Fail to effectively communicate with funders and watch your funding opportunities fade.  This post shows you specifically (it has a template) how to maintain ongoing email communication with funders to exponentially grow investor interest.

Investors want to see what you can do before they fund you.  Tweet This Quote

Too many entrepreneurs miss funding opportunities for one simple reason: they don’t do a good job of maintaining ongoing communication with potential funders. They can drum up great interest from investors at pitch events or after initial meetings, but they don’t take the necessary step of keeping funders informed of their progress to maximize the potential of turning that good initial impression into actual funding.

Here’s What To Do

There are many important steps to building powerful relationships (check out How to Build Powerful Relationships and one on Networking and Why It Is An Art), but the most overlooked and simple thing to do is to send periodic email updates to interested funders. Let me use the rest of this post to remove the ambiguity.

Setting The Scene: What You Should Be Trying To Do

Build a case. You are sending these email updates because getting funding requires building a case for deserving it. This can take some time as investors want to see what you can do before they really think you should get funding. Sending updates helps build this case.

Stay on top of their mind. No one is going to fund you after one meeting and no one is going to fund you after one update. Keeping them in the know helps you to stay in the spotlight and helps to keep things moving forward.

Amplify interest. By seeing you hit milestones, face and overcome problems, and make progress, people become more and more excited about your venture.

Grow the number of interested funders. If interest is amplifying more people will be brought in or will be asking to be in the know.

Show funders how you will communicate. I often hear investors say, “If an entrepreneur doesn’t communicate with me before I fund them, it is a good indication of how I can expect them to act after I give them money.” Lack of communication usually means they won’t fund you. Starting now makes sure they know communication will not be a problem should they fund you.

Build more buy-in. By hearing from you often, funders feel more bought-in to helping you and seeing you succeed.

Frequency: How Often You Should Send Updates

Sending updates once a month is ideal. Make it the same day every month so they know when to expect hearing from you. If you have a lot to say or a lot is happening each week go ahead and do it every two weeks.

It is imperative that you do these updates consistently. Reaching out only when you need something or have something major to offer is not ok. So update people even if you don’t have anything major to report.

Who: The People That Should Get This

First, let’s be clear: it’s ok to send a group email. It does not have to be personalized. That said, you should Bcc everyone so that you are not sharing everyone’s emails with the group.

Send these updates to the following people:

  1. All of your past funders
  2. Anyone you have had correspondence with that you think could potentially be a funder. Did you have a really great conversation with a funder at a conference? Add ’em. Did a funder love your idea but say “you’re too early stage for us”? Add ‘em. If you are unsure if someone is interested in receiving an update from you, err on the side of sending it to them. Leave the door open for them to tell you if they don’t want it. Caution: Do not just pull emails of people you don’t know and add them as this may leave a very bad taste in their mouth.
  3. Mentors, board members, your legal team, and past major supporters. For example, at the Unreasonable Institute we love to be included in investor updates from our entrepreneurs. The more we know about what is going on with our entrepreneurs, the more we can help.

Rule On The Update E-mail

Keep it concise. Get to the point. They will connect with you if they want to hear more.

Make it human. You get bonus points (meaning more people will continue to read it) for being genuine, interesting, sincere, or a bit funny.

Be transparent. Share struggles too. Funders know everything is not perfect all the time. If you only send updates when you have great news or if you don’t share struggles funders will see this as a red flag. Additionally, sharing struggles will allow funders to help you. If they truly want to see you succeed they will want to help you overcome hurdles (and thus they need to know about those hurdles).

General Email Template

Here is the general format for such an email update:

[QUICK PERSONALIZED HELLO, WELCOME]

[WHAT IS MOST IMPORTANT/TOP OF MIND FOR YOU]

[KEY THINGS YOU NEED HELP WITH. Be sure to include a specific ask beyond just funding that investors can help with.]

[CONCISE UPDATES ON customer/user numbers, team and new hires, product or service developments, new clients or partnerships, projects you have been working on, new projects you are starting, major changes to financials, funding sought/committed/raised]

[THANK YOU. Always say thank you.] [GOODBYE] [YOUR NAME]

Example

All names, numbers, and people below are made up, but this should help you get the idea. This update is probably the maximum length you would want; longer emails receive less readership.


Hello everyone!

First and foremost. It was such a pleasure to see many of you at the SoCap conference recently and meeting for drinks, singing some karaoke, and sharing some laughs. I am sorry to inform those who were not in attendance that pictures will not be attached.

Now, I’d like to give you some exciting updates! We’ve been cranking away on the product side of our business, business development and most of all on our user acquisition rates! Now let me jump into more specific updates.

2 Quick Asks

  1. We are looking for NGOs to partner with in Mozambique to pilot version 2.0 of Product M in this new market.
  2. We need your help in closing the final $100,000 of this funding round. Please connect me to anyone who you think we should talk to about closing this round (including you if its you who would like to help us close the round!)

Customers

  • 9,400 customers using Product M in Zimbabwe, this is up by almost 1,500 since our last update in September. 25% month-to-month increase in customers.
  • 92% customer retention rate after first training on product use.
  • 3 new distribution centers set up to distribute our products (pictures are attached)

Team

  • We have hired Teju Ravilochan as our head of Sales and Marketing. Teju has a history building volunteer sales teams in northern Zimbabwe with USAID. See Teju’s profile here.
  • We hired and trained 8 new sales agents hired. We now have a total of 15!

Personal Development

  • Version 2.0 of PRODUCT M is set to be manufactured in December and on the markets in February.
  • XYZ Design Studio who has been creating version 2.0 has been, to be honest, frustrating to work with. They are a bit behind of getting the new version to us, but after some long meetings with them we are now confident that they are back on track.

Partnerships

  • We’ve secured partnerships with Partner 1, Partner 2, Partner 3, and Partner 4.

New Projects

  • We’re currently waiting but think we may begin a second pilot with Partners 2 and 3 in to further test the market for our newly developed version 2.0 Product M in March, 2013 in Ghana.

Financials

  • Given our recent change in product sales expectations and capital expenditures our financials have changed significantly (lower sales this quarter but also far lower capital expenditures).
  • If you would like to see our updated financials please email me, I am happy to share them.

Funding

  • We are also really getting close – we just have an additional $100,000 left to raise out of our $750,000 of our Series A equity round.
  • We won a $50,000 grant from UVW Grant Funder.
  • We need your help in closing the final $100,000 of this funding round. Please connect me to anyone who you think we should talk to about closing this round (including you if its you who would like to help us close the round!). I am happy to connect interested people with our other equity investors.

Please let me or any of the management team know if you would like any additional information. You can email me at [email protected] Also, if you no longer want to receive these emails please just let me know.

Most importantly, again, thank you for believing in us and I am looking forward to the coming months!

Help us take this to the stars!

Best Wishes,
[Your Name]

An Unreasonable Challenge:

In 15 minutes, compile a list of emails of people (funders included) that should get an update from you. Take 30 minutes to write an update. Take 1 minute and send that bad boy!

Here’s a perfect template to get investors excited about your startup!  Tweet This Quote

Tyler Hartung

Author Tyler Hartung

Tyler is the former co-founding Venture Fund Lead and former COO of Uncharted (formerly the Unreasonable Institute). He helps ventures doing good in the world get the funding they need to create impact and also works with Enable Impact, which helps entrepreneurs find and connect with over 1,500 impact funders and programs.

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