Investors, We are raising a $1.5M current funding round. This is going to be a convertible note with a $5.5MM Valuation Cap and a 20% discount. The interest rate on the note is 7.5% and has a maturity date of February 1st, 2018. The triggering event will happen when we raise $600K into a Series A round which we will start going after next fall. In the mean time, we would like to open this round to our current investors and offer 20% warrant coverage on the note. Please PM me if you'd like to learn more. We've attached a pitch deck for your review and kindly ask that you consider helping us scale our venture.

Attachment: AngelLoop_PitchDeck.pdf

Why are Investor Updates so important?

(If you don't need background, go directly to the template ).

Good investors help their startups. Great investors don't interfere with their startups and are invaluable when founders ask for help.

The primary reason you should send frequent updates to your investors is to solicit their help in critical areas to improve your business. Key things to know:

1. Your updates can go out to more than just your investors. Where it makes sense include your investors, advisors, and friends of the company (some information should be kept to certain groups).
2. Updates are meant to keep your company top of mind in the people who are supposed to help you. People get distracted all the time and will forget about you. Try to add something fun (meme, anecdote, something personal) that you'll look forward to people reading.
3. The more specific your asks are the more likely you will receive help. Introductions to specific people or companies are better than generic requests for deal / business flow.
4. Padding your stats is _not_ the goal of your updates. Being pragmatic, transparent, and simple in your updates means you're shooting straight. Focus on that and the better your fortunes will be.
5. Make your updates brief and easily digestible with numbers and bullet points. I think longer updates are great if I have time, but if I can quickly help / get the information I need I am more likely to act.
6. Your updates also encourages accountability and forces you to think through (and write) your goals.

Don't underestimate the power of your friends and their friends. Your ability to communicate both externally and internally will be the difference in having meaningful outcomes and not.

What are the key elements to an effective update?

No single template fits all situations. Evolve the template based on feedback, questions and your style. With that said, here's the core areas I think you should address:

Introduction

Say hello and set the tone for your reader. If it's important you should directly email / call your investor or use the subject line to say it's urgent.

Vitals

Like a human body a business has vital signs that help us know if something is going on (good or bad). I've taken this monicker from a friend of mine who puts lists key metrics for an 'at a glance' shot of the company. Those metrics might include (but shouldn't be limited to):

• Cash remaining in bank.
• Approx. date out of cash (and approx. monthly burn rate)
• Specific metrics like usage rate over time to capture health of business / product
• Revenues (w/ month over month delta)

Choosing the right metrics to share, and focus on is how you win. The more you understand your growth engine the faster your business can expand. When you're a smaller company focus on figuring why customers go crazy for your product.

Lowlights

It's good to get the bad news out first. You should call out just 3-5 of the top issues you face. Examples:

• What's not working product or marketing-wise
• Letting employees go, or working through other issues.
• Running out of money
• Drop in SEO due to app name change, and it's negative impacts
• Anything that has gone wrong that others should know about (and might offer help)

Highlights

Celebrate your accomplishments. Small wins precede big wins. Don't forget that.

• New hires or awesome business partnerships
• Winning any type of contest, award, or rating
• New revenue targets you hit (or even conversion rates)
• Launches of features, products, or press (include easy to reshare tweet / fb / G+ posts)
• Anything that makes you feel better about the progress of your company.

Your milestones should be meaningful to the business; general progress is expected by default (don't list that).

Asks

This is by far the most important section and you should always call it out in some way so people do not skim it.

• Specific introductions to people with business purpose.
• Help closing a business deal or a potential hire (great investors / advisors are great at this)
• Evaluating a business model or helping define one
• Beta testing your product or providing light feedback
• Helping to promote a launch through social channels
• Assisting in acquisition talks or finding other resources (lawyers and such)

Your asks are indicative of how well you understand what you need to make your business successful. You'll always be asking for something (nobody builds a great company alone).

One of my friend's also leads his investor updates with a thanks to investors who have helped since the previous update. He specifically calls out the person and how they helped which motivates others to be useful.

Common Pitfalls & Questions

How often should I send out updates?

What if I don't have anything new to update?

What if things are bad, and I'm afraid of letting this news go public?

I don't have any investors, should I be sending updates?..

How often should I send out updates?

Personally I think once a month is a reasonable frequency that also shouldn't be a burden to the founders. If you can't spend half a day a month assessing your company -- that's a separate problem. If your investors are starting to contact you to check-in you are probably not giving updates frequently enough.

What if I don't have anything new to update?

Highly unlikely! It's always good to reiterate your strategy, resend key metrics, and what your immediate term goals are so people can help you where necessary (or even tell you to hurry up and get off your butt). Staying top of mind doesn't require anything new.

What if things are bad, and I'm afraid of letting this news go public?

You should be sending your updates to people you really trust and have your best interests in mind. At the end of the day I think it's important to know that bad news in the hands of your friends is one of the best ways to turn things around since they can help you. Going to the grave with bad news in the bag still lands you in the grave.

I don't have any investors, should I be sending updates?

Yes. You have friends and family who care about you and want to be involved (or at least informed). They could be your biggest champions when times are tough. [Excerpt from Xander : Did you know that Kanye West's Mom introduced him to NO ID (Executive VP of Def Jam Records) in Chicago when Kanye was just getting started? She was his biggest fan because he kept her involved.]

Resources

Awesome Emails Blog

Xander and My take on writing emails (Basic, so if you're an expert don't waste your time).

Investor Update

I'll be using a fictional company 'Quorum' to base this update on. I've written a sample update that has elements from real updates sent to me by first class entrepreneurs.

To: investors@quorum.co , advisors@quorum.co

CC: founders@quorum.co

Subject: July 2013 Quorum Investor Update

Body:

Howdy Quorum Investors,

Happy 4th of July to the Americans. We've been making steady progress on some key fronts that I'm excited to share with you.

We've closed our funding round, finally. Thank you. Please retweet the article ! We're looking to grow our name in the valley for partnerships and close some key hires we've been pursuing.

_VITALS_

Cash Remaining: 890k

Out of Cash: December 2015

LowLights

• In the latest app update we made changes to the description and bombed our app store SEO. We've made fixes but still need to improve ranking.
• We had to let go of our marketing lead due to poor work and communication but have hired a new one (see below).
• We're no longer eligible for the free startup promotion from Rackspace since we've taken on major capital so our hosting expenses have gone up.

_HIGHLIGHTS_

• We won Best Hyperlocal Anonymous Media Consumption App at E27! We got a 50k grant from their parent company.
• Made an awesome hire: Bryant Detwiller who joins us from Google and will be leading our Marketing efforts.
• We had a record week in revenue, despite the slow month, and think we're figuring out how to grow our paid acq. faster.

_ASKS_

• Can you please retweet our funding article .
• We need help figuring out how to handle the C &D Quora sent us.
• ToutApp has reached out to us to 'partner' and we could use some help figuring out how to position ourselves. Anyone know how to handle these types of requests?

Thanks!

Niket & the Quroum Team

PS - Thank you for the help since our last update:

• Reed Morse for helping us solve a critical bug in our iOS lib
• Xander Pollock for helping us with copy on the landing page
• Nat Welch for putting us in touch with Kareem Nassar (android dev)
• Matt Joanou for helping us close the FIFA partnership and paperwork

Attachment: No attachments

AngelLoop Investor Update

Highlights:

• What milestones or accomplishments are you most proud of?

Lowlights:

• What are the things you're most disappointed about?

Product:

• What has shipped and has the roadmap shifted?

KPIs/Core Metrics:

• How is the business / product performing?

Business Development:

• Did you close any notable deals / partnerships?
• What opportunities are in the pipeline?

Hiring:

• Were any key employees hired or fired?
• What positions are currently open?

Financing:

• How much cash is left in the bank?
• What is the current burn?
• When do you run out of cash?

Press:

• Any notable press mentions?

Help Wanted/Asks:

• Where do you need the most help from your investors and advisors?

Kudos:

• Which investors and advisors went above and beyond to help the company?

Attachment: livePlan_scoreboard.png