Different companies have different relationships with their investors. Some maintain close ties, others only connect quarterly, if not annually. From our work with thousands of high-performing teams, we’ve seen the best teams lean into investor relationships. They display a high degree of transparency with employees, as well as investors. Sending an investor letter is one of the best ways to foster transparency and close ties.
Why Send an Investor Letter
Here at Tettra, we write a monthly letter to our investors, (and document them in Tettra for easy access to past letters, of course!) We’ve found that it’s a great way to rally support during tough times and celebrate together during the good times. It also lets our investors keep a finger on the pulse of what we’re working on, why, and how, rather than making them ask us or attend in-person meetings. Because the updates are asynchronous, investors can read them on their own schedule.
Furthermore, investors often want to help, (beyond the dollars they’ve committed,) but don’t know what help is needed. Our monthly investor letter allows us to make small, timely requests. Usually, these requests support our growth, which in turn, bolsters their investment. For instance, one member of our team sought an advisor/mentor from another tech company in Boston. By sharing this need with our investors, we’re making it easy for them to help us in a major way. This kind of support makes our team stronger, helping us grow and increase revenue faster. It’s a win-win situation for everyone.
How to Write an Investor Letter
The two most important attributes of an investor letter are transparency and brevity. There’s no point in sending an investor letter if it isn’t honest. Share key information, whether it’s good or bad. Again, if it’s good, your investors will be proud. If it’s bad, they may be able to help or share advice. Additionally, taking stock of how you’re really doing each month is a valuable exercise for any CEO.
Given the fact that most investors are busy people, they’ll appreciate your commitment to keeping updates brief. Consider using bullets or a TL;DR blurb (which stands for too long; didn’t read) for those who need to skim your letter. If you want to include contextual detail, offer resources for those who want to learn more. For instance, if you’ve recently launched a game-changing new feature, you can always link out to product announcements on your site or an internal Tettra page with the product brief.
What to Include in an Investor Letter
Give investors a sense of what you’ve been working on, how it’s been going, and where you plan to head next. This should include wins as well as challenges. Here at Tettra, we also carve out space to share our gratitude and “thank you”s to specific investors. As discussed above, we also call out areas where we need a hand, so that our investors can easily determine what they can do to help. This investor letter template gives you a framework for sharing the right info in the right way. Make sure you also put it in the right place by documenting it in Tettra.