Seedrs Blog

Creating compelling investor updates

Creating compelling investor updates

26th April 2018 by Steve Bates

Over half of Seedrs’ investors read the updates that Seedrs Alumni companies send out. From a marketing point of view, an open rate of above 50% is amazing. And that’s exactly how you should see your investor updates: an opportunity to market your company to your investors.

This is well worth doing because around 70% of investors are more likely to re-invest in a company if they receive informative and interesting updates on a regular basis. This could be because investors feel closer to a company if they know how their investment’s being spent. Especially if the money’s going into growing the business. Investors just feel a need to know how the company is performing in general. In fact, it may well be in the small print that you agreed to provide regular investor updates.

So, here’s a quick guide on how to create engaging updates – and when to send them to your investors.

Just how often is a ‘regular’ update? 

It’s best to send your investors an update each month if at all possible. It needn’t be a long piece. In fact, many investors actually appreciate a brief update.

To help you to get your updates out there but without taking your mind off your business for long, we’ve put together a simple template to help Seedrs Alumni businesses. In fact, we reckon that with our template you’ll be able to put together useful and professional investor updates in less than ten minutes. So, if you’re a Seedrs Alumni company, be sure to keep an eye out for our update reminder emails: they usually include a link to our update template.

Putting together a great investor update

If you’d rather create updates from scratch, you may find it best to start by putting together a framework by thinking about the subheads you’ll need to tell your investors what’s being going on with your business. For example:

  • Investment
  • Growth
  • New products/releases
  • Technology
  • Focus on your marketing
  • Press coverage
  • Operations/new hires
  • Regulatory news that will impact you and your sector
  • Business issues/solutions
  • Future plans/what’s next

Just pick out the subheads that are relevant to your business and what’s been happening with it and your sector lately.

Next, write two or three sentences that flesh out what’s happening.

Why not ask for help from your investors?

It’s only natural that your business will need assistance every now and then. Rather than paying out precious capital for help, it’s worth seeing if any of your investors can help. After all, it’s in their best interest to put their energy into assisting you with making your business a success. Besides, they may actually appreciate the chance to help you.

Pre-emption rights: good for your business 

If you decide to have another round of financing, it’s wise to let your existing investors know about the opportunity to invest in your company again.

What’s more, the chances are that you included pre-emption rights in your small print the last time you raised. In fact, on Seedrs, we usually include pre-emption rights when a business raises with you. Pre-emption rights ensure that pre-existing investors have the right (but not the obligation) to invest in the future fundraising rounds of the company. That’s so that they have the opportunity to maintain their level of shareholding in a company – and avoid dilution. They also can put further money into a business if they consider it to have a high probability of becoming successful – to maximise their potential returns.

The happiest of updates?

If your startup or early-stage business grows and looks like becoming a ‘winner’, it’s possible that rival businesses will want to offer to buy it. Of course, if this happens, be sure to let your pre-existing investors know all about what’s happening with a timely update.

Steve Bates

Steve Bates

Content Team at Seedrs

Digital Agency Kent