Editor’s note: Joe Procopio is the founder of teachingstartup.com. His columns appear on Tuesdays. This post is the first of three in a series focusing on funding. Joe has a long entrepreneurial history in the Triangle that includes Spiffy, Automated Insights, and ExitEvent. More info at joeprocopio.com.

DURHAM – Let’s talk about crafting the perfect investor update. And more importantly, how to get them to respond.

I’ve written a few times about the need to build relationships with investors to maximize our chances for funding. And the best way to build that relationship, oftentimes the only way, is through a monthly progress update we email to current and potential investors, advisors, and any other influential individual kind enough to skim it before it hits their trash box.

Photo courtesy of Joe Procopio

Joe Procopio

Every startup is different, and there is no single template for an investor update email. But I’ve learned that there are a few rules that you have to follow to get them to read it.

Put Yourself In the Investor’s Shoes

This is a must-follow rule for any communication, but especially true with the investor update. As entrepreneurs, we need to flip the mental switch from “what do I want to say” to “what do they need to know.”

Think about it this way. Are you spending 10% of your time and money working on your startup? Probably not — unless you’re part-time, and if so, good for you, keep rocking. But more than likely, you’re giving this thing everything you’ve got.

What we entrepreneurs tend to overlook is that the same is true of the investors we’re trying to pitch. They’re not playing with mad money. They’re all in — and the future of their firm, their career, and their livelihood depends upon the success of their investments. Yes, they take risks. But those are calculated risks.

So we need to give them the facts to start making those calculations. That said, here are a few attributes of your startup that don’t go into those calculations:

  • How big the return will be at exit. They’ll do their own math. They love math.
  • The growth of the brand. Brands aren’t investable until they’ve already generated sick amounts of money.
  • Customer experience. It’s nice to touch on glowing reviews from important customers, but an investable company should have nothing but glowing reviews from all customers. This is just filler.
  • Potential. Everyone has potential.

The Overview: Be Brief

The opening sentence of your investor update must include all of the following:

  • An executive summary.
  • A reason to keep reading.
  • A taste of your personality and confidence as it relates to your leadership.

That’s not an easy thing to do in one sentence, but don’t sweat too much over the last one. What I don’t want you to do is get cute. The investor update is not a personal letter, it’s not a marketing tool, and it’s not a cover letter for a job application.

Don’t small talk it. Don’t talk about how busy you’ve been. Don’t lead with an anecdote. In fact, don’t include any anecdotes at all. Don’t use adjectives to describe your progress, use metrics.

Once you’ve written that opening sentence, you’ll want to get into the progress part of the progress update. In general terms, you’ll need to communicate:

  • Progress, and how that compares to expectations. What happened this month? How is the quarter shaping up? What does the year look like?
  • Challenges, and what you’re doing to mitigate them. If it’s not a new challenge, how are your mitigation plans working?
  • Plans, with numbers whenever possible. How do those plans directly address your goals and milestones?

Simple enough, right? Let’s break it down.

Prioritize Traction

I asked a few early stage investor friends what they prioritized most in an update email.

“I am usually looking for news about new customer development. New customer acquisition is usually the best indicator of future growth potential for startups.” — Mark Easley, angel investor.

“What I typically want to see is growth, relative upward movement from month to month, quarter to quarter, etc., on the metrics that are important for that company. They vary from company to company of course, but typically users, revenue, margins, lower churn, etc.” — Lister Delgado, Managing Partner, IDEA Fund Ventures

“Investors love to see traction.” — David Gardner, Founder and Managing Partner, Cofounders Capital

See the pattern there?


State the number of new customer acquisitions, and highlight important customers and large deal sizes. If you have revenue, break it down for the month and also state how that month fits into the quarter and year.

Then for customers, revenue, and any other important metric, show how this month’s numbers fit into the growth picture, month over month, quarter over quarter, and year over year. Also compare them to goals and milestones, and what you believe caused any overachievement or underachievement.


Missing expectations for one month is a blip, missing two months is a challenge. Even if everything is running better than expected, it always helps to identify what your current and future challenges are and how you are planning to attack them. The key is to do this numerically, as it relates to traction.

If churn is still high, what are the plans to bring it down? If you’re not hitting customer and revenue goals, don’t just tell them you were wrong, but how you were wrong and what you’re going to do to fix it.


There are two sections of plans in terms of getting to traction. What does the customer pipeline look like? And what does the product pipeline look like?

The customer pipeline is just like the progress section, only looking ahead instead of looking back. How many potential customers are in the pipeline? How many do you plan to close this month, this quarter, this year? How does that relate to the past?

The product pipeline includes the highlights of the product roadmap plus any sales and marketing initiatives. This section can also include potential partnerships where discussions are underway. Again, the goal here is to address traction. How will these undertakings change your growth outlook?

Don’t Hide From Failure

Before when I said you have to ask yourself “what do they need to know,” please understand that it’s not “what do I want them to hear.”

Don’t hide from, gloss over, or otherwise paint a rosy picture around failures, missed expectations, and general bad breaks. These things happen. And it’s how you handle things going wrong that speaks to strengths and weaknesses.

Gardner says, “I try to weigh that against what the entrepreneur has had to work with. What has he or she accomplished with the resources they had?”

Every problem has a solution, every failure has a lesson. Traction isn’t about rocketing to success, it’s about the numbers going up and to the right, even when in the short term those numbers go down or flatten out.

Track It

This is almost an aside, but it’s huge. Don’t just blind copy a bunch of people in a Gmail. Sign up for one of the free mass email providers like MailChimp.

Don’t get fancy, make it look like a regular email. But a mass emailer gives you data — how many opened the email, how many clicked the links. You can sort and review all your data and you can figure out who is paying the most attention.

For better and for worse, it also allows your recipients to unsubscribe themselves. This is actually a good thing. There is no sense wasting your time updating someone who is not a fit.

Ask. For. Help.

So let’s get back to the sneaky reason we entrepreneurs send these monthly emails in the first place.

It’s to get them to hit reply.

I’m shocked whenever I get an update email that doesn’t ask me to reply back with some kind of context. In fact, you should do everything in your power to make these updates interactive. Ask questions, ask for suggestions, ask for feedback, reply to how you’re addressing that feedback publicly.

Eventually, some of the folks on your list will indeed hit reply, and break off into their own threads. Those threads are just as important to keep up with as the monthly update, because each time someone responds to one of your emails, you’ve got a chance to build a better relationship.