The Ultimate Guide to Writing an Investor Update: Templates for E-Commerce and SaaS Businesses

As your business grows, so do the challenges that add up faster than you expect – it becomes harder to manage communications and maintain transparency across all stakeholders. Things change rather quickly and both you and your investors need regular updates on recent  highlights and lowlights in order to keep up with the developments and tailor strategies to fit the needs and goals. Keeping all of those people informed while also protecting sensitive information is a difficult balancing act. Fortunately, there’s an easy way to tackle this challenge: investor updates. 

Sending investor updates is a good way to build trust and confidence with the people who back your business, as well as evaluate where your company is at a given point in time. However, writing a great investor update is quite a challenge as you need to make sure that you’ve included all major points and provided enough information without overloading your investors, and managed to do so in a concise manner.

In this article, we’ll discuss what an investor update is, cover what you should include and leave out while writing it, and discuss why writing a good investor update is crucial for any investor-backed business. We’ll also provide you with some simple and comprehensive investor update templates that will help you streamline your communication with investors. You’ll understand what information and metrics to share, how to ask for help, share ups and downs, as well as raise additional funding, if needed. Ready? Time to get started!

Contents:

1. What is an investor update?

2. Why use an investor update?

3. What goes into an investor update?

4. When should you send investor updates?

5. Writing the perfect investor update: Investor update tips to live by

6. Writing to investors with Synder: Your ultimate templates

What is an investor update?

Fundamentally, an investor update is a document that provides information on the progress of a new business or existing company, typically over the last month or quarter. It’s essentially an overview of a business that provides clarity on how the business is doing – financial information, recent news from the company, how the investor money is being spent, and anything else that can be useful to investors.

Download Synder’s investor update template for e-commerce businesses to simplify the way you update your investors! 

Why use an investor update?

There are plenty of reasons why a company might want to share its performance with investors. For instance, if the company is trying to raise capital or simply wants to maintain a good reputation among potential investors, it’s probably a good idea to keep them informed about the state of things. An investor update lets you share information about your business in an organized and concise way so that potential investors can see exactly how your company is doing.

Investor updates are also essential for communicating important company updates to investors who have already invested in you. It’s the best way to keep everyone informed on the progress of the company while also meeting regulatory requirements. 

Investor updates are a great way to build trust with your investors and earn their support. If they see that you’re transparent and keep them informed with regular updates, they’ll feel more confident in your ability to deliver a successful product or service. 

What goes into an investor update?

Before you begin writing your investor update, you need to make sure that you have all the relevant data in front of you so you know what to include. Bear in mind that your investors would want to have a clear understanding of your company’s trajectory without reading lengthy reports. Just like you, investors are busy, so try to be concise while providing updates.

Here’s a list of all the important components of an investor update.

Note: These sections are optional and may be either combined or excluded in order to fit a company’s needs.

Overview and a short message from founders

This is a section that provides some general information about your company and its progress. Typically, it serves as an introduction and may include an overview of the industry, some brief updates, and should prepare investors for what to expect. Note that this section should be short.

Recent Company news and events

This is the section where you want to put the most recent news from the company. This is where you talk about important partnerships or developments within the company - this can be anything from a new hire to an exciting new feature or product that’s going to be launched. The events section of your investor update is also a good place to put any upcoming events that the company will be attending. This way, investors can see that your team is active in your industry and that you’re engaged with other players.

Performance

This is a broader section that may encompass information regarding the product, traction and major financial metrics. 

Product

Here you’d want to share recent progress with your product - updates on integrations, launches, or any other changes affecting your offerings. Investors must know what’s happening and what directions your team has chosen to take in developing your product.

Traction

Traction is usually defined as the progress of a company and it shows the level of exposure or acceptance it has achieved in the market. Basically, good traction means that your product or service is viable, and that you’re making progress towards achieving your short-term and long-term goals. 

Traction can be measured in many different ways, but most often it comprises profitability and revenues, online traffic and engagement, user and employee count.   

Financial metrics

Financial metrics are a tricky part, as there are many indicators and different investors may want to have different data. It’s better to discuss what kind of key metrics you need to list beforehand and be consistent with sharing them each month, quarter, or any other period of time. In general, you share what you track on a regular basis.

Runway

Runway represents how long your business can survive without revenue before you run out of money. The amount of time is usually reflected in months. With runway, it’s easy to see how long you have to become profitable or acquire funding. To calculate runway, you need to divide your total cash or cash in bank by burn rate.

Cash in bank

This one’s easy - how much you’ve got on your balance.

Burn rate

Burn rate indicates how fast your company uses its cash - the investors’ money in particular. You subtract the ending balance from the starting balance and divide it by the number of months.

Revenue

Generating revenue is one of the most visible signs of progress for any business. Some companies include ARR (annual recurring revenue - the amount of money a business can earn every year from its subscribers), others opt for MRR (monthly recurring revenue - the revenue a business can generate from its active subscriptions in a single month). 

Churn rate

Churn rate is a rate at which a business loses its customers over a certain period. Basically, it represents how much business you've lost within a certain period because users unsubscribed or stopped buying your product. The easiest way to calculate your churn rate is to divide your churned customers by the total number of customers.

CAC

CAC, or customer acquisition cost, shows how much money you’ve spent to acquire a customer over a given period. 

Note: The metrics mentioned above are just the most frequent ones featured in investor updates. Depending on your industry, stage, and investor preferences, the list can be changed.

Highlights and lowlights

As a founder, you need to understand how important sharing both wins and losses is. Investors want you to succeed, but they need to have a clear picture of your company.

On the one hand, sharing your company’s accomplishments shows what and how you’ve managed to achieve. They indicate where your strengths are as well as how reliable and successful the investment is. 

On the other hand, sharing bad news alerts your investors about the troubles your company is facing. However, sharing problems is also a good way to show how you’re coping with issues and how capable your team is of finding solutions. Your investors will undoubtedly step in and offer some support and guidance in order to fix the situation, and your honesty and transparency in reporting your problems will help you build trust and strengthen your relationship.

Remember that you need to be transparent while writing investor updates. If your investors don’t know the real state of your company, they won’t be able to help. Moreover, knowing that you may withhold data, they may decide to drop your company in the future.

Needs

Laying out the needs is the last section of an investor update. This is the part where you ask your investors for a specific kind of support - be it assistance, referrals, or funding. Now that they see the data and know what you’re doing and what challenges you’re facing, don’t be afraid to seek advice on management, ask for recommendations on new hires and important introductions, and urge them to participate in a new round of funding. That’s a great opportunity to take advantage of your investors’ industry experiences, wide network, funding capital, and available resources.  

Shoutouts

Last, but certainly not least, don’t forget to thank your investors for their recent help - be it something small like a recommendation, or something major like referring a big client. After all, we’re all people and want our contribution to be recognized.

When should you send investor updates?

Sending regular investor updates builds and nurtures trust between your company and investors. When you update them on a regular basis via email, for example, they see how serious you are about their time and investment, and how professional the management is. However, how often should you share these updates? The answer to this question depends on what kind of investors you have in mind: potential or current. 

Sending investor updates to potential investors

The best time to send investor updates is when you’re closing a new investment round or if you’re planning on doing another one in the future. At this point, in case there’s further interest, you should have a well-prepared pitch deck at hand. Missing an investment opportunity because of lack of preparation or timing might cost you your business.

The tricky part is knowing when exactly to send the update. If you send it too early, your potential investors may feel that you’re trying to pressure them into investing. On the other hand, if you send the update too late, your investors may feel as though you’re not being transparent. 

There’s no exact formula for when you should send updates to your potential investors. It really depends on the situation and how quickly your investment round is progressing. The goal here is to attract interest to your company and raise funds to fuel your efforts. 

Sending investor updates to current investors

The rule of thumb regarding sending an investor update email to your current investors is to do so on a monthly basis. Once a month is a reasonable interval giving you a chance to keep them informed about your work and assure them that their money is well-spent. 

During early stages, things change pretty quickly. You might even want to share weekly investor updates in order to get much needed advice, recommendation or introduction faster. Sending updates once a week will accelerate establishing the relationship, especially if your investors are actively involved in your work.  

If your company is in series C or D, the changes might not be as drastic as in the early stages. In such cases, you might opt for quarterly investor updates. However, bear in mind that it might have a negative side - your investors might not remember details as they usually have other startups that pitch at the same time. Your email may get lost among other updates.

Receiving regular data featuring both ups and downs of a company is the key to open conversation and timely support and help.

Writing the perfect investor update: Investor update tips to live by

While all startups enjoy equity of access to their investors, some updates attract more attention than others. This is when creating an investor update template can help. Writing the perfect investor update isn’t easy - there are lots of things to consider. We’ve gathered some useful tips that will help you create a template that your investors will like. 

Be concise and considerate

Chances are that your investors have to go through lots of investor updates each month. A lengthy rambling email just won’t get the attention you crave for. Be brief, provide only necessary details and structure your template appropriately - use subheadings and bullet points to make it easy to scan. This way your investor update won’t fall off the radar. 

Be honest and specific

Don’t hide information and provide real numbers and metrics. If there’s something that you don’t like but you feel that it can affect your performance in the future - share it. Unpleasant surprises make people lose trust, and for a good reason: if you’re hiding something, you’re not reliable.

Whenever you need help - ask for it specifically. Hinting and beating around the bush won’t get you far. One of the reasons you communicate with your investors on a regular basis is that you can get some assistance and overcome challenges faster. Don’t miss this opportunity, use it well.

Be consistent with presenting metrics

Pick the metrics your investors like to know about and share them in each email. Picking the best metrics and changing them from month to month won’t provide a clear picture of your business. Technically, it’s not lying, but it has a similar implication.  

Be consistent with the format of your updates

Choose a format that best fits your company - be it an email, presentation or plain Word document, and stick to it. Changing formats won’t play to your advantage. 

Commit to a cadence

Decide on the frequency of your updates. Investor update emails are only good if they’re regular - weekly, monthly, or quarterly. Pick the time period depending on your needs and stage, and timely share the results of your work.

Writing to investors with Synder: Your ultimate templates

Since writing an investor update is an integral part of any aspiring startup, having an investor update template to fill in each month will save you quite a bit of time. But what if we told you that you can not only get the free investor update template but also fill it out with Synder?

Combining the best from strategy and technology, Synder Insights provides straightforward analytics and reports based on the raw data coming from all your connected platforms - something that sounds just right when you need to complete the info in your template. 

The tool provides you with 40+ basic sales, product and customer KPIs and metrics that allow you to have a better understanding and control over your growth and save time on using third-party apps to calculate the metrics for your investor updates. All of it in a single source of truth for your business with 25+ integrations available at no extra cost. Book a demo with Synder’s knowledgeable specialists to see how Synder Insights can help your startup make better decisions!

As the metrics may differ for each type of business, we’ve prepared templates for SaaS and e-commerce businesses, highlighting their specific needs. The best part is - you can fill out the said templates with Synder Insights in a matter of minutes!

Investor update template for e-commerce businesses

E-commerce businesses have to deal with lots of data and analyzing it may become a problem unless you have the right solution for the job. Thankfully, Synder Insights can take this load off e-com business owners and provide them with both common performance indicators and some specific measurements that matter for digital sales.

The first thing any investor wants to know about is how much money a business has at a given moment and how quickly and effectively this money is spent. Indicate cash, burn rate and runway, and don’t forget to submit revenue and gross margin data. With financial information like that investors can see whether your startup is performing well in terms of sales and overall profitability.

While financials are the core parameters to report, don’t underestimate the importance of customers. Such measurements as the number of customers, customer retention rate, bounce rate, as well as LTV, AOV and CAC will hint at how viable your e-commerce business is and how likely it is to succeed. Not only will you be able to evaluate the effectiveness of your business decisions, but you’ll also demonstrate feasibility of further investment.

Note: Check out what else Synder can offer e-commerce businesses here.

Investor update template for SaaS businesses

Most SaaS businesses are volatile and it’s very hard to predict their revenue growth. The SaaS business model differs from all other industries in the way that it relies on small amounts of recurring revenue that a business gets incrementally. 

What matters here is one small sale at a time, that’s why the metrics you’d like to track and present to your investors should also reflect the management of subscriptions. Leveraging customer success and the number of subscriptions becomes paramount.

Along with more traditional business models which track revenues, runway and cash, Synder suggests monitoring customer experience - the number of website visits, registered/active users, churn rate. Add to your email other customer metrics - LTV, CAC that reflect customer behavior and how much you spend to acquire a subscription. These KPIs will give a snapshot of your startup and provide investors with all the necessary data.

Download Synder’s investor update template for SaaS businesses that you can fill out with Synder Insights in a matter of minutes! 

Note: Check out what else Synder can offer SaaS businesses here.

Conclusion to writing an investor update

An ideal investor update template is concise, informative and straightforward. But what’s more important, it’s timely. When you have a template, investor update emails are a breeze and bring value both to you and your investors - they act as milestones for the whole team and keep the investors in the loop on what’s going on. With the right software, gathering metrics and filling them out don’t take too much time.

An investor update is more than just a status update; it’s a strategic communication tool that can help you nurture relationships with your investors and make your efforts visible to them. These relationships must be based on trust and transparency - when you’re honest and consistent in presenting data, actively and proactively seek assistance, and never shy away from challenges, your investors are open to sharing their knowledge, network and resources.