Startup Portfolio Management: Template + Tips for Healthy Communication
Having healthy communication between investors and founders can be a lifesaver for the company. As an angel investor or a VC, you are one of the very few people that the founder can talk about their startup in detail. Whether it is mentioning success or large concerns, you are in a position where you can listen and give advice. By the end of the day, if there is something you can do as an investor to save the startup, you would wish to know it at the right time.
This is why setting a monthly update with the founders is one of the healthiest ways to communicate. You get to receive one file summarizing the past whole month and future plans, and the founder gets to take a step back and see the wider view after a sweaty month.
In this article, we will discuss seven items you can request from your founders to include in their report. The key is to get as much information from multiple angles in a summarized manner.
Investor Relations Startup Template
1. Summary
One or two paragraphs to set the context and remind the reader of key issues mentioned in the previous update.
2. Milestones Achieved
Mentioning in a few points all the milestones achieved within the month.
Preferably, these are milestones initially agreed upon by the founder and the investor. It serves as a key check that the startup is advancing according to plan.
3. Pending Milestones
Update on the current progress of pending milestones. This includes where things are standing and their expected date.
4. Successes and Setbacks
Mentioning key successes beyond milestones. This could include being mentioned in the media, discovering a new marketing approach, or attracting a large customer.
Setbacks are also healthy to mention and you should ensure the founders can trust you with sharing bad news. In this manner, you get alerted of all concerns, and maybe you can initiate help with your expertise or network.
5. Metrics
Update on the latest metrics the founder keeps track of as well as the cause for uncommon changes.
Measuring metrics periodically is a great way to keep things in check and objective. You should spend some time with the founder to talk about metrics that matter. Check out our article here on primary and secondary metrics.
6. New Hires
An update on key persons joining the team, their background and skills, and how they will boost the company.
7. Ask for Help
Make sure you let the founders know you’re there to help. This could be by making introductions or providing expert opinions.
Tips for Healthy Communication with Your Portfolio Startups
Tip #1: Periodic Updates are Key
Instead of waiting for the founders to initiate sending updates or make the call, it is more efficient for you to set a periodic time for written updates and meetings. These updates could be sent monthly or quarterly, depending on preference.
Note that as an investor, you are the one who has to keep track of updates and meetings multiple times for every startup. On the other hand, the startup itself has to make updates every once in a while. That is why it’s more efficient if you set the system for communication yourself, making sure it’s sustainable with all your portfolio investments.
Setting periodical updates eliminates the friction of initiating the conversation or making the time. Just like family and friends fixed unions, periodical updates will be the norm between you and the founders.
Tip #2: Make a Template for What Matters
Make a written template to be filled by the founders showing what you want to see from them on a periodical basis. This saves you time from reading an unstructured document every time, as well as saving the founder’s time from figuring out how and what to write.
Tip #3: Embrace Failure
Startups do have extremely high failure rates. Every investor knows that by heart.
Make sure founders are comfortable with sharing their short-term failures. This includes failing to meet key milestones, finding a fit hire, or failing to sign with a major client. Failures happen within every startup, and you’re better off knowing it than being blind.
Tip #4: Make Open Room for Help
As an investor, your help is not only providing more capital at the brink of failure. You may provide strategic advice, introduce a key connection from your network, or suggest a key partnership.
By letting the founders know you are here to help, and by staying updated on the present issues facing the startup, you become in a good position to provide help when needed. You may even make an explicit section such as “Ask for Help” in the periodic update by the founders. Since you get to know where you can help before it’s too late, you intentionally decrease the risk of failure for your startup investment.
Tip #5: Track your Startup Updates with VeFund
At VeFund, we built a tool for managing periodic written updates and KPIs. You can build your own templates and invite your portfolio startups to fill them out periodically. Join us now and put your portfolio communications on autopilot.
