A: Because they can be effective
Let’s break it down.
Who do you send them to?
All high-potential investors. This includes new groups or current investors that are able to follow on or lead future rounds.
What do you send?
In the context of this piece, let’s assume that you’re sending one email to two distinct audiences. Current investors may appreciate more detailed information and are more likely to look for ways to be helpful. Potential investors skim for KPIs and interesting developments. It’s important to cater to both of these groups and make it easy for them to pull the data that they need quickly. After all, most investors are likely getting dozens of these.
How do you do it?
An organized and well formatted email goes a long way. Gmail can be challenging in this department – even if you’re composing in Outlook or anther editor, you should prepare for recipients using gmail (a majority of VCs do). I suggest copy and pasting in all tables and charts as images. You can also craft emails in Word or anther editor and paste the entire message into gmail before sending, which can make things like highlighting or emphasizing easier.
Whatever you do, don’t end up with an email that looks like this:
It’s scary to read and I won’t even attempt it. Contrast this to another email I have received (I removed charts and tables for an apples to apples comparison):
Among other things, notice the quick intro and bullets at the top of the email. This is extremely helpful in giving readers a good idea of recent progress and other updates, and a preview of what’s to come in the remainder of the email. Also notice the use of formatting to break the email into consumable chunks.
When? How often?
Weekly is way too much. You want to stay top of mind but also how meaningful progress between updates (Trigger the “Woah! They’ve got $2M ARR already?!” reactions and not the “Seriously, they’re still at $2M? “). Somewhere between monthly and quarterly is a safe bet. Keeping a regular cadence locks it in.
No matter how progressive they are, VC’s can’t easily copy and paste or refer back to Snapchat stories. LinkedIn has no formatting. Tweetstorms can get annoying. So I guess stick with email. Although I wonder how Slack could turn out.
So this is the meat of it. The top three reasons
3. Impose the mere-exposure effect. People like things that they see over and over again. As long as your updates are generally positive, show progress and personality, I’m going to start to like you. I’m going to feel like I know you. To be honest, I don’t know how much this influences investment decisions, but when I get updates on the reg, I do want to help those folks. Which brings me to my next point:
2. Ask for help. Current investors want to help you. Future investors appreciate the clarity and transparency. Its a good judge of maturity and how good or bad things are. Oh and last but not least, you should get some offers to help (which is the real goal).
1. Prompt the, “want to meet?” emails. Whether it’s reminding VCs that you’re around and plugging away, that you’ve just hit their “strike zone” or typical metrics thresholds, or that you’re about to start raising, you want the “RE: Startup Update – January 1, 2020” to be something like this, “Great to hear things are going well, I’d love to get a chance to hear more. Friday?”
P.S. Sending off-schedule action emails
Since these update emails serve many purposes – to inform, ask for help, give credit, motivate folks, etc. – key messages can get lost in the noise. Occasionally, you may want to send event-based emails, such as those asking for help (e.g. key hires, specific customer intros, to announce an event) or celebrating a big win.
P.P.S. Sending one-off emails
There’s a 90% chance you’ll hear no response from mass emails. There’s a 99% chance I’ll respond to personal emails (e.g. “Hi Jackie – wanted to update you. See below”). It’s a trade-off between time and potential return (and be aware of mail-merge failures).