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Feb 5, 2024

If I could drop one piece of Gaming VC wisdom on you right now, It’d be to always nail investor updates.

Jere Partanen

BEST PRACTICES

I’ve spent almost 4 years at Sisu Game Ventures investing in gaming start-ups, and I’ve also been on the other side of the table as a venture-backed founder. So I’ve seen my share of successes and struggles. If there's one piece of advice I can impart on any gaming founder with VC backing, it's this: always nail your investor updates. Seriously, it can make all the difference between exciting achievements and unfortunate stumbles.

What is an investor update?

Investor updates serve as a structured way to provide your investors with regular insights into your operations and performance. Think of it as a monthly (or quarterly) report, offering a comprehensive overview of the company's balance sheet, achievements, challenges, and strategic direction.

These updates can take various forms, ranging from formal presentations to informal conversations, depending on your preferences and the nature of your relationship with investors. In some cases, even an email can work quite nicely. Regardless of style, the primary objectives are the same:

  • Give investors and board members a snapshot of the company's financial health and strategic trajectory.

  • Request feedback, direction, introductions, and/or favors from your investor support group and get as much impact from them as possible.

Why are investor updates important?

Investor updates create transparency, accountability, and alignment between stakeholders. By offering investors visibility into the company's operations, challenges, and opportunities, these updates: 

  • Support informed decision-making and build trust and confidence among investors and founders alike.

  • Ensure founders are getting the most support out of their investor communities in a clear and actionable way. 

  • Illustrate the founders’ organization, productivity, and collaboration, which will definitely shine a positive light. This is very helpful if and when you approach your existing investors to engage in later funding rounds.

In essence, investor updates are vital for maintaining open communication and collaboration between entrepreneurs and investors, which is essential for dealing with the complexities of the gaming industry and steering the company towards sustainable success.

A less appreciated benefit of investor updates is that they can also be used as a tool to communicate with investors not even on your cap table (yet). This can keep you top of mind for investors who previously passed but could be in the running for the next round, or new investors you are building a relationship with. If sending to external investors, you may want to trim the original update down to provide only the main points of interest, while also removing some confidential information. You should, of course, be mindful of only adding investors who are actually interested.

What goes into a great investor update?

When developing an investor update, you should include these essential ingredients:

  • Head count: Provide a breakdown of team members, highlighting any recent hires or departures.

  • Revenue: Share revenue figures to give a clear understanding of the company's financial performance and direction.

  • Burn rate and projected runway: Analyze spending patterns and project future runway to highlight the company’s sustainability.

  • Opportunities for future focus: Outline strategic priorities and growth plans to provide a roadmap for future growth.

  • Update on product development: Review product milestones and advancements to show the company's pipeline and competitive positioning.

  • Risks and mitigation plans: Identify potential risks, along with strategies to address those risks.

  • Support needed from VC: Articulate where you may require additional support or resources. Tangible requests, such as introductions to influential contacts or asking for specific opinions on strategies and initiatives are a great place to start. Give your investors a clear, and actionable ask so they know what they can do - don’t leave it open-ended.

  • Bonus - Appreciation: Especially if you have many angels on board, give some public thanks to those in your list of recipients that have recently helped or responded to your previous requests. This way they’ll be more likely to assist in the future.

It is key to understand that investor updates are more than just data dissemination. They’re most effective when a founder leverages it to tap into the expertise and resources of their VC partners.

Accurate and up-to-date data is essential to having a productive update. I highly recommend that you have an automated financial analytics tool that gives you a firm grip on the financial health of your business without requiring mundane, manual reporting and toiling over Excel sheets. Having this data at your fingertips in a real-time dashboard will save you a lot of time when preparing your investor updates. Without that, creating monthly updates can be a big chore.

Sanlo Financial Analytics cash activity dashboard

Leveraging VC resources helps companies survive

To build a mutually beneficial relationship with VC partners means more than just routine updates. It involves actively engaging with them and making use of the resources they provide. Investor updates are a powerful way to not only share value, but also can set you up for successful subsequent investments. When providing updates, be methodical in how you do so and take great care in the information that you share.

In summary, consistently delivering high-quality investor updates is a foundational principle for gaming startups navigating the complex world of venture capital and entrepreneurship. By promoting transparency, accountability, and strategic alignment, effective management of investor relations significantly contributes to the long-term success of gaming ventures. I’ve personally seen a high correlation between successful startups and founders who provide consistent and useful investor updates.

About Jere

Jere Partanen is a Principal at Sisu Ventures, a Pre-Seed fund focused 100% on games. At Sisu, he is looking at deals across all platforms and geographies, with a focus on PC/Console and mobile studios in Europe and the US. In parallel to his work at Sisu, he works as a CPO of Pandatron, a startup using AI and coaching methodologies to help large-scale organizations with change management. Prior to Sisu, Jere worked across the Finnish startup ecosystem at organizations like Compensate, Helsinki Think Company, and Slush.

For game developers, by game developers.
Questions? Drop us a line👇
Copyright © 2024 Sanlo
Made with ❤️ across the globe
For game developers, by game developers.
Questions? Drop us a line👇
Copyright © 2024 Sanlo
Made with ❤️ across the globe
For game developers, by game developers.
Questions? Drop us a line👇
Copyright © 2024 Sanlo
Made with ❤️ across the globe