Best practices for shareholder updates

Your shareholders want to hear from you and are looking for ways to champion your brand. Keeping them informed on the company is both a good strategy for business marketing and also a requirement as a steward of their investment. You should be communicating with investors Quarterly (at a minimum) in addition to hosting your Annual General Meeting (AGM).

• You should start communicating with your shareholders immediately after your FrontFundr campaign closes. You want to maintain their enthusiasm as a passionate brand champion.
• As co-owners of the company, your shareholders are going to want to share exciting news about your progress with their friends and family. Equip them with the messaging to support you with word of mouth marketing.
• It’s important to be transparent with investors. They want to know about the successes and the setbacks that
• your business faces. You should be providing a holistic view of the company with tangible facts and figures.‍

‍Regular investor updates are critical for maintaining shareholder relationships.‍

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Types of Shareholder Updates ✉️

To get started with shareholder updates, you can add your shareholder to your CRM or email marketing tool so that you have a mailing list to reach out to every quarter. There are generally two primary forms of keeping your shareholders updated:

1. Written Shareholder Updates: These are updates in the form of reports, letters, and/or email newsletters that a company shares periodically with its investors. We recommend sharing a written update Quarterly.

2. Virtual Shareholder Meetings: Companies are required to how an Annual General Meeting (AGM). However, you could also look to host virtual investor events throughout the year. These events are a good way to build personal relationships with shareholders by allowing them to ask questions directly to the executive team.

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Update Foundations 📚

1. Efficiency: Getting the investor's attention is important because an average person receives 100-120 emails per day. We recommend you summarize your update in the beginning and keep the update precise and comprehensive.

2. Transparency: Take a page out of the Warren Buffett playbook to be honest and transparent with your shareholders. This will help you build trust and credibility that could serve you well in future financing rounds.

3. Consistency: Spend some time determining the format and frequency in which you plan to keep investors updated. Consistency is key so ensure you have set a reasonable communication plan for the business to achieve.

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Essentials to Discuss💻

There are so many exciting things to talk about in your shareholder updates. If you're not sure where to get started, below are some essentials we recommend talking about in each shareholder update:

1. Metrics & Data
2. Business Updates
3. Challenges
4. Goals & Future Targets
5. Investor Requests

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1. Metrics & Data 📊

Integrating metrics and data can help paint a clearer picture of your business’ journey and growth. Provide necessary context around each metric so the investor can easily compare and comprehend its trajectory.

We recommend focusing on a few Key Performance Indicators (KPI) and showing progress against those metrics in every update. Some of these KPIs can include:

• Revenue 
• Customer Acquisition Cost 
• Margins 
• Number of Active Users 

“We tested out a new B2C vendor which helped us increase our revenue. Our Q3 revenues landed at 1.2x forecasted, generating a total revenue of $81,000. This is 30% higher than the last quarter.”

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2. Business Updates 📂

Take this opportunity to talk about your key wins across different departments of your business. Did you hire a new Product Manager, revamp your website, or find a new office space? We typically see two forms of business updates:

1. Combine all key updates into a single bullet point list
2. Segment your update according to key business functions

Examples

• We hired a full time Marketing Manager that will help us with our growth marketing plans.
• We launched our very first TikTok advertising campaign last month.
• We signed 12 new clients this quarter and are on track to accomplish our goal of signing 56 clients in 2022.

Tip: There is nothing too small to share, your investors will love being part of the journey.

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3. Business Challenges 🫤

It’s inevitable that businesses will all come across their own set of challenges. This could include:

• Difficulties hiring for a niche role
• Not hitting growth targets due to a shift in the economy
• A global pandemic that has changed consumer trends
• Turnover in a particular team that has impacted performance
• And more…

It can be intimidating to share your challenges but it helps to establish trust and accountability. It could also lead to positive developments for the business. One of your investors could have a contact for the role you’re hiring for.

“Unfortunately, we are still having difficulty hiring web developers to re-design our website. We are currently looking into getting a freelancer to help us on a project basis rather than looking for a permanent full-time employee.”

Tip: Remember to always address the how and the why. 

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4. Goals & Targets 🎯

In addition to highlighting past performance, it’s important to let investors know what you’re hoping to achieve next. Even if that includes updating your forecasts and targets from the previous quarter due to changes in the market.

Sharing your upcoming goals and targets allows investors to have a better understanding of the future of your business and perhaps can lead to some reaching out with valuable connections to help get you there.

Example - Key Objectives for Q4:

• Complete the website revamp 
• Increase our newsletter subscribers from 15000 to 25000 
• Reach $60,000 in monthly revenues 
• Accomplish our goal of signing 56 new clients by the end of the financial year 

Tip: Be clear and concise with the future goals and targets shared with investors. 

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5. Shareholder Requests 💌

Your shareholders want to help. They invested in your business because they believe in your mission and want to help support you getting there. So don’t be afraid to ask for their help. This could include:

• Sharing your posts on Instagram to help grow your brand awareness
• Introducing you to potential new investors for an upcoming financing round
• Providing feedback on a new product
• Sharing a job posting with their network
• And more…

“Our product has made it to the final round of Vegan Food & Living Reader Awards 2022. You can show your support by voting for us here!”

Tip: Don’t underestimate the power of your shareholder network.

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Building Connection 🫶🏻

Shareholders updates help you to build and maintain good relationships with your shareholders which can help your business in the long run. That is why adding a personal touch to your update is so important.

You can add a more personal touch to your update by:

• Adding a closing statement that thanks shareholders for their support
• Showing some photos of the team working to achieve your goals
• Signing off the shareholder update with your actual signature

Tip: Warren Buffet always adds a Thank You section to his shareholder updates. 

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Format & Medium ✍🏻

Now that we’ve shared some shareholder update essentials, it’s time to start writing and sharing your own business updates.

1. Writing your update: To help get the process started, we’ve created a template that you can leverage to write your first shareholder update. Keep in mind that according to the size and state of your business, the format of your updates may be different.

2. Sharing your update: To send your updates, we recommend using whatever CRM or email marketing system you already use. But did you know that you can also send your shareholder updates through FrontFundr?

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Adding an Update on FrontFundr 

To send a shareholder update, you can Communication tab of your Issuer Portal. You can send your update via email and post it to your shareholder's investor dashboards on FrontFundr. When going to send your campaign update, you can select Campaign (Shareholders) to reach investors from your campaign and Contacts (Shareholders) if you added any external shareholders to your distribution list. To post it to the platform, select Platform update and then Shareholder update - this will post internally to your shareholders dashboards only and not to the public facing campaign page.