Communicating effectively with investors is an important job that any CEO faces.Given today’s excitement over seed investing, it is not unusual to have 5 – 15 investors in any given round.
Thus, keeping everyone up-to-date but also knowing how to get help when needed and from whom, is a complex operation. If you do it right, they will give you major value add without taking up too much of your time.
When a new CEO for one of our portfolio companies was hired, we wanted to help him streamline information so that he would have time to run his business. We worked with him to put together a weekly email to provide us with the key metrics the company tracked along with departmental updates on key high priority projects. We weren’t asking the company to create something they shouldn’t already have (key metrics, departmental priorities, cash balance) but rather we just wanted the data shared on a timely basis.
The benefit of this was that when we did speak with the management team we did not have to spend half an hour gathering information. We could get right to the point and actually discuss the whys or hows on certain sales numbers, metrics, or prospects.
Over the past six months I have made a number of seed investments and have shared this system with them. Each CEO tweaks it a little, but it should give you a sense of what investors may be looking for and how to extract value from your investors.
If you choose to update weekly then obviously it will most likely be a shorter piece with maybe only the cash burned and current cash on hand as the financials. If you choose to send out a report monthly then it may be more like the form I have uploaded on docstoc.
Ed Sim is a founder and managing director at NY-based Dawntreader Ventures. He is also founder of BOLDstart Ventures. This article originally appeared at Beyond VC and is republished here with permission.
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