How to write an investor update

Amelia's Newsletter #5

After we closed our pre-seed round for Honeycomb, I heard I was supposed to start sending something called an “investor update.”

I’d never heard of an investor update. I tried searching for examples, but people weren’t comfortable sharing real ones since they often had sensitive information. Understandable, but also frustrating. I thought, “Somehow I am supposed to figure out how to write this very important email, that I have never seen before, without examples, and figure out how to make it good? And every new founder has to reinvent this wheel from scratch??” 

It turned out the answer was yeah, pretty much.

Two years and dozens of iterations later, one of our investors told me our update is one of the best ones he gets, out of his portfolio of hundreds. 

How to write an investor update

My update looks something like this:

Subject: Honeycomb Investor Update - February 2023
From: amelia@j….oneycomb.com
BCC: ellen@vcfund1.com, joe@vcfund2.com, ada@vcfund3.com…

But I was still curious, what actually made it “good”? To find out, I reached out to a few investor friends and asked them to share their favorite investor update they receive.

Here are 10 best practices the top investor updates had in common:

1. Use a standard subject line

Keep the subject line simple, direct, and easily searchable. Every update stuck to a formula with some permutation of the same 3 components: 1) Company name, 2) month and year, 3) “Investor Update.” Example: Honeycomb Investor Update - February 2023

2. BCC everyone or set up a mailing list

Half BCC’ed all recipients, half set up a mailing list like investors@. Do not put everyone in the “CC” or “To” field. If someone replies, you want that reply coming only to you, not blowing up everyone’s inbox.

3. Don’t link out to your update

Don’t make investors click a link to read your update in Google Docs, Notion, etc. Put your update straight in the email. This saves your investors a click, making it more likely they’ll read it.

4. Lead with a TL;DR

A 1-2 sentence summary makes it easy for investors to copy / paste your status into their own updates, e.g. to their partnership or LPs.

5. Use headings with bullets

Every update used a series of simple headings with bullets. None were written as paragraphs.

As examples, here are sets of headings from three different founders’ updates:

6. Add emojis to headings

I was amused that every update used emojis in the headings! But it makes sense — emojis really help to add visual interest and break up the wall of text.

7. Thank your supporters

Giving shoutouts goes a long way. Every update had a Thank You section to credit investors who had helped out. All used full names in the shoutout, and some also mentioned the person’s fund as well.

8. Include asks

All included 1-2 asks for help. Write the asks as clear directives, starting with action words:

Good:

• Send me 3 names…

• Write us a review here…

• Upvote our post…

Bad:

• If you have a minute, check out…

• We’re struggling with…

9. Keep it succinct

Every update was fairly short, ranging up to 2 screens max in length. Meaning, roughly, if you opened the email on desktop and scrolled down one more full screen, you hit the end of the update.

Do not write a long update. People will not read it. (In fact, some people sent me very long updates as examples of the worst updates they receive.)

10. Send updates monthly

The most popular send cadence was monthly. No update was sent less than quarterly.

Parting thoughts

Your investor update is one of your main touchpoints with your investors. Save yourself time by following a few best practices, and your investors will enjoy reading yours.

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Notes

[1] It’s typical not to receive many replies to updates, so if you aren’t getting many responses it doesn’t mean people aren’t reading them. If you want more replies, let people know 1:1 that you like hearing from them.

[2] Some founders also include revenue, burn rate, and cash on hand / runway to their key investors.

Thanks to Ellen Chisa, Ada Chen Rekhi, Keir Mierle, Joe Mahavuthivanij, and Waseem Daher for reading early drafts of this post, and to Casandra Stewart and Kate Westervelt for inspiring the idea.