Sharing accurate KPIs and honest updates in your monthly investor reporting is your secret weapon: It builds trust and unlocks future funding.

It’s the end of the month again. The monthly investor reporting is due, besides tons of other end-of-month tasks.

Some time ago, I suggested to my investors to decrease the investor reporting frequency from monthly to quarterly. My suggestion was promptly declined by our long-time lead investor from the Seed round. Because the investor didn’t explain why he declined my suggestion, I decided to shut up and keep on carrying on with monthly reports.

Just a few months later, this would pay off handsomely.

At Yonder, we had to redistribute a 2nd closing ticket from our recent Series A round because one of our investors decided to reduce their ticket size. They did so because a few very large deals were delayed again and again, and as a consequence, we were deviating from our initial growth plans. That’s how business works — bad news affects the initial plans, and there is nothing you can do apart from being honest about bad news.

When those large deals finally showed up on the horizon, I called all our existing investors and asked about their investment appetite for the 2nd closing ticket of our Series A.

One of our investors confirmed a quarter of the entire ticket straight in the first call.

The reason was that we enjoyed high levels of trust with that investor. With them being a passive investor, their primary source of information about our company is our monthly investor reporting. In that call, I was told that we are one of their only portfolio companies that delivers a complete and accurate set of numbers every month, and very specifically, that we are one of their only portfolio companies also sharing bad news with investors.

I was awed. A quarter of my fundraising problem just disappeared in one call, because of one single investor reporting document I send around every month, plus or minus on time.

Just to reassure you, our investor reporting is not that extensive. Here are the parameters I regularly report on:

Pipeline KPIs

  • Number of marketing qualified leads (MQL)
  • Number of sales qualified leads (SQL)
  • Sales pipeline current year
  • Sales pipeline next year
  • Number of customers
  • Number of active users on our platform

Revenue KPIs

  • Recurring revenue
  • Non-recurring revenue
  • Order intake
  • Contracted ARR

Expense KPIs

  • Salaries internal employees
  • Salaries external employees
  • Other costs
  • Number of FTEs
  • Number of heads

Liquidity KPIs

  • Cash level
  • Open debtors
  • Open creditors
  • Available credit lines
  • Used credit lines

Highlights / Lowlights

  • Highlights are typically won deals. I have stopped mentioning positive signals in the sales phase as highlights, as most of our sales get delayed from the customer side for various reasons.
  • Lowlights are typically lost and/or delayed deals.

I have a master data file where I record all the KPIs every month and then put them together nicely in a set of 5 slides with tables showing the development of each KPI over the year.

Now that the above setup is active, the monthly investor reporting gives me around 1 hour of work every month.

That’s a very small effort to build trust with your long-time investors.