Communicating with Your Angel Investors

Question: Hey Guys, I’m new to the CEO gig and want to keep my angel investors informed with some sort of regular communication…Maybe a quarterly or even monthly letter.  What kind of things should I put into it?  What are they going to want to hear about?  How do I keep from saying something stupid, but still give them quality information they’ll find useful?  How do I position less than great information so it won’t freak them out but still get’s the info across?

(Brad) Before we get into the discussion of content, let’s start with frequency.  Every CEO in any angel deal I’ve been involved in starts off strong – planning (or even promising) monthly communication with his angel investors.  The half life of this promise is usually two or three months – very quickly the communication becomes every other month, then quarterly, then semi-annually.

This stinks.  Many angel investors are low maintenance, but they love to hear about what is going on with their investments.  A consistent rhythm of communication – I prefer monthly – helps the angel investors understand what is going on with their investment and gives them clear points of engagement with the CEO and the company.  Someone wise once told me “if you are going to communicate something, do it consistently.” 

Since most angel deals are early stage investments, the focus is often on the products, markets, early customers, people, financial, and financing.  I recommend a short (no more than two page) monthly email that covers the same set of topics, formatted in a way that is easy to put together (there is no value in a “fancy” document.)  Email is better than an attachment as it can be read quickly and responded to if appropriate.

Blunt, direct, and clear is always best. Don’t spin – just talk about what’s working, what’s not working, and where you need help.  Most angel investors understand that the business they are investing will have plenty of ups and downs – hiding this isn’t helpful.  However, be careful not to err on the other side and be too pessimistic either (e.g. don’t write you update letter after a long weekend that you spent at the office trying to get your crashed server back up and running.)

Finally, keep your angel investors informed about your financial status.  Many of them are the likely source of at least part of your next round of financing. 

  • Leon Liebman

    Early on I adopted the following four items for my monthly report:
    1. Good news
    2. Bad news
    3. Problems
    4. Opportunities
    Key financials are always included in the above.If your entrepreneur can’t address these candidly each month that alone is a red flag.

  • Darren Kimura

    One method I found that works is using a service like Constant Contact. Its an easy to use service that tracks your emails. You can who’s reading your content. What they’re reading, etc. It gives a professional appearance above and beyond simple plain text emails and you can use in your company’s marketing campaign to customers as well.

  • I would set up a quick password protected private blog and allow comments. Set it up on your own server (not shared hosting) for better security. Use RSS if you can.
    Then blog every week or more – just 1 paragraph, no more.
    It’s easy to do with almost any Web CMS. Let me know if you need help setting it up.

  • Great post. I agree. At a recent angel investor conference in the Pacific Northwest, when angels were asked “What could entrepreneurs do better in their relationships with Angels?” – the answer was “Monthly Updates!” I am now working monthly CEO Updates into my term sheets as a requirement. I have also been working on some best practices and templates at:
    I hope this helps, Basil