Investor Updates: The Dos and Don'ts of Crafting Effective Updates

SDS 012: Clarifying Investor Updates

Hey! thank you for reading issue 012 of Startup Definition Sunday (SDS).

SDS is the newsletter for founders, bringing you clarity one actionable tip at a time.

SDS arrives every two weeks (you guessed it) on Sundays.

In every issue you can expect:

• 1 Definition of startup jargon

• 1 actionable tip you can implement right away

• 1 article on Africa tech that you should read

• 1 gift for founders

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Hi - It's always such a pleasure to share each issue with you! If you missed the last issue, you can check it out here.

Before we dive into today's issue, Marge and I started something we think could be useful for founders - bi-weekly office hours to practice your 5-minute pitch.

If you missed the most recent session, you can catch the recording here.

We are back in two weeks. Register to join us if you want to practice your 5-minute pitch or you have a challenge on your founder journey.

Let's dive into today's issue.

On Saturday, I wrote a twitter thread on the elements to include if you want your updates to make an impact on investors.

In this edition, we'll be discussing investor updates and the common mistakes early-stage startups often make when crafting them.

What is an investor update?

Investor update: a regular report that you send to your investors to keep them informed about your startup’s progress and performance.

Why is an investor update important?

In an environment where funding rounds are taking longer, it can be difficult to remain top-of-mind for investors.

These updates allow you to achieve two main things:

• Remind investors of what you are building and why it is important

• Showcase the progress of your startup in reaching important milestones

So, what are some mistakes to avoid when crafting an investor update?

Mistakes to avoid when crafting an investor update 

1. Lack of consistency: Inconsistent updates make it difficult for investors to track your startup's progress over time and can limit their engagement with your company. To avoid this, set a regular update schedule and stick to it. Use the same format for each update, set clear objectives, and include progress on key metrics and achievements from the previous period.

2. Lack of localization: Updates that don’t take into account the prevailing macro-economic and social context of the African market can be unengaging and ineffective. To avoid this, ensure that your updates are tailored to the specific local market(s) in which you operate. Highlight any relevant industry trends or regulatory developments that may impact your startup.

3. Lack of data visualization: Updates that don’t incorporate visual aids like graphs, charts or infographics can miss the opportunity to convey complex data in a more engaging and understandable way. To avoid this, make use of data visualization tools to present your data in a clear and concise way. This will help investors to better understand your startup’s performance and growth potential.

4. Lack of a clear call-to-action: Many founders fail to include a clear call-to-action for investors in their investor update. Unfortunately, this means many founders are unable to unlock the “value add” that investors promise. To avoid this, be sure to clearly state what you’re looking for from investors in each update. This could be anything from a request for strategic feedback, a call to invest or invitation to connect with the team at an event.

5. Lack of focus: Updates that are too broad or unfocused can confuse investors and give the impression that the founders don’t have a clear strategy. To avoid this, stick to the key metrics and achievements that matter most. Focus on the most important developments in your startup’s growth, and be sure to highlight any major milestones that you’ve reached.

Crafting effective investor updates is as much science as it is art. In the current fundraising environment, leveraging investor updates effectively can increase your startup’s profile and unlock the right support you need to grow. Improve your investor updates using these two templates

If you have learned something valuable today, consider joining SDS so you don't miss future editions.

If you only read one thing this week, read this...

Joseph-Albert from Tech Nova GH wrote a great snapshot the growth of the tech startup ecosystem in Cote d’Ivoire.

Here's why you should read it: Francophone West Africa has historically been ignored in the Africa tech investing conversation but that is beginning to change. This article is a good amuse-bouche for people interested in exploring what opportunities could look like in Francophone West Africa.

Founder's Corner

Let's get real for a second: raising a round in 2023 is beginning to sound like going outside in mid-2020 - everyone is advising you against it. Unfortunately, unlike missing weekly drinks with your friends, you can't just pause on the fundraising.

The team at Africa The Big Deal have been curating a database of investors that have done deals in Africa since 2019.

It costs a fraction what you will pay for Crunchbase or Pitchbook BUT the team has offered a 10% discount for subscribers of SDS. Grab it here (and tell a friend!) to help you target investors in your sweet spot.

Thank you for reading to the end of issue 011.

Until we meet again in two weeks, here's how we can stay in touch:

• 🐦 Find me on Twitter 

• 💬 Hit me up on LinkedIn

• 💌 Email (hit reply)

• 🚀 Sponsor SDS (Reply to this email)

Let's chat again in two weeks,

Jasiel

P.S I am revamping my newsletters referral program after some helpful feedback from readers. I need your help on this:

What makes you excited to refer a newsletter to your friends & family?