When things aren’t going well, the last thing you want to do is write that monthly or quarterly investor update. Your metrics are down. That big partnership fell through. You’re three months behind on the product roadmap. Maybe you’re thinking, “I’ll just wait until next month when we close that deal” or “I’ll send an update once we have better news to share.”
Stop right there.
This is exactly backwards. And here’s why you need to send those updates especially when times are tough:
#1. Send Them So You Aren’t Alone
Being a founder is lonely. Period. And it’s loneliest when things are hard.
Your team doesn’t need to hear all your fears about the business. Your spouse or partner is already stressed hearing about the same problems every night. Your friends who aren’t founders don’t really get it.
But your investors? They signed up for this. They literally wrote you a check knowing that most startups go through multiple near-death experiences. They’ve seen it before. Many of them have lived it themselves.
When you send that honest update about how tough things are, something magical happens. Within 24 hours, you’ll start getting emails back. “Been there. Here’s what worked for us.” Or “Let me intro you to someone who solved exactly this problem.” Or simply “Hang in there. This is normal. You’ve got this.”
I’ve seen this play out hundreds of times. The founder who thinks they’re alone with an insurmountable problem sends an update, and discovers that three of their investors faced the identical issue. One makes an intro that becomes a game-changing hire. Another shares a playbook that cuts the problem-solving time in half.
You’re not alone. But you have to let people in.
#2. Send Them to Keep You Honest, So You Don’t Hide from Bad News
Here’s an uncomfortable truth: founders are really good at lying to themselves.
“Churn is a little high this month, but it’s just seasonal.”
“Sales are slow, but we’ve got a huge pipeline building.”
“We’re burning more than planned, but revenue will catch up next quarter.”
When you don’t have to write it down and send it to people who actually understand SaaS metrics, it’s easy to spin a story in your head where everything is basically fine. Just one or two quarters away from breaking through.
But when you have to put it in an investor update? When you have to write “MRR is down 8% this quarter” or “Burn rate is $450K/month and we have 11 months of runway”? That’s different. That’s real.
The act of writing the update forces you to confront reality. It creates accountability. Not to your investors necessarily, but to yourself.
I remember talking to a founder who told me he avoided sending updates for four months because he “didn’t want to worry investors.” When he finally sent one, he realized he’d been in denial about his unit economics for almost half a year. The update forced him to admit that his customer acquisition cost had crept up 60% while his average contract value stayed flat. That’s not a problem you solve with “more hustle.” That’s a problem you solve with an actual plan.
The update got him honest with himself. And that honesty saved the company.
#3. Send Them So You Don’t Spend All the Cash and Get Nowhere
This one is tactical and critical.
When you’re sending regular updates with actual numbers, you create a forcing function for disciplined financial management. You have to look at your burn rate every month. You have to track your runway. You have to think about whether your spend is actually moving the business forward or just keeping you busy.
I’ve watched companies die not because they ran out of money, but because they ran out of time. They spent 18 months and $3M learning that their current approach didn’t work, and then they had 3 months of runway left to figure out something new. That’s not enough time.
Regular updates with financial metrics create checkpoints. “We’re at $50K MRR, burning $200K/month, we have 15 months of runway.” Three months later: “$65K MRR, burning $220K/month, 12 months of runway.” Three months after that: “$72K MRR, burning $240K/month, 9 months of runway.”
See what’s happening there? MRR is growing, but slowly. Burn is creeping up. The ratio is wrong. You’re not going to make it to cash flow positive before you run out of money.
When you write this down every month or quarter, you spot these patterns early. Early enough to make a change. Cut the burn. Accelerate revenue. Raise a bridge round. Whatever you need to do.
When you don’t send updates? You wake up one day with 4 months of runway and panic. You spend the next 3 months frantically fundraising instead of fixing the business. And in month 4, you shut down.
The updates aren’t just communication. They’re your financial alarm system.
#4. Send Them Because You’d Want One If You’d Written the Check
Here’s the simplest reason of all, and maybe the most important:
Put yourself in your investors’ shoes.
You just invested $500K, or $1M, or $5M in a company. That money represents a meaningful bet for you, your fund, your LPs. You spent weeks doing diligence. You passed on other deals to do this one. You believe in this founder and this vision.
And then… radio silence. For months.
How would that feel?
You’d wonder: Is everything okay? Are they avoiding me because things are going badly? Did they give up? Are they about to shut down? Should I be worried?
The lack of information creates anxiety and erodes trust. Even if things are actually going fine, the silence makes investors assume the worst.
Now flip it around. You get an update every month or quarter. Some are great: “MRR up 40%, just closed a major enterprise logo, team is crushing it.” Some are hard: “Churn spiked, we had to let two people go, I’m questioning our ICP.”
But you’re getting them consistently. You know what’s happening. You can see the founder is engaged, honest, and working through challenges. Even when the news is tough, you think, “Okay, they’re on it. They see the problems. They’re not hiding.”
Which founder would you rather have your money with?
Your investors are human beings who took a risk on you. They deserve to know what’s happening with that risk. Good, bad, or ugly.
The Bottom Line
Investor updates aren’t just about keeping your investors informed, though that’s important.
They’re about keeping yourself from being isolated in the hardest moments of building a company. They’re about forcing yourself to face reality instead of drifting in comfortable delusion. They’re about maintaining financial discipline so you don’t run out of runway before you figure things out.
And they’re about treating the people who believed in you with the respect and transparency they deserve.
So write the update. Yes, even this month. Especially this month.
Your business will be better for it. And so will you.
