I remember when we hired a new CEO for one of our portfolio companies and my tip to him was to overcommunicate. We had a few large VCs on the board and a number of high-profile angels that could also help in various ways. His job was to keep everyone up-to-date but also to know how to get help when he needed it and from whom. Given today's excitement over seed investing it is not uncommon for many of today's entrepreneurs to have 5-15 investors in any given round. How you effectively communicate with your investors is an important priority that if done right will give you major value add while also not taking too much of your time.
In order to help our new CEO, I reached out to all of the other investors, and we all agreed that if we all spoke to him a few days a week about the same information that he would not have time to run his business. In addition, this would be redundant for the CEO since most investors were asking for the same basic information. In the spirit of streamlining information flow, we worked with the CEO to put together a weekly email to provide us with the key metrics the company tracked along with departmental updates on key high priority projects. We weren't asking the company to create something they shouldn't already have (key metrics, departmental priorities, cash balance) but rather we just wanted the data shared on a timely basis. Over time, we all found that when we did speak with the management team that we did not have to spend a half hour gathering information but rather we could get right to the point and actually discuss the whys or hows on certain sales numbers, metrics, or prospects. In the end, we were all much happier and more productive since we had the same baseline of information and could focus our energy on productive and deeper conversation on the business stategy rather than gathering basic data.
Over the last 6 months I have made a number of seed investments and have shared the following company update with them. Each CEO has had their own minor tweak but this should give you a sense of what investors may be looking for and how it can help you streamline your communication and focus on how to extract value from your many investors. If you choose to update weekly then obviously it will most likely be a shorter piece with maybe only the cash burned and current cash on hand as the financials. If you choose to send out a report monthly then it may be more like the form I have uploaded on docstoc.
One other important note I forgot to highlight is that since many companies I invest in are web-based and therefore many of them have real-time metrics I can track. Michael Robertson who started Mp3.com and Gizmo5 (sold to Google Voice) had one of the best real-time dashboards for tracking his business. I could see number of downloads, minutes used, new paying customers, etc. whenever i wanted to by logging into the system. Other companies have created an investor wiki or use status.net (full disclosure-a BOLDstart seed investment) or other communication platforms for investors to share ideas and information. I only imagine this will even get only better in the future.
Anyway, enjoy and I hope to hear some feedback on what is missing or what may be too much information.