Newly Seed Funded? Don’t Commit to Monthly Updates
Ok, you’ve been hustling for 2 months, selling the shit out of your vision to all of these amazing investors, trying to pickup a few nickels to rub together, and finally…finally, finally, finally, you have persuaded 6 or 7 very smart folks to cough up some seed capital. Today the money hits the bank. You did it! You got Keith Rabois, Ron Conway, Eric Schmidt, FirstRound Capital, and Jeff Bezos to give you $1 Million. You go out, drink 15 shots of Tequila, puke, wake up the next day, and you say to yourself “thank god, I can finally get back to thinking about my product. 30 days or so pass, you have a few conversations with one or two of your seed investors, and then you realize “hmmm, I have all these smart people around the table, I should probably try to involve them as much as possible in what we’re doing.” It has been about a month since you closed the round, and you say “I know! I will right a MONTHLY update.”
You sit down, and the first sentence of your update reads as follows:
“All, we are so excited to have everyone on board. This is the first of our monthly updates. Every month we will write to you and tell you what’s going on with the company and how you can help”
I know this is the first sentence of your update because it was the first sentence of my first update my first month after financing my first company. I also know this is your first sentence because of the 30 companies I have invested in the last 12 months, about 50% of them are run by first time entrepreneurs, and of those 50%, it is the first sentence of almost everyone’s first update.
Guess what? Of all those founders, myself included, who wrote this first sentence, not a single founder has actually sent an update every single month. When everything is new, you think you are going to have news for investors every month, but operating a business doesn’t happen in predictable 30 day cycles. The events, occurrences, accomplishments, and missteps that emerge when executing toward your vision unfold unpredictably.
Repeat entrepreneurs must have picked up on this unpredictability. I can’t think of a single second/third/fourth time founder in our portfolio who has committed to monthly updates.
My advice: Don’t set a precedent that you will be communicating on a monthly basis, because you’re simply going to look like a loser when you promise that and don’t deliver. Still send updates, engage your investors, make sure everyone knows what’s going on with the company, but do it organically, when you feel an update is warranted. It can be 17 days after the previous update, or 60 days after the previous update. You’ll get more out your investors this way and they’ll get more out of your updates.
Read Full Post | Make a Comment ( 2 so far )
Jordan Cooper's Blog: startups, venture capital, etc... 