Clean-tech company IPG have a mission of reinventing fuel-based power by replacing the diesel generator with a pollutant-free alternative. Having raised over £1 million on Seedrs in June 2022, we spoke to CEO Toby Gill about the importance of keeping the 660 newly-acquired investors updated. Read about Toby’s stance on investor updates below…
How do you go about putting an investor update together and what information is included?
The mentality of “I will build it and they will come” is a common pitfall for hardware technology innovators. At IPG, we have embraced the fact that customer and investor buy-in is just as valuable for bringing your product to commercialisation. Every piece of communication we produce, whether it’s an email, a response to a discussion forum, or our quarterly update, is an important channel for communicating our company value and achieving the buy-in of our shareholders.
We’re excited about the strides we’re making, and we want our investors to be too. We recognise that the last thing our investors want to do is have to trawl through long, complex and, frankly, boring reports to stay updated on our progress. Anyone who works in a start-up has a first-hand appreciation for how tight time can be when you’re busy! That’s why we’ve made sure that our investor updates are short, snappy, well-designed documents that allow all our key stakeholders to share in our excitement through a clear, concise, and engaging format.
Providing this level of comprehensive and informative update does not have to be a laborious and time-consuming process with the right internal reporting systems in place. We have chosen to measure and report on our success using the SMART OKR framework. We have then built a quarterly report template with a defined word count for each OKR, which forces us to really consider what the most salient points are around our progress and the challenges to achieving our targets. Finally, each member of our Leadership Team provides the update for their department, using the structures in place to optimise the time spent on this workload.
IPG’s campaign on Seedrs was supported by 660 total investors. How do these investors respond to updates and why are they necessary?
We’ve received some great feedback from our investors regarding the recent updates we’ve shared, including that it was the best update they had seen on Seedrs! We were blown away by the support we received from our community of ~600 investors during our crowdfunding campaign in June, and the questions, comments, and encouragement we continue to receive now we have closed our raise.
Every start-up secures each funding round with the purpose of achieving a certain set of company goals. And, as start-ups look to raise ever greater amounts of capital as they progress, their ability to build trust in the company to spend that capital in the most effective way to achieve these goals becomes ever more valuable.
So not only do we believe quarterly updates are a necessity for reporting back to our existing investors about the progress we’re making, the challenges we’ve faced and how we’ve solved them. But, they also form the foundation for establishing trust with new and future investors. When projects inevitability take longer or don’t go exactly to plan, having a clear track record of how you as an organisation have overcome these challenges is as important as the plan itself.
Why do you think it’s good to be transparent about things that both are and aren’t working within your business?
When a start-up is still early stage, its track record is measured by the ability of its leadership to deliver on the plan shared during the previous fundraise. Any leader of a start-up will know that the ability to articulate your business strategy clearly and concisely to investors is critical to the success of your fundraising strategy. Investors need to understand what you’re doing, why you’re doing it, and be confident that you can deliver tactically on your plans.
‘Tactically’ being the key word, as in the same breath, investors understand that the road to commercial delivery is not without twists and turns. Part of delivering on the company strategy is forecasting potential challenges, responding proactively, and prioritising effectively to maximise the chances of success. A transparent and well-structured update will explain to investors why some aspects of the business may have been prioritised at that time over others, and the impact of these changes, to explain how progress may be stalled in one aspect of the business to guarantee the overall route to commercialisation remains on track.
What advice would you give to other founders who haven’t updated their investors in a while?
As I mentioned above, any leader of a start-up will know that the ability to articulate your business strategy clearly and concisely to investors is critical to the success of your fundraising strategy. You will also continue to manage your business with this same clear oversight of your progress during the delivery stage. So why not keep your investors in the loop when you’re doing this?
With a well-designed template and structure for your report in your arsenal, it is simple to turn your continuous reflections on strategy into something that delivers benefits to your investors, while maintaining commercial sensitivity. Not only does this demonstrate to your key stakeholders – including your team (not all leaders ensure their employees are up to date on the company strategy), your existing investors, prospective investors, and future customers – how valuable they are to your success, you can also use this as additional motivation to monitor the progress of your company strategy. It’s a win-win.
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