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An interesting aspect of running a fund is that I am both raising money from high net worth individuals and institutional investors and speaking to founders who are raising money from investors like me.

Why you should send monthly advisor and investor updates

Written By:
Tyler Tringas
December 18, 2019



An interesting aspect of running a fund is that I am both raising money from high net worth individuals and institutional investors and speaking to founders who are raising money from investors like me. One upside of that is I get to learn fundraising best practices from smart founders and then test and deploy them myself in my own fundraising processes. I rarely publish fundraising advice (because most of the time I think it’s a hacky way to get the attention of founders) but when I do it’s because it’s something I’ve put into practice myself and seen work.

Which is why I whole-heartedly recommend that every founder start a monthly update newsletter that you send to a tight knit group of advisors, potential hires, current and potential investors.

Here is a laundry list of reasons to do it

1/ It’s a great productivity hack. Just the simple act of committing to update other people on a regular interval has all kinds of well known motivational benefits. Sending these updates creates a strong personal accountability motivational loop that is worth the effort on its own.

2/ It’s de facto journaling. I’ve never been great at journaling but I found the process of writing, and reviewing previous updates as part of the writing process, to be quite therapeutic. You can actually meaningfully see your progress over time, how you have worked through challenges in the past, and how dang much you really have accomplished. This is invaluable when building a company can certainly at times be overwhelming.

3/ It’s a great call-to-action for new introductions. One of the big upsides of starting something new and interesting (a company or a fund) is that lots of people start to want to make introductions for you to other very interesting people. It could be to potential investors, or all kinds of awesome but hard to categorize folks. You have a good call with them but aren’t sure it’s time to make the “do you want to invest” ask. The best alternative I’ve found is “I writing a monthly very candid update for advisors and investors, could I add you to that?” It’s a great pitch and almost everybody will say yes, giving you the opportunity to build the relationship over time.

4/ Help advisors know how to pitch in. Most founders will be consistently surprised to learn how willing very busy, famous, successful folks are to help early-stage founders, but open-ended calls to “pick your brain” will quickly exhaust that resource. This format allows advisors to passively follow you progress until you make “an ask” that they feel they can be particularly helpful with, and gives them the opportunity to jump in. Use it.

5/ Build conviction with potential investors. Don’t write off potential investors that aren’t instantly blown away and scrambling for their check book at your first pitch. Many investors need to build conviction over time in the founders and business and following along as the team makes projections and then hits them, articulates their current challenges and then overcomes them, is a great way to do it. I like Mark Suster’s metaphor of “investing in lines not dots” but I also feel like founders’ time is too scarce a resource to continually keep chatting with potential investors. An introductory meeting + keeping them in the loop via monthly updates feels like an optimal approach.

Suggestions on what and how to write

Be candid but also don’t treat it like it’s a code word clearance email server. You definitely want to avoid turning it into a monthly cheerleading session where you just serve of the highlights and glossiest version of “update: still crushing it”… include personal struggles, low lights, and areas where you genuinely need help to get the most value out of the process.

Include real metrics to give readers context on the business. The feedback is different if you’re profitable with a team of 8 vs a solo founder still burning through your savings.

Make the list invite only and keep it relatively small (dozens of people at the most, not 100s). Again, be relatively transparent but assume there’s some chance that some of what you share may get out and that risk grows with the size of the list.

Make concrete asks for help “I’m looking for intros to customers that fit this profile”, “We are hiring a for [role], can you suggestion someone”, “Can someone with experience help me review this enterprise agreement”, “How does this metric benchmark for our stage of business?”

How we do it at Earnest

We use a tool called Visible, which is dedicated to exactly this process of investor updates. We ask all our portfolio companies to send a simple monthly update with 1/ Highlights for the month 2/ Low lights 3/ Asks & Where to Help 4/ Metrics, Graphs, KPIs.

The benefit of Visible is it syncs with your metrics tools like Stripe, Quickbooks, and Google Analytics, allowing you to easily pull in charts and graphs of the business in your updates. It’s helpful but you can also start with your existing email marketing tool or just a short list of folks you bcc.

I also maintain two lists for Earnest. I send a monthly update to our investors that follows a similar pattern to the above. I also write a “friend of the fund” letter here which includes less granular detail on portfolio companies and more thoughts on our investing strategy, other opportunities (like co-investing), and a different category of asks than those that I would put to our investors. This is pretty transparently a “nurturing” list for potential investors but it’s also proving to be valuable in it’s own right.

Lastly, when I meet a founder and I like what they’re doing but it feels a little too early I really love it if they add me to their monthly update (Yes, we have actually invested in companies this way… good question). To that end we have set up updates@earnestcapital.com as a dedicated team inbox for these if you would like to share yours with us.

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