Investor Update

A periodic report from a company to its investors covering key figures, progress, problems and requests for help.

Example

A quarterly email reporting cash, net burn, runway, revenue, retention, wins, problems and asks.

Important

Compare each update with the last one. Figures that stop being reported are often the most informative part.

Related terms

• Information Rights — A contractual right for an investor to receive a private company's financial statements and other operating updates on a regular basis.
• Cash Runway — The number of months a company can operate before running out of cash, calculated as cash divided by monthly net burn.

Lessons that explain it

• How a founder handled a failure tells you more than whether they failed — Previous startups, including failures, are strong evidence about a founder. Diligence looks at what happened, how investors, employees and customers were treated, and what the founder learned. (9 min)
• Consistency across conversations is the most practical integrity test — Integrity and leadership are hard to measure directly. Diligence looks at observable signals: whether numbers stay consistent, how bad news is delivered, how people are treated and how the founder responds to challenge. (10 min)
• Good board members ask the question nobody else will, then let management run the company — An effective board member prepares, focuses on the few decisions boards actually own, asks hard questions early, and resists the urge to manage the company from the boardroom. (10 min)
• Ask for a few numbers on a steady rhythm, not everything whenever you remember — Good monitoring of private positions rests on a consistent update, at a cadence matched to stage and position size, covering the handful of numbers that actually signal health. (10 min)
• The most important line in an update is often the one that is missing — Founders naturally lead with good news. Reading an update well means comparing it with last period, noticing which figures disappeared and separating real warning signs from normal early-stage noise. (11 min)
• Cash and runway decide whether anything else gets the chance to matter — Runway - cash divided by net burn - is the single most important monitoring figure for an early company, because running out of money ends every other possibility. Fundraising time makes the real deadline earlier than it looks. (11 min)

All 578 terms in the Investing glossary