Clockwork Perspectives

Striking The Balance: Investor Communications DOs And DON’Ts


Caitlin James

Patrick Zailckas

As a founder, it is important to think about your investor relations strategy holistically. Take a step back from the individual updates, and consider how you can maximize both your effectiveness as a communicator and the value-add to your business over time. Before setting out to write your next investor letter, pause to consider some key opportunities and common pitfalls of these communications. If you approach your investor reporting with an awareness of the broader strategy and purpose behind these touchpoints, you will be able to maintain better investor relationships and truly capitalize on the resources your investors can offer.


DO communicate regularly, and frequently. Send a formal update letter at least quarterly to your investor base. You can supplement these comprehensive reports with additional brief, informal updates as needed. If your company sends out a press release, forward that on to keep your investors in the loop. For major developments such as client wins or senior team additions, send out a short announcement celebrating the achievement. Informal notes don’t need to be overly detailed – you can follow up with more information in your quarterly update – but investors will appreciate being informed of key ups and downs as they happen.

DON'T keep investors guessing. Once you have settled on a reporting strategy, let your investors know when they can expect to hear from you. This will help you stay accountable to your planned timing, and prevent any confusion or inbound inquiries about your plans to share information.

DON'T assume that investors will not be paying attention to your consistency and ability to follow through on the reporting timeline. Occasionally, it may make more sense to delay a particular letter by a few weeks to be able to capture some key news. In these circumstances, send a quick informal note announcing the reason for the delay. Your investors will appreciate the respectful gesture.


Letter Structure

DO set an update structure and stick to it. Break your letter into sub-sections covering business domains like “Product,” “Sales & Marketing,” “Financial Metrics,” “Fundraising,” etc. and use these categories across updates. These section headers will help you break down your content into digestible pieces for your readers, and staying consistent will make it easier for your investors to follow particular narratives over time. Further, once you develop a template that fits your business, you’ll find you are able to construct updates more quickly going forward.

DON'T send updates with lengthy blocks of text. TL:DR is also real with investor updates, and while some investors will spend the time and detail to trudge through a wordy email or lengthy PDF attachment, many will not, and/or they will miss the key takeaways you are looking to present. While you as the founder undoubtedly carry deep knowledge of all aspects of your business, you do not need to provide every granular detail to investors. Keep each section concise. Break up the text whenever possible with images, graphs, tables, or other media which can convey the message with greater impact. Remember that investors may be receiving updates from numerous founders with whom they have invested. Often, your reader will be on the go, reading from their phone. Make your updates readable, impactful, and accessible, so that the investor comes away with a clear idea of where the company stands.



DO be explicit and emphatic with investor asks. Your investor base can act as a major resource, providing access to networks, strategic guidance, feedback, and more. When crafting an update, think about your company’s unique needs and how investors can best contribute. Highlight those asks in a clear and prominent position in your letter, and be sure to provide all relevant information and instruction about the type of help desired.

DON'T be afraid to make requests. Investors want to see your business succeed, and many have cultivated extensive networks and industry knowledge (and of course, more capital to potentially invest in you). Some may have built and sold successful businesses, which may have endured similar challenges to those you are facing. Even if investors are not able to help with a particular ask, it is still worth putting the request out and keeping investors aware of the company’s needs. Other examples include target hiring additions – while a given investor may not directly know the proper candidate, they may have someone to refer who can in turn lead you closer to the key hire.


Information Management

DO keep files, data, and materials organized on an ongoing basis. Your investor relations strategy will be far simpler to execute if you are keeping the information you need ready on hand throughout the reporting period. Whenever possible, use systems and processes to track your business without significant manual effort. As you scale, systems like these will become increasingly necessary to clearly understand the health of the business on an ongoing basis. As with the above, such organizational efforts will also make your life easier when it comes time to craft these investor letters.

DON'T wait until you are drafting an update to think about the documentation and metrics you will need. Your information management strategies should serve as a foundational element of your overall investor relations strategy and planning. Diligence in gathering and organizing this information will put you in a better position to create investor materials the next time you set out to fundraise.


Follow ups

DO be responsive to your investors. When you send out an investor update, encourage your recipients to reach out with further questions and comments. Be prompt with your responses so that you can keep engagement levels high.

DON'T forget to clearly explain how your investors can reach you. Indicate the best ways to contact you and provide that information in the body of your investor letters. Express openness to hearing from your investors. And, where appropriate, extend an openness to chat further over a call or in-person meeting.

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