A investor update is a communication that provides your investors with key information about the company’s progress. It can include financials, growth metrics, new hires, product developments, and more. It should be clearly structured and concise. Ideally, you should handle all aspects of creating the investor update (including formatting) internally, rather than outsourcing it to a third party. Investors receive multiple investor updates every month, and the quickest way to lose their attention is to overload them with information that’s difficult to understand or digest.

Investors are most interested in understanding how you’re growing your business and what the economic conditions are like. For that reason, most investor updates follow a similar format: overview, performance, economics, and needs. The first section, the overview, provides a quick snapshot of your company’s health and highlights the main points that you want to highlight in each update. For example, you might share a chart of your net new MRR or a list of your top revenue generators. Keep the charts consistent so that your investors can easily compare results over time.

Sharing the good and bad is essential for building trust with your investors. It can be tempting to only share the good news, but your investors know that it’s more common for startups to fail than succeed. Ignoring investors when things are not going well can alienate them and make it harder to secure future funding. On the other hand, being transparent in investor updates can encourage them to tap into their networks to help you through a rough patch.