Month: July 2017

3 Ways to Make Investor Updates Transparent & Effective

You’re about to hit Send on your latest monthly update to your existing investors. And you’re feeling pretty great about it. It includes all of your company’s latest achievements – you even highlighted a few of them with little thumbs-up emojis. With any luck you’ll get several of those “keep up the awesome work” replies – instant dopamine rush!

But wait – before you click Send ask yourself: are you giving your investors the whole story? What about your company’s struggles?

Some founders tend to withhold bad news from their investors because they’re afraid of the reaction: the investors may be mad or disappointed, think less of the team or even pass on investing in the next round. Here’s the thing: existing investors want *all* the updates – the good, the bad and the ugly. As shareholders they deserve that transparency. Also, hiding or sugar coating bad news often prevents investors from helping the company with its biggest needs until it’s too late.

Including these three sections make your investor updates honest and actionable:


A complement to Highlights, Lowlights tell investors what the company is struggling with. Don’t sugarcoat or be dramatic – just tell it like it is. These could include things like falling short of the revenue plan, losing a key team member, or longer than expected sales cycles. Include enough detail so investors are 100% clear what the struggles are. And they’re a great segue to …


As CEO it’s your job to tell your investors what you really need help with. Include at least 2-3 well defined Asks in every update. These could be connections to potential customers or partners, advice on sales strategy, or referrals to key hires. Make them as specific and actionable as possible. Welcome the assistance with open arms!

Financial Snapshot

No matter what the update is, the context is very different if you have thirteen months of runway vs. three. Keep it simple by listing Cash on Hand, Current Burn Rate, and Runway. Runway should be bold and highlighted in red if it’s 6 months or less. If you’re afraid investors will be mad there’s only 5 months of runway left, imagine how they’ll feel when they find out at the last minute it’s almost zero!

Full transparency trumps optimism when it comes to communicating with your stakeholders. If your updates are all sunshine and rainbows your investors will be skeptical anyway. Including Lowlights, Asks, and the Financial Snapshot in every investor update tells the whole story. And being honest about your struggles usually makes your investors want to help you even more.

Now instead of your investors replying with “keep up the awesome work”, they can provide real suggestions to help your business. Less dopamine rush, more chance for long term success!

The Arrogance Fallacy

Words matter. Which is why I mentally cringe when some VCs say they want their founders to be arrogant. Let’s look at two definitions of arrogant:

Merriam-Webster: exaggerating or disposed to exaggerate one’s own worth or importance often by an overbearing manner; showing an offensive attitude of superiority. making claims or pretensions to superior importance or rights; a sense of superiority, self-importance, or entitlement.

Exaggerating. Overbearing. Offensive. Self-important. Entitled. Some VCs probably saw a few of these founders generate huge returns and concluded that’s the CEO blueprint for success. 

Except it’s not.

Arrogance can look like strength and confidence but it’s typically the opposite: a psychological defense mechanism that projects a facade of superiority to hide some serious insecurities. Loud, arrogant people are often the most insecure and fearful people in the room. They are terrified others will think they’re dumb and incompetent. So they overcompensate. The more fame and fortune they attract, the more fearful they become, the more superior and entitled they act. Often with disastrous results. 

We’ve all seen it: one well-funded, arrogant CEO after another, doing offensive and illegal things, falling from grace and sometimes taking their companies with them. 

As a group, VCs themselves aren’t exactly poster children for humility. Worse, arrogance has no doubt played a role in the disgusting culture of sexism and harassment in Silicon Valley. The initial denials and subsequent pseudo-apologies of some offenders were almost too arrogant to believe. 

Arrogance is also related to the shameful lack of diversity among founders that get funded. VCs need to look beyond the arrogant white dudes to fund more women and people of color who don’t fit their preconceived founder image. This is starting to change but there’s much work to be done, by all of us.

Some of the smartest, most confident and successful people I know are actually humble. But don’t confuse humble with meek. They’re outspoken at the right times, stubborn even. But they’re not the loudest – they listen more than talk. They realize there’s a ton they don’t know and they’re honest about it. They operate from a place of relentless learning. They’re smart enough to know it’s not about proving they’re the smartest in the room. 

We shouldn’t be encouraging arrogance in anyone, especially our future business leaders. Let’s be vocal about supporting entrepreneurs who are coachable. Honest. Audacious. Respectful. Persistent. Emotionally intelligent. 

Because those are the qualities of great leaders and human beings. And because words matter.