim of this is to ensure that anyone who sees it but is unable to read it entirely can grasp all the information being shared, at a glance. 

  • Growth metrics:

The update should clearly state recent growth in the company. It can be revenue, traction, gross merchandise value, the total number of orders and transactions, etc. Ensure to break this down in a way that makes it easy to digest and understand. In cases like this, tables and charts are effective mediums of communication as it makes it easy to digest without hassles. 

  • Goals and milestones:

The goals and milestones set for the month/ quarter/ year should be highlighted. This section should what was set out to be achieved, a progress report, (if you succeeded in meeting them or not) and in cases where this was stalled or not achieved, the reasons why this happened. This gives a clear view of areas your company might need help in and give clear directions on how they can be of help. 

  • Key asks:

Every founder should feel comfortable sharing requests with their investors. These may include but are not limited to; recommendations, business introductions, coaching and fundraising advice etc. This helps your investors know your need and provides a roadmap on how they can get involved. Do not be afraid to include your asks in your report. 

  • Shoutouts:

While sharing an update is paramount, it is also necessary to take out time to appreciate anyone who has been of help. You needed an introduction to a company and an investor helped out? Awesome! Do not forget to let them know how grateful you are. It makes them feel seen and appreciated; as they will be more willing to help next time. This part is often overlooked and trivialised, but it is very necessary and should always be a priority. You may wonder, what if none stepped in to help with your previous requests, is there a need to still include this part in your report? Yes. While they may not have been able to fulfil the highlighted demands, they have surely been helpful in one way or the other. Think of ways they have pitched in - a phone call when you needed counsel on how to handle that smart, effective staff who finds it hard to work with the rest of the team? That tip shared on how to reduce infrastructure costs? That’s something to be grateful for. No matter how small it looks, always appreciate anyone who has pitched in, in one way or another. 

Sending reports can initially seem to be a task with all the founder has to juggle. Considering how important this is, measures can be put in place to make certain that it is sent when due. You can use reminders or even put it on your calendar so you remember when it is due. Make sure to be consistent, detailed and as transparent as possible. Templates are great when getting started to get started, but do not forget to customize them to suit your company’s communication approach. If you need a nudge, this is your cue to send your report today.