Investor Reports

Investors love reports, and for good reason. They want to know how their money is being put to use. They want to see your current books and that you’re using the accrual basis accounting method. At a minimum, investor reports should include your monthly profit and loss, balance sheet, and cash flow statements. The more mature your company is, the more information investors will want to see.

The benefits of providing investor reports isn’t limited to the investors themselves. According to, 83 percent of investors say startups that communicate with them perform better, and 77 percent say they’re more likely to invest in startups that do communicate. However, only 18 percent of entrepreneurs provide monthly operational updates, and only 24 percent provide any relevant information at all. You’ll launch yourself ahead of the startup curve if you provide relevant, timely reports to your investors.

While the numbers prove the benefits of investor reporting, the process of creating them isn’t always easy. You need tools and formal procedures in place to ensure accurate reports are generated regularly.

Key Elements of Investor Reports

Ideally, you’d like to generate your investor reports monthly. However, if your business is still small and revenue generation is slow, quarterly reports probably make more sense. Yearly reports are also an option, but understand the risks you run by keeping investors in the dark for too long. They may begin to believe your company’s growth has become stagnant or that you, as an entrepreneur, are not as on-the-ball as you need them to believe. Do your best to keep them in the loop throughout your business’s lifecycle.

However, you should also keep in mind that reporting more than monthly isn’t a great idea either. Little will change from one report to the next, and the influx of information might annoy your investors.

Once you nail down the frequency of your investor reports, here are some basic elements you should consider including in them (relative to the time period of your report):

  • Breakdowns of revenue and expenses

  • The rate at which you’re spending your capital (burn rate)

  • Cash in the bank

  • Earnings before interest, tax, depreciation, and amortization (EBITDA)

  • The percentage rate at which customers stop subscribing to your service (churn rate)

  • The dollar value of new customers

  • A prediction of your net profit from current customers (customer lifetime value or CLV)

  • The number of orders per customer

  • The average amount of time each customer spends on your site before placing an order

  • The total numbers of user accounts, active users, and paying users

  • Any changes in your product strategy (new versions, user experience or interface changes, new features or platforms, etc.)

  • Lists of new hires and terminations

  • Your marketing strategy

  • Any new partnerships or expansion plans

  • Operational changes

  • Press releases or updates

  • Any new or additional funding, mergers, or acquisitions

  • Any notable events

  • Requests for feedback

At the end of the day, you and your investors have the same goal: to see your business succeed. Include anything and everything in your reports that can help indicate the performance of your business, but be respectful of the time it takes to review the reports and learn about your company. Focus on KPIs, cost drivers, actuals vs. forecasted amounts, and growth opportunities. If it isn’t directly related to your business’s performance, don’t include it. Don’t hide flaws and inflate successes. Be open and honest with your investors, and watch your company flourish as a result.