What to Include in a Startup Investor Report

Written by Amanda Bower    |    Published: December 12, 2023

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Investments are a big part of a startup’s financial strategy. When someone puts money into an organization, it’s important to keep them in the loop. Keeping investors informed can keep them interested and engaged, help them get future investments, and make an organization look good to both current and potential investors. 

To manage investor relationships, startups create investor reports. These reports tell investors how the company is doing financially and are important for building trust. Some companies have to create investor reports because of laws and regulations, but even small startups can benefit from making them. 

In fact, early-stage funding in 2023 hit a whopping $27 billion. When done right, investor reports can help build strong relationships, show accountability, and give investors confidence in a company. Investor reports are a way for a startup to communicate with its investors. They help maintain transparency, build trust, and give a clear picture of what’s going on. 

While there’s no one way to create a startup investor report, there are some things that should be included. Here are some important elements to consider when creating one.

Executive Summary

Firstly, a startup investor report should begin with an executive summary, which is an overview of the key points of your report. It can include main takeaways and distill insights and status updates, which the rest of the report will expand upon. 

What exactly can you include in your executive summary? While it should be succinct and to the point, it can include any big goals or milestones that were accomplished and cover any challenges your org faces (and how it’s managing them). The executive summary can also touch on the organization’s future direction and what new goals you’ll be going after.

KPIs

How exactly is your startup performing? While you can (and should) paraphrase and summarize in your startup investor report, the real measure of success comes from actual results and achievements. Your report should include key performance indicators (KPIs), which measure and demonstrate an organization’s performance. 

Relevant KPIs vary from organization to organization, but might include:

  • Customer acquisition cost: This is how much it costs for your business to obtain a new customer. 
  • Customer lifetime value: This is a startup’s revenue from a customer throughout their relationship with your organization.
  • Customer retention rate: This is the rate at which customers stay with your brand during a set period. 
  • Customer churn rate: This is when customers leave your brand during a set period. 
  • Monthly recurring revenue: This figure measures how much recurring revenue your business earns from customers every month (not including one-time fees and other nonrecurring revenue).

 

Financial Performance

Next up in your startup investor report is the financial performance category, a broad section that can cover a wide range of topics. It’s an important part of your startup investor report because you get to dive deep into your financial insights and takeaways and expand upon points demonstrated in your KPIs or touched upon in your executive summary.

Some examples of what to add to demonstrate the financial performance of your business include:

  • Financial metrics: Information on revenue, expenses, profit margins, and any significant financial changes since the last report. It might also include a summary of the current financial health of the startup and how much runway you have (or how long the startup can sustain its operations with the current amount of funds available). This information can likely come from your regular financial reporting
  • Fundraising updates: If the startup is raising capital or planning to do so in the near future, you can provide updates on the fundraising progress and how you intend to use the funds.
  • Due diligence: If your org has completed any due diligence for startups recently, you can also include these findings in your report. 

 

Financial Projections

Financial projections refer to financial forecasts that predict how your startup will perform financially. Your report should include projections of your startup’s anticipated income and expenses, which are informed by your business’s financial history, current operations, and market conditions, among other things. 

Financial projections allow investors to understand not only how your business is performing today but also how its financial health will be. 

Market Analysis

There are over 150 million startups in the world today. How does yours fare in the overall market?

Your startup investor report should include insights and updates regarding the market you’re operating in. This includes the industry as a whole, what your competition is doing, how customers are behaving, and the overall conditions of the market (and how they’re impacting your business).

Including a section on market analysis is crucial because your startup does not operate in a silo. Keeping tabs on the market conditions allows your startup to demonstrate to investors that it’s staying abreast of trends and changing expectations, meeting customer demand, and keeping tabs on competitors’ moves. 

Industry Trends

Industry trends shape and dictate how a startup should operate, and it’s important to stay on top of trends and showcase these practices to investors.

For a quick example, we can turn to AI. Studies show that business owners use AI for many different purposes in their organizations, including customer service, cybersecurity, customer relationship management, and inventory management. 

If competitors in your space are using AI to get work done better, faster, and more accurately, it’s important to understand how this technology shapes your industry. It can impact workflows and customer expectations, for example. 

Explaining industry trends to investors in your report demonstrates you have a pulse of what’s going on in your space and you’re thinking strategically about how to best use these trends to your advantage.

Growth Strategies and Roadmap

Where is your startup heading in the near future, and how does it plan to get there? You can cover many topics related to your growth strategies and roadmap in your startup investor report, including strategies for acquiring new customers, tactics for expanding into new markets, and plans for product/service diversification. You can also speak to your scaling efforts, improving customer retention plans, and overall long-term vision.

Use of Funds

One thing that interests investors greatly is how funds are being used in your organization. Your investors want to know whether your funds are going to product development, marketing efforts, or operational expenses. You can highlight your business’s cash management techniques, how capital was used in the past, and how you plan to use future funds. 

Risk Mitigation

As a startup, risk is an inevitable part of your journey, and it’s natural for investors to want to know how your organization plans to manage those risks. This might involve providing insight into market, regulatory and compliance, operational (like supply chain disruptions or loss of key personnel), cybersecurity, and scalability risks (such as the strategies to ensure a seamless transition into new markets).

Building (Potential) Investor Trust Begins With a Robust Startup Investor Report

Excellent investor relations are crucial for fast-growing startups with their eyes on the prize. And the best way to not only build investor trust but maintain it for the long run is with a comprehensive startup investor report. This report can build solid investor confidence and even help secure future investments when produced regularly.

To produce an investor report of this caliber, you need to have solid financial foundations. That’s where we come in. hiline is a one-stop shop premium experience for all things accounting, finance, tax (including tax audit prep), HR, and payroll, and we know what it takes to produce the investor report of your dreams.

Let us take it from here so you can focus on running your powerhouse business. Contact us today to get started. 

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