Less than half the startups I've invested in send me regular investor updates. The bar is unfortunately very low these days to be considered a founder who investors will want to back multiple times.
Why Founders Who Ghost Their Investors Are Failing at Everything Else Too
The Catch-Up Call
Every VC knows exactly what's going on when a founder wants to "catch up" after years of silence. And wait for it... they want more money!
I've said no exactly 100% of the time. And so do most of the other investors on the cap table.
Communication Reveals Character
If a founder can't send their investors regular updates, what does that say about how they communicate with their customers and employees?
More often than not, if they can't spend 30 minutes every quarter to write an update, they're disorganized and making lots of other mistakes too. Their website is out of date. Their LinkedIn presence is dead. There's no press or anything.
In most instances, the company isn't doing well, but I don't know why the founder is burying their head in the sand. Investors can help you! That's the whole point. If you want to learn how to become a better CEO, start by keeping your stakeholders in the loop.
The Exception
The exception is when they're late stage and have a board. But even in those cases, most still have the courtesy to send a high level update.
And before some smart-ass suggests negotiating information rights... it's BS to need to assert those rights. That's like saying I should micromanage my employees. Why even keep them in the first place?
The Bottom Line
Regular investor communication isn't just courtesy. It's a signal of how organized you are as a founder. If you can't manage 30 minutes a quarter for updates, you're probably dropping the ball elsewhere too. And when you finally reach out after years of silence asking for money, don't be surprised when every investor on your cap table says no.
The founders who build lasting relationships with their investors are the same ones who build lasting relationships with customers and employees. Communication compounds. Silence does too, but in the wrong direction.
Looking to avoid the pitfalls that sink most startups? Learn how one founder turned a bad startup into a $780M exit by doing things differently.