Investor reporting & analytics

For many founders investor relations end with fresh capital reaching their bank account and then they go into hibernation. But often overlooked is how regular reporting is essential to keep existing investors engaged as well as close potential investors.

Many startups also find investor reporting burdensome. Often, they lack a system to easily prepare and distribute the necessary information and instead rely purely on 1-on-1 calls and regular meetings. This makes the process tedious and time-consuming. And it’s limited, you can only do that with so many investors, but a founder will reach out to over 100+ investors in a typical funding round.

To streamline this, we will discuss what you need to know and how to excel at investor reporting.

What is investor reporting?

Investor reporting is a crucial process for startups, serving as a formal method through which they communicate their progress, key updates, and performance metrics to their investors. This activity is not just about maintaining transparency; it’s a foundational aspect of nurturing trust and confidence between a startup and its investors. Typically conducted on a monthly or quarterly basis, these reports offer a snapshot of the company’s financial health, milestones achieved, challenges faced, and the strategic direction moving forward. The audience for these reports extends beyond current investors to potential future investors and multiplicators—key individuals or entities capable of disseminating information to a wider network of potential backers. This broad distribution helps in casting a wider net, attracting interest and investment from new sources while keeping existing stakeholders informed and engaged.

The process of investor reporting is multifaceted, tailored to address the varying needs and interests of its audience. For existing shareholders, startups often go the extra mile, arranging regular one-on-one meetings or calls. These personalized interactions provide a deeper dive into the company’s affairs, offering a platform for detailed discussions, feedback, and strategic advice. This level of engagement is crucial for reinforcing investor relationships, providing clarity, and addressing any concerns directly. It reflects the startup’s commitment to openness and its value of investor contributions, beyond just capital. Through effective investor reporting and communication, startups can foster a supportive investor base, vital for navigating the challenges of growth and scaling.

What is often included in an investor update?

  1. Ask: Let investors know where you need help and how they could support you.
  2. Achievements: Your most recent milestones and exciting news.
  3. Challenges: Showing investor you are aware of challenges and that you have a strategy to tackle them.
  4. Financials: Brief about your financial situation and how runway, revenues and costs are changing.
  5. Fundraising: Creating a FOMO effect by keeping investors updated on current and future fundraises as well as sharing milestones when it comes to fresh capital.
  6. TAM: Changes in the market, your business model or vision that affect your market size and enable you to unlock a larger market or a larger part of the existing market.
  7. Team: Key HR decisions, hirings or strategic shifts – highlighting the strength of your team.
  8. Technology: Updates on product development, new features, timelines and milestones.
  9. Timing: Highlighting relevant developments and changes that have an effect on your business and how you plan to tackle them or use them to your advantage.
  10. Traction: Sharing relevant KPIs and proving your growth.
  11. Other notes: Any other news or developments that you want to share with investors.

Why is reporting important?

Regular investor reports are indispensable for every startup. Keeping investors informed about new developments and successes of your startup is crucial. These updates in the form of reporting  not only establish trust but als enable investors to provide valuable advice, expertise, and networks that contribute to your firm’s success.

Keeping existing investors engaged

Investor reporting ensures that a transparent line of communication is maintained between the company and its shareholders. Informing existing investors about relevant updates is paramount to preserving their trust and support. Regular and detailed reports keep investors in the loop regarding the startup’s performance, strategic decisions, and future plans. This consistent flow of information helps in solidifying their confidence in the company, encouraging them to continue their support and potentially increase their investment. Such reporting ensures also that investors are not left in the dark about the challenges and successes the company faces, fostering a sense of involvement and partnership that is crucial for long-term engagement.

Transparency enables actionable insights

Transparency in reporting also plays a crucial role in enabling founders to better understand and navigate their company’s trajectory. By being clear and honest about the startup’s situation, founders are forced to confront the reality of their business, which can lead to more informed decision-making. This practice of introspection and external communication helps in identifying areas of strength and weakness, allowing for strategic adjustments that are aligned with the company’s goals and investor expectations. This level of openness not only builds trust but also equips founders with a clearer perspective on the right next steps for their startup, thereby guiding them toward sustainable growth and success.

Building trust with new investors

Furthermore, informing potential investors about the company’s progress and milestones is essential in building their confidence in the startup. By providing data-driven updates, startups can demonstrate their potential for growth and return on investment, gradually winning over skeptics and those on the fence. This process of nurturing potential investor relationships through consistent and factual reporting can eventually lead to securing new investments, expanding the company’s financial base, and driving its development forward.

Unlocking new opportunities

Lastly, investor reporting opens the door to new opportunities beyond immediate financial support. By sharing updates with a broader audience that includes potential investors and multiplicators, startups enhance their visibility within the investment community and related networks. This increased visibility can lead to word-of-mouth advocacy, where satisfied investors and intrigued potential backers talk about the startup to other investors and valuable contacts. Such organic spread of information can attract strategic partnerships, additional funding opportunities, and valuable industry connections. This aspect of investor reporting highlights its role not just in financial transparency but in building a supportive ecosystem around the startup, facilitating its journey towards innovation and market leadership

What is expected?

Regular investor reports and updates are indispensable for every startup. Keeping investors informed should be a must for any startup that has raised capital or planning to do so. And when it comes to reporting investors have certain expectations from you.

Consistency is essential

Founders are expected to be consistet. Investors seek regular updates to stay informed about the startup’s progress, financial health, and future plans. Sporadic communication or the absence of updates can lead to speculation and doubt, causing investors to question the startup’s stability, commitment to transparency, and regard for its stakeholders. Consistent reporting underscores the startup’s operational reliability and demonstrates a steadfast commitment to its investors, reinforcing their confidence in the company’s management and direction.

Clear and digestible data

Clarity in the communication of updates and data is another critical expectation from investors. They desire straightforward reports that quickly convey the necessary information without the need for sifting through convoluted narratives or excessive detail. The ability to provide clear, digestible updates not only respects the investors’ time but also facilitates the sharing of information within their networks. This clarity ensures that the essential highlights and metrics of the startup’s performance are easily accessible, allowing investors to efficiently assess progress and make informed decisions regarding their continued support.

Proactivity is expected

Proactivity in sharing updates is also a key expectation. Investors prefer not to have to request information, as doing so can signal a lack of initiative or transparency on the part of the startup. Regular, unprompted communication from the founders reflects a proactive approach to investor relations, showcasing the company’s commitment to openness and accountability. Startups that fail to initiate contact risk being perceived as unimportant or unreliable, leading potentially interested parties to disengage and redirect their attention and resources elsewhere. Proactive reporting is, therefore, essential in maintaining investor interest and support.

Don’t lie or make up information

Lastly, investors expect real, verifiable information. Transparency is non-negotiable; investors rely on accurate, honest data to evaluate the startup’s performance and prospects. Attempts to embellish the truth or withhold negative information can severely damage the trust between a startup and its investors. Moreover, disseminating false or misleading information can have serious legal implications for the company and its founders. Investors value integrity and accountability, and by meeting these expectations through genuine reporting, startups can fortify their relationships with their backers, ensuring a foundation of mutual respect and trust.

Issues & Challenges:

Founders can easily fall back to their status quo and make major mistakes in their communication with investors. The following issues are frequently happening inside startups.

What do investors want?

One common issue is uncertainty regarding what information to share. Founders may struggle to discern which details are most relevant and valuable to investors, leading to either overloading them with unnecessary data or omitting crucial insights. This uncertainty can stem from a lack of understanding of investors’ priorities or a fear of sharing sensitive or potentially discouraging information about the company’s performance.

Sweeping it under the carpet

Addressing the dilemma of reporting when the company isn’t performing well adds another layer of complexity to investor reporting. Founders might fear that sharing bad news will lead to diminished support or shaken confidence among their investors. This challenge requires navigating a delicate balance between transparency and optimism, ensuring that while the reality of the situation is communicated, a clear plan for improvement and turnaround is also presented. Dealing with a challenge well can even create more trust than a standard positive development. Founders must overcome the instinct to withhold negative information, recognizing that honest reporting during tough times can actually strengthen trust and encourage investors to offer support, advice, or connections that can help the company recover.

Why bother with reporting?

Many founders also view investor reporting as a burdensome obligation rather than a valuable tool for building relationships and support networks. This mindset, where founders wish for investors to simply provide funds and then remain uninvolved, undermines the potential benefits of active investor engagement. Such a perspective can prevent startups from leveraging their investor relationships for more than just capital, missing out on opportunities for mentorship, strategic advice, and network expansion that proactive reporting and communication can facilitate.

Under pressure reporting becomes irrelevant

The lack of a structured system for managing, preparing, and sending investor updates further complicates the issue. With the intense demands of running a startup, founders often prioritize immediate operational concerns over investor communication, leading to neglected reporting. This can result in infrequent, inconsistent updates that fail to effectively inform or engage investors. Implementing a streamlined process or utilizing tools designed for investor relations can help founders maintain regular communication without it feeling like an overwhelming addition to their workload.

No proper follow-up without insights

Finally, a lack of insights into investor engagement with the reports can leave founders questioning the impact of their efforts. Without knowing who has engaged with the updates and to what extent, it’s challenging to tailor follow-ups or understand which investors are most interested and supportive. This information is crucial for strategic relationship management, allowing founders to focus their attention on investors who show a genuine interest in the company’s progress and are more likely to provide valuable feedback, support, or further investment. Overcoming this challenge involves adopting platforms or methods that track engagement and facilitate more informed follow-up strategies.

investor update on DueDash platform

Benefits of DueDash

What is the best way now to start doing your investor updates and keeping all the above mentioned elements in mind? You don’t have to look far. DueDash provides complete investor reporting functionalities including usage analytics. Utilizing DueDash’s investor reporting functionalities offer several advantages:

  • Efficiency and time-saving: By centralizing the reporting process on DueDash, founders streamline their outreach efforts & regular updates. Our platform allows you to share your investor updates with inbuilt templates that can be published as well as scheduled for any investors you want to keep updated.
  • Template format for sharing updates: Founders can create investor reports using a predefined template of DueDash wherein you easily add relevant developments in a structured manner. For example updates on the 5T – Team, timing, traction, technology & TAM – which investors often want to see.
  • Detailed analytics: Founders gain access to comprehensive analytics, including which investors viewed their updates. You can track sent, delivered, opened, clicked, and commented data individually, thus getting all the data you need to make an informed decision on your next steps.
  • Prioritized investor follow-ups: This detailed data allows for a more targeted follow-up strategy, ensuring that you can prioritize follow-ups to the most engaged investors as well as enable you to follow-up with investors that disengaged after they seemed previously promising.
  • Enhanced outcomes with investors: The insights provided empower you to refine your strategy based on investor interests and feedback. This informed approach can significantly improve the chances of securing investment by grouping the investor & target new pipeline of investors.

How to use DueDash for investor reporting

It takes mere minutes to get started, upload your deck and start sharing!

Steps to share your updates via DueDash:

  1. Create your profile: Begin by setting up your DueDash account.
  2. Add investors: Upload either individually or via CSV upload all investors you want to update in your contact management. You can also categroize them into groups like “Shareholders” and “Potential investors.” In addition, if you share your DueDash profile with your public profile link you will have received visitors with their email, which you can also add to your reporting group.
  3. Create update: Easily create your report with the DueDash template.
  4. Send out update: Decide who should receive the update and send it or schedule it.
  5. Monitor investor engagement: As investors begin viewing your published updates, DueDash provides real-time analytics on their engagement. You’ll receive data about who is viewing your updates, information on opened, clicked and commented and you can also compare their engagement across multiple updates.

Start sending your next investor update today!

Now that you know everything about sending regular updates to investors DueDash offers you the ability to update investors using our block builder and send out regular reporting. Login into your DueDash account or signup to get started and send investors one of the best updates they have ever seen!