Founder of Angel Squad | I teach professionals how to invest in startups with help from seasoned VC investors | Investor & Advisor
Here’s a secret for founders: Send “investor updates” even before you have any investors. The audience can be anyone you have an existing relationship with who you think might be interested in investing. Investors like to “invest in lines not dots.” Meaning, they like to see how you operate instead of one or two pitch meetings and then investing. Not only is this an exercise that’s useful to your investors, but sending regular updates also benefits you as a founder. Regular investor updates allow you to take a step back from the day-to-day minutia and reflect on trends, opportunities and struggles over the past month or quarter. It’s a necessary reflection when every day may feel like you’re putting out fires.
Love this, Brian. "Lines not dots" what a super simple way to characterize the importance of building relationships before and after an investment event. It's all about trust and confidence; dots can't do that.
Mohit Srivastava
8mo
I love this approach, Brian Nichols! It's like giving your business a voice that speaks directly to potential investors. It turns the journey into a story worth investing in. Plus, it keeps you honest about your own progress and challenges. Super smart!
If you're worried it'll come off as too sales-y to potential investors just call it "building in public". That way you're not just courting investors you're fostering a sense of community with other founders.
Evaldas Girskus
8mo
Don't be like that one Founder who sent an update after 2 years admitting his startup has failed.
Nadia Lizarazu
8mo
Thanks for sharing, this is really helpful! My next thought is what do these updates entail. What specific insights can we share without getting too deep into all the nitty-gritty details of brand campaigns and operations?
Sam Betts
8mo
The best performers from my experience have also sent regular updates. Quarterly, half yearly, or annualy. Is it a trait of successful founders? Probably, regular updates force you to evaluate the good and the bad and keep you accountable. What gets measured improves, a saying that might hold true here. If things arnt going well, dont delay tell the investors, they may be abble to help.
Shay K.
8mo
Point well made. It also a much more favourable approach to the company success rates, as the investsing side can usually offer support other than financial. Furthermore, and perhaps the main point of it all, you don't live and die with your brands. Since you will need to keep going in the same industry and build YOUR network, it is not wise to keep people around you stressing or guessing - Reporting builds trust, even (perhaps especially) when reporting an unexpected issue.
Barron Ernst
8mo
I love this idea - it's also something that is valuable to attract potential investors as well. And it builds a strong practice that will serve you well later.
Yes! Due diligence is mainly done on the process and how a founder deals with the process, even if investors pass on a round, they're interested to see how a founder navigates the process of communicating with an investor, because it shows how the founder works. Couldn't be more true: "investors invest in lines, not dots" 😁
Hand-Picked Founder & Investor Intros • 28Yrs in Startups (Zero→£Mil ARR, Twice)
8moSo few founders send regular updates Brian Nichols. I've never got it, why would you take someone's money and then not keep them updated?