Do Startup Founders Need to Update Their Investors?

An article we liked from Thought Leader Kera DeMars of Hustle Fund:

Why You Should Always Send Your Investor Updates

In April 2020, venture capitalist Elizabeth Yin (general partner at Hustle Fund, former partner at 500 Startups) put out a poll on Twitter:

“What proportion of your portfolio companies write you at least quarterly updates beyond the first year without a reminder?”

Over 200 investors responded.

Of those, around 60% receive regular updates from less than half of their portfolio companies.

As I think about our own companies in the Hustle Fund portfolio, these numbers aren’t that surprising.

What is surprising, though, is that startup founders don’t seem to realize the value that comes from sending update emails to their investors.

Why updates are so important

Hustle Fund has invested in over 135 companies (as of May 2020).

Most of those companies only email us when they need something… usually that means introductions to potential investors, candidates for jobs, or strategic partners.

But here's the thing.

If we haven’t heard from a startup in many months, we don’t really know what’s going on with that company.

And if we don’t really know what’s going on with a company, we’re probably not going to make those introductions.

That’s because we don’t know for sure which introductions will be most lucrative for both parties.

And we’re not going to introduce a founder to a bunch of valuable contacts if we aren’t confident that the introduction will be valuable for both the startup and the third party.

That’s not a good use of our time, the founder’s time, or the third party’s time.

And we don’t want to wear out our relationship with the third party by...