It is important for startups to keep their investors and angels who are not present in their board (if there is one) updated. This builds trust and also allows the founders to ask for support more effectively. Angel investors tend to be referred to as “smart money”, given that they are supposed to provide expertise and advise, and not “just” capital. In order to get the most out of this relationship, it is key to communicate effectively.

Most angels like to be up to date with the main developments in my portfolio companies and I appreciate a monthly (or at least quarterly) update to understand how things are going and how we can support the company and the founders. However, I don’t want them to spend too much time on this and distract them from running their companies. From my point of view, this update shouldn’t take more than 30 minutes to prepare. If it takes more, either too much time is spent in cosmetic aspects of the update (e.g., creating a deck) or it is not clear what the current status of the company is for the founders. The latter is a problem that happens sometimes when the team is in hyper-focus mode losing the attention to the high-level aspects of the business. I strongly believe that when done right, these recurrent updates help founders going back to the strategic view and also find some time to reflect on the last month.

The best documents I have seen focus on 5 aspects: Update, Good, Bad, Metrics, Asks. 

  • Update: A couple of sentences providing a general commentary on how the company is doing. This is akin to an executive summary.
  • Good: What are the positive things that have happened over the last month. This is not only good for the investors but it also helps the team remembering (and hopefully celebrating) their victories.
  • Bad: Being explicit about the aspects that are not going according to plan can trigger the investors to offer ways of helping you might not have thought about. This level of transparency also nurtures the trust between investors and founders in the long term.
  • Metrics: This section should list a handful (no more than five) key metrics that the company is currently focusing on. Every company is different but the two metrics that should be listed for any company are money in the bank and runway. Depending on the type and scale of business the other metrics could include Anual Recurrent Revenue (ARR), Active Monthly Users (AMU), Gross Merchandise Value (GMV), Net Revenue Retention (NRR), …
  • Asks: This is one of the most powerful ways for founders to benefit from their angels. By making explicit and detailed requests, they will be able to help much easier. The key is to not use generic asks (e.g., We would like help hiring) but to be very explicit (e.g., we would like introductions to Series A funds in NYC to discuss a potential new round in January). The more specific, the easiest will be for the (usually very busy) angels to support the company.

Going back to the time required to produce these updates, this structure shouldn’t take too long as the founders should already know what are the main updates of the month and what they might need support with. Once the content is clear, a very simple bullet points email with each one of these sections would be more than enough for the communication. I have also seen some companies using notion for this. This could work as long as the teams stop the urge to over-design the notion page and add too much information there.

As a last thought, I am sure those of you with angels in your capable went through a process to select the best “value added” individuals. For those angels, have you been effective on using their support and expertise?

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