AngeBlog by Basil Peters

CEO Updates to Shareholders

At a recent meeting of Angel Investors, there was lots of debate on valuations, terms and portfolio management, but one thing everyone agreed on was that companies could raise their next round more easily if they did a better job of regular communications with shareholders.

Every company, regardless of whether they are private or public, should e-mail a monthly "CEO Update to Shareholders."

All of the monthly reports since your last board meeting should also be included in the every board package.

A CEO Update to Shareholders template is included here with notes on formatting here.

Best practices for communicating your report are described on this page.

The report includes three components:

Key Indicators

These first indicators that give the reader a quick graphical overview of the key metrics in your company. You can change or add to these, but a few indicators that apply to most companies include: profit (always put this first), sales, runway (always measured in days).

Graphs

Some people think in tabular form and some are graphical. Regardless of how you think, your investors will really appreciate a few graphs that show the recent history and your projections on a key measures of your business success. These graphs should show the actual compared to the last budget approved by your board.

Body

These reports are summary in nature, ideally two pages but never more than three to four. Like most writing, less is more. In other words, the more succinctly you can summarize the really important messages to your shareholders, the better the result will be.

Timing

This report should be sent right after the previous months financials are complete -- at the latest by the 15th of the month.

Include Both Good and Bad News

Everyone prefers good news, but the bad news is even more important to include and highlight.