The great Ty Danco and Dharmesh Shah put out a fantastic post on The Why and How Of Updating Your Angel Investors. I highly recommend you read it.
I have modified the original text to adapt it for how to update your mentors / board-of-advisors. So that it is clear that the bad writing is not Ty and Dharmesh’s, my changes appear in red.
Before startups have investors, they have mentors and/or an informal board of advisors. From an enlightened self interest perspective, they can’t help you if they have no clue what you are doing or what help you need – so tell them. From a Do The Right Thing perspective, the only compensation mentors get is the warm and fuzzy feeling of helping you out… which they can only get a feel for if you communicate clearly and often with them.
…You can do all of the Lean Startup experimentation you want, but we’re here to tell you that one of the the easiest and most underrated skills that a startup CEO needs is knowing how to keep your mentors updated, excited and engaged.The reason is: The CEO is the mentors‘ user interface into the business. It’s how mentors see what’s going on, and in some minimal ways, interact with the business.
1) Write your mentors consistently. You probably have a “lead” mentor or two who is committed to helping you out a lot, you should communicate with them every 1-2 weeks. You likely also have a list of other people who like you and want to keep informed, but are not up for intense email. Hit them once-a-month… If you have a regular advisory board or board of directors meetings, that’s a good time to send out an update. This is preferable to phone calls, both for you and for them. If you’re smart, you’ll send this letter out, in more or less similar form, not only to your investors but also to mentors, advisors and staff. And if you do ever follow up with calls, they’ll be up to speed and more productive.
2) Keep it short. 1 page, max. Your mentors want to know what’s going on, but they don’t need to hear every detail.
3) Use a template. We like the TechStars one. Katie Rae and Reed Sturtevant of TechStars Boston teach their companies to communicate with mentors in a way such that each letter builds on the previous one. Typically, the letter gives both highlights and low-lights since the previous communication, sets some short term goals, and then reviews the progress—or lack thereof—on the goals set earlier. Just knowing that you will be producing a report card helps focus you on the important stuff and ensures that things don’t get forgotten. Check out the investor update template for a sample.
4) Remind them what you’re doing (now). I know this is going to sound strange, but often your mentors are not doing as good a job as they could keeping up with all your activities, news, tweets and pivots. Always include a one sentence description of what you’re doing (now) just as a friendly reminder. A side benefit to this is that it forces you to write (and read) your one sentence description. This is one of the hardest tasks in startup-land.
5) Tell them the one or two strategic problems you are wrestling with. Got a few hard decisions? You’d be surprised how quickly an mentors will respond. And odds are pretty good that they’ve seen this movie before and can help you come to a better decision. If it’s personnel-related, though, you may wish to be more circumspect.
6) Keep it honest, but don’t tell your secrets. Would you be comfortable if this email ended up in public, or in the hands of your competitors? If not, consider editing it down.
7) Always have 1-3 direct asks (but not more). Looking for some specific introductions? Ask. Need to source some key personnel? Ask. Want them to share some important news on their social media networks? Don’t be proud, don’t be shy, just ask. 90% of the time, the investor will probably not be able to help, but in the 10% of the time they can help, it’s often pure gold.
8) Cast a wide net, but bcc. The more people you can keep up on your company, the more likely it is someone will be able to help you out, and the more you can leverage your network. But respect your mentors‘ privacy, and make sure you are not revealing any confidences in the letter. Use mailing list software (free one built into GoogleApps) to make sure you don’t leave someone out or include someone who wants out.
9) ARCHIVE all correspondence in a shared folder. Your mentors will be grateful that they don’t have to be organized. This tip is so simple, yet almost no one does this. Your mentors have more on their plate than just you. Make it easy on them by putting everything they need to see into one folder which they can reference. Send each letter by email (don’t make them have to hit links or print out attachments,) but include a link to the shared folder with the full archive. Inside, have all of your historic correspondence, and perhaps even your latest pitch deck, any financials you want them to see, etc. You might consider having two separate folders—one complete one, for the inner circle, and one that’s been redacted down for the broader crowd…
Remember, this exercise is as much for you as it is for them.
This entire process should take you less than an hour or two a month and it’s worth it. Besides, if you do it right, you’ll actually find that it helps you to write these updates — and it’s not a complete waste of time.
This article was a collaboration between Ty Danco and Dharmesh Shah. Ty is CEO/co-founder ofBuysideFX and an angel investor/mentor (you should be reading his blog). Dharmesh is founder/CTO of HubSpot, runs OnStartups.com and is an angel investor in over 40 companies (you can follow him on twitter @dharmesh).
Update: Formatting issues made all text black initially, alas. This was corrected on 5/23/2013.