Thread by @dunkhippo33

Today's tweet thread is about the ideal investor update.

Read on >>

1) First, who should send investor updates? And why?

I think that all startups and funds who have investors / are looking for investors at some pt should send company updates.

Even if you don't have to. The benefits >> the downsides in most cases.

2) But there are a lot of reasons why people don't send updates...because they are:

-Ashamed of the progress (or lack of) in the business
-Afraid ppl will share their updates with competitors
-Not sure of the upside of doing so

3) However, if you have the right investors / are talking with the right investors, then none of these should be issues.

There are many reasons why a company won't make progress. And the right investor understands that.

4) In fact, often, there is so much luck in finding product-market fit that you could be one of the best founders but just not be lucky in stumbling upon that. And that's ok.

Good investors will get it and will not be ashamed of you or your company.

5) But great investors will even potentially help you out!

During the pandemic, there were several portfolio companies that floundered due to no fault of their own. The ones who owned it in their updates, I admire, & in many cases we made *more* intros for those than otherwise.

6) In contrast, a tricky place to be in is where you haven't sent an investor update for a year (or more) and then later ask for help.

This is not only short-sighted but an investor is left in a lurch if they don't know what is going on. How can they possibly help or do intros?

7) Not to mention that investors call up other investors all the time.

There are so many times when I've gone to bat for a company that kept me so well informed -- even if they weren't doing well, there was always some way for me to sell how awesome the team was.

8) In contrast, that's really hard to do if you don't know much about the team or the business. If an investor calls me up, I wouldn't even know what to say, and that inadvertently backfires.

9) Sharing w competitors: I don't know why investors do this.

We @HustleFundVC do not share confidential updates w other cos or other investors (without permission).

Even when a competitor of an existing portfolio co applies, we don't share it w/ our port cos.

10) That being said, you should assume that everyone knows about your business even without investors sharing.

I have a portfolio co whose direct competitor sent over a consultant-spy to learn everything & even sabotage their work! Things like this happen all the time!

11) When I was a founder, the thought of competitors learning everything about my co was intimidating.

But, now my perspective is "so what"? What are they going to do about it? Work harder? Were they not already working hard?

12) Moreover, I've seen tremendous benefit from my portfolio companies who have been very open about their results.

@HustleFundVC portfolio co @copy_ai is probably the poster child of this:

https://twitter.com/thatcontentguru/status/1428454978578833408?s=20&t=wxv8fKm0vfYWlVI0GAR9Ww

13) And they've seen tremendous benefit -- hiring, finding investors and partners is way easier, because everyone already knows the brand and what they believe in.

It's basically inbound marketing for operating the business.

14) Meanwhile, my most tight-lipped cos really struggle to find people & hire.

Think about it -- if flipped around, would you want to work at a company you've never heard of?

I would encourage all to build in public if only for the purpose of recruiting & for customers.

15) This is why we send out monthly updates (there's 1 going out tonight) to not only our LPs but also prospective LPs & folks we value in our community.

We don't have to, but there's just so much serendipity & potential upside from sending updates that is hard to measure.

16) That serendipity has led to LP introductions, LPs who said no to our Fund 1 but yes to our Fund 2 & intros to famous ppl for potential partnerships w our portfolio companies.

The upside is so great that we would still send out monthly updates even if we were not required to.

17) Put another way, if you have the right people, wouldn't you rather have a bigger than smaller audience?

On the customer acquisition side, ppl are always trying to grow their lead lists. Shouldn't you be doing that on the operational side as well?

18) Ok, so what should go into an investor update? This is what we @HustleFundVC made a while back:

bit.ly/fake-newslette…

19) Here's another one that I've liked by the @visible team: visible.vc/templates/the-…

20) If you don't have time for writing a lot, just simply:

-revenue for the month
-runway
-1-2 key highlights
-asks of your investors

will suffice. You don't need to write a book. Just a few bullets will even be enough.

Timeliness >> details

21) Often people try to perfect their investor updates, but this is just overkill.

Just ship it at 50%. That's good enough.

22) Lastly, if you're really paranoid about leakage of confidential information, just hold a recurring zoom mtg and invite all your investors to listen to your presentation and enable them to ask Q&A.

This format can work scalably as well too.