Follow-up and investor relations
What should a quarterly investor letter include?
Short answer
A quarterly investor letter should cover results against plan, cash and burn, anything that went wrong, changes to the cap table or debt, and what you will do next quarter. Keep it short and honest. I read these letters the way I read diligence files, so I look for the same numbers and explanations. Many sponsors talk to a securities attorney about how they communicate with investors.
Lead with the numbers investors already check
When I do diligence on a company, I ask for company prepared monthly or quarterly statements. Your investors will compare your letter to those same statements. So open with a short financial summary.
Show results against plan. Show your cash position. If you run an operating company, show current and projected burn rate. Keep the figures consistent with what you report elsewhere.
Then explain anything that moved. My diligence checklist asks for an explanation of any material write-downs or write-offs and details of any outstanding contingent liabilities. Put those in the letter before an investor has to dig for them.
This clip walks through the financial statements, projections and financing items I review in diligence, which is a good guide to what investors want reported back to them.
Summary and key takeaways from this video
Cover problems, capital changes and the next quarter
A letter that only reports good news loses trust fast. Say what missed plan and what you are doing about it. Then cover the rest of the picture.
- Progress on the milestones you named last time
- Problems, delays and the fix for each
- Any change to the cap table, debt or use of proceeds
- Priorities for the next quarter
- Any ask, such as an introduction or a follow on commitment
Only include an ask if you mean it. Investors notice when every letter ends with a request.
Keep it short so it gets read
I am not going to claim one format works for everyone. What I can speak to is what we do at Family Office Club. We sent one page by mail each month in a red envelope. It was never long.
"Oh yeah, you always used to send me that red envelope newsletter."
A billion dollar plus family office said that to us two years after we stopped sending it. A short, steady page builds recognition over time. A long report that arrives late does not.
In this panel I describe the one page red envelope newsletter and why adding value first works better than selling.
Summary and key takeaways from this video
Put the backup detail one click away
The letter is the summary. The detail can sit in a data room. We are building data rooms in NotebookLM, where an investor can ask questions about a deal and see where each answer comes from. We are doing this now for a family with a $150 million net worth.
Here I explain how a NotebookLM data room lets investors ask questions and get sourced answers, which pairs well with a short letter.
Summary and key takeaways from this video
One more point. Many sponsors talk to a securities attorney about how they communicate with investors in writing.
From my books and event talks
When you write the letter, put tangible items in it that a reader can check. If your strength is your track record, the number of deals, or the number of months you have paid investor dividends on time, say so with the actual count. A line like that gives an investor more to check than a paragraph of general reassurance. A specific figure that repeats and holds up from one letter to the next is easier to remember.
"It should be something that almost no one else can say, and it should involve tangible things. If your strength is your track record, or your experience, or number of years, or number of deals, or number of investors served, or number of months you've made your dividend payments on time to investors, you should include some tangible items."
Facts from this talk
- My diligence checklist asks for company prepared monthly or quarterly financial statements.
- The same checklist asks for current and projected burn rate, plus explanations of material write-downs or write-offs.
- A billion dollar plus family office contacted us two years after we stopped sending our one page red envelope newsletter each month.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: Evaluating Deals and Performing Due Diligence | Family Offices Group, Live Investor Ratings: Hear investor first impressions on your brand name, and/or 10-second pitch, Artificial Intelligence for Capital Raising | Top 7 AI Tools Live Demo + Q&A. Quotes come from the video captions, lightly edited for readability. Figures are the speakers' own estimates and experience.
General education only. Not legal, tax or investment advice.
Talk to a securities attorney to explore options around investor communication rules, forward looking statements and offering document disclosures. Do not use AI to write your own legal agreements.
Next moves
- Pull your latest monthly or quarterly statements and write a one paragraph summary from them.
- List the milestones you promised last time and mark each as met, late or missed.
- Write down every problem and the specific fix for each.
- Note any change to the cap table, debt or use of proceeds.
- Consider having a securities attorney look at a draft, then keep the final to one page plus a link to backup.
Follow-up questions
How long should a quarterly investor letter be?
I prefer one page. We sent a one page newsletter and it was remembered years later. Put extra detail in a linked data room.
Should I include bad news in an investor letter?
Yes. Say what missed plan and what you are doing about it. Investors check your statements anyway, so it is better they hear it from you.
Who should review the letter before I send it?
Many sponsors ask their own securities attorney. I am not giving legal advice, so talk to your counsel about what makes sense for you.
Related questions
- How do I communicate with investors when a deal underperforms?Tell investors early, plainly and in the way they prefer to be reached.
- How do I turn existing investors into repeat investors?You turn investors into repeat investors by earning trust on the first deal and keeping everything simple and clear.
- How do capital calls work for LPs?A capital call is a request from the GP asking LPs to send in part of the money they already committed.
- How often should I send investor updates?There is no single rule, but a short update every quarter is a common baseline for private investments, with a quick note in between when something material happens.
Work through it with the investor meeting follow-up checklist. See all follow-up and investor relations resources.