Recently I’ve had several startups that I spend time with ask me what they should communicate to their investors.

On the flip side, I’ve had an unrelated investor complain that they never receive any information from one of their startup investments.

I am not sure I got it right myself either, with periods of radio silence during particularly busy phases of the business, which I am sure must have irritated my investors.

It got me thinking about whether there’s a right or wrong way to communicate with your early stage investors. By early stage I mean seed or angel investors, as opposed to later stage institutional investors who are more likely to have a representative around your board table.

It’s hugely important to communicate with your investors. Not least out of courtesy - they’ve invested their hard-earned money in you and your business. But when you need their help, whether for advice or follow-on investment, they’ll be so much more receptive if they’ve been kept up to date.

Here’s a great piece of advice I was given early on in my startup journey:

“Communicate with your investors as if you were a public company.”

Here are my tips on how to turn this into practice.

When and how to communicate

Regularly and formally.

Startup CEOs should get into the habit of sending out quarterly updates to their investors.  Those CEOs who are really on their A-game will also organise an annual face to face where they provide an update presentation followed by Q&A. For those investors that can’t attend, offer them a conference call facility. Not all investors will turn up, but they all will appreciate the opportunity.

Why quarterly?

It’s regular enough to keep your investors in the picture, but no so regular that it becomes hugely onerous on your time. If investors have further questions, they can reach out directly to you.

What to communicate

Preparing a quarterly update can seem laborious and I realise it’s also a challenge to think back over 3 months when so much has happened and changed. You can minimise the angst by creating a standard format and sticking to it. This should include KPIs, quarterly financials and an update on the key parts of your business - such as commercials, product and team.

Keep the financials as quarterly numbers, your investors aren’t running your business day to day and don’t need the fine details.

A word on confidentiality

Startup founders and CEOs are sometimes concerned about confidentiality and putting out sensitive information into a wider audience.

Risks can be minimised by not revealing too much detail in your updates - another argument in favour of the quarterly approach. You should also do the obvious thing of clearly labelling every page as “confidential not for distribution”.

How to make it sustainable

This needn’t be a lot of work, planning is key.  A better dialogue with your investors will serve you well in the future.

What’s more, if the communication is regular, it can more easily flow both ways, with unexpected benefits…