Are you wondering how often to update your investors after acquiring a small or medium-sized business (SMB)? You’re not alone. Finding the right balance between keeping investors informed and spending too much time on reporting challenges many entrepreneurs.
For business buyers who’ve raised capital, maintaining strong investor relationships is crucial for long-term success. Regular, meaningful updates on business performance and strategic initiatives form the foundation of these relationships. But what’s the ideal frequency, and what information should you include?
A recent discussion among search fund entrepreneurs, operators, and investors revealed valuable insights into investor communication best practices. We’ve analyzed these perspectives to provide you with clear guidance on creating an effective investor update cadence.
The Ideal Frequency: Quarterly vs. Monthly
The consensus among experienced investors and operators points to quarterly updates as the industry standard. However, monthly communications represent the gold standard for those willing to commit to a more rigorous schedule.
Quarterly Updates: The Baseline Standard
Quarterly updates align naturally with financial reporting periods and provide sufficient time to demonstrate meaningful progress between communications. As Clifford Nelson, CEO at PsychoGeriatric Services, noted: “In normal sourcing mode for a general update, I think quarterly is the sweet spot. That is a long enough time period that you will show movement on your pipeline and themes from one to the next but also short enough that you can get feedback before investing too much time in a bad industry.”
Juan Gomez, a private investor and syndicate lead, confirmed this approach, stating that “Quarterly is pretty standard,” while adding that more frequent communication may be necessary “if there is a pressing issue that should be communicated.”
Monthly Updates: The Gold Standard
While quarterly may be sufficient, several experienced operators and investors advocated for monthly updates.
Travis Jamison from CapitalPad observed, “I’m convinced that the more frequent the update the better the actual company does,” attributing this correlation to increased accountability, goal tracking, and the opportunity for timely investor support.
Nicholas Evans, CEO at QBench, endorsed this approach from personal experience: “I did quarterly during the search to people that were potential investors, and now do monthly of key metrics to current investors. Our board really appreciates getting the monthly updates. I would highly recommend keeping it simple and doing it monthly.”
Mark Delaney, a solo searcher and the original discussion initiator, agreed with this sentiment, noting that “most investors really would prefer monthly, but will settle for quarterly.”
Different Phases, Different Needs: Adapting Your Update Frequency
The appropriate frequency of investor updates varies depending on which stage of your acquisition journey you’re in. Let’s break it down:
During the Search Phase
During your search phase, when you’re actively looking for businesses to acquire, quarterly general updates provide a good balance. You’ll want to increase communication frequency during critical periods:
- Quarterly: Send comprehensive pipeline updates and industry themes
- Ad hoc: Provide immediate updates for significant opportunities or when seeking tactical advice
- Bi-weekly or weekly: Increase to more frequent updates during post-LOI due diligence
Post-Acquisition
After you’ve acquired a business, a structured approach to investor communications becomes even more important. Your investors will expect:
- Initial update: A comprehensive report within 30 days post-close
- Ongoing updates: Typically quarterly reports following board meetings
- Ad hoc communications: Immediate updates for major developments (significant new customers, unexpected challenges, etc.)
As Mark Sinatra, Founder of ETA Equity and CEO of Aspen HR, explained: “Post-acquisition, I usually will see an update within 30 days post-close. Afterwards the investor update is typically on a quarterly cadence after each Board meeting.”
Content: What to Include in Your Updates
The most effective investor updates combine high-level summaries with appropriate financial details:
Essential Components of Effective Investor Updates
What should you include in your investor updates? Focus on these five key areas:
- Executive Summary: Brief overview of current business performance
- Key Wins and Challenges: Honest assessment of positive developments and obstacles
- Financial Performance: Core metrics and comparison to projections
- Strategic Initiatives: Progress on major management initiatives
- Forward Outlook: Near-term priorities and expectations
Brian Macauley, Co-founder and Portfolio Manager at Broad Run Investment Management, recommended “a paragraph or two summarizing revenue and profit trends, positive and negative surprises, and major management initiatives” for quarterly updates, with “a more extensive update with a page or two written summary” annually.
Depth and Transparency
Josh Hyde, a Private Equity Professional, emphasized that regardless of frequency, updates should be “fulsome, provide in-depth insights into what is going on in the business, and released in a timely manner. Slim, non-detailed, and late investor updates are not helpful and do not provide comfort to investors.”
Communication Formats: Finding the Right Mix for Maximum Impact
How should you deliver your investor updates? Different formats serve different purposes in your investor communication strategy. Consider this mix:
Written Updates
Written updates form the foundation of most investor communication programs. An effective written update should be:
- Standardized in format for easy comparison over time
- Concise but thorough (typically 1-3 pages)
- Inclusive of key financial metrics and qualitative insights
- Well-organized with clear section headings
Live Interactions
Many successful operators complement written updates with periodic live communication. Consider incorporating:
- Quarterly video or phone calls to discuss results and answer questions
- Annual in-person investor day for deeper engagement and relationship building
- Ad hoc calls for time-sensitive matters that require immediate attention
Andy Hill, Founder & CEO of Sundial, shared their approach: “We host quarterly investor summits + an annual investor day in person. We like and works well.”
Alycia Doxon, an Acquirer & Operator, described a hybrid approach: “We send standardized monthly financial/growth updates, and have a live call quarterly. It’s a little bit heavy on communications, but from experience managing companies who have raised millions in funding, I err on the side of over-communicating.”
Benefits Beyond Obligation: Why Regular Updates Boost Your Business
Creating investor updates isn’t just about fulfilling an obligation. It’s a strategic exercise that delivers multiple benefits for your business. Here’s how regular updates add value:
Investor Relationship Management
Regular communication builds trust and keeps investors engaged, which can be valuable if you need additional capital or support in the future. As Brian Macauley noted, “you may find that you need additional capital or support at some later stage.”
Strategic Self-Reflection
The process of creating updates forces operators to reflect on business performance and articulate challenges and opportunities. Travis Jamison likened this to “owner-journaling” with benefits including “self-transparency, goal tracking, etc.”
Josh Hyde reinforced this point: “requiring monthly [updates] is also great as it makes the operators do some reflection and thinking that they likely normally would not do.”
This forced reflection often leads to better business decisions and more proactive management.
Accessing Investor Expertise
Regular updates create opportunities for investors to provide timely assistance based on their expertise. Travis Jamison shared a personal example: “I help my portfolio companies with SEO, but if I only hear from them on a quarterly basis, then a lot of bad stuff could have happened before I could step in to help fix it.”
Conclusion: Finding Your Ideal Investor Update Rhythm
While quarterly updates represent the industry standard, most investors prefer monthly communication when possible. The key is finding a cadence that works for you and your investors. Your update schedule should:
- Provide meaningful insights without creating excessive administrative burden
- Enable timely intervention when challenges arise
- Create opportunities for strategic reflection
- Build and maintain investor trust through transparency
Worried about the time commitment? Paul Rhynard of FOG Capital offers reassurance that quarterly written updates “takes you a few hours to pull together, so isn’t a huge burden.”
Nicholas Evans captures the pragmatic approach endorsed by many successful operators: “I would highly recommend keeping it simple and doing it monthly.”
By establishing clear communication protocols from the outset—whether monthly, quarterly, or a hybrid approach—you can transform investor updates from a mere obligation into a valuable strategic exercise that strengthens relationships and improves business performance.
Key Takeaways
- Industry standard: Quarterly updates following board meetings
- Best practice: Monthly updates for more engaged investors
- Format mix: Combine written updates with periodic calls or meetings
- Content focus: Include executive summary, financials, wins/challenges, and forward outlook
- Strategic value: Updates create accountability, reflection opportunities, and access to investor expertise
Start with a sustainable rhythm that you can maintain consistently. Remember that regular, transparent communication builds the trust that may prove invaluable when you need additional capital or support in the future.
Frequently Asked Questions (FAQ)
Most effective investor updates are 1-3 pages long. They should be concise enough to read quickly but detailed enough to provide meaningful insights into business performance. Focus on key metrics, major developments, and strategic initiatives rather than day-to-day operational details.
Include key performance indicators like revenue, gross margin, EBITDA, and cash position. Compare current performance to both prior periods and projections/budget. For quarterly updates, consider including simplified financial statements (income statement, balance sheet highlights, and cash flow summary).
Yes, absolutely. Transparency about challenges builds credibility and trust. When sharing bad news, pair it with your action plan to address the issue. Investors appreciate honesty and generally respond better to early disclosure of problems rather than surprises later on.
The formality level should match your relationship with investors and your company culture. Most effective updates have a professional structure but a conversational tone. Standardize the format for consistency while maintaining your authentic voice.
Many operators use a combination of:
- Excel or Google Sheets for financial data
- Word, Google Docs, or specialized platforms like Visible or Causal for the narrative
- Email, secure portals, or investor management platforms for distribution Choose tools that make the process efficient and sustainable for your team.
While the core update should be standardized, consider adding personalized notes for investors who have specific interests or expertise. For major investors or board members, you might include additional details relevant to their areas of focus.
Be transparent about performance and challenges while protecting sensitive information like customer names, proprietary technology details, or unannounced strategic initiatives. Consider adding a confidentiality notice to your updates and being clear about what information should not be shared externally.
Key considerations include the depth of client relationships, complexity of services provided, staff experience levels, and seasonal workflow patterns. The transition agreement should include clearly defined responsibilities, compensation structure, performance expectations, and a communication protocol for client handoffs. A phased reduction in seller involvement often works best for accounting firm acquisitions.
As your business matures, your updates should evolve:
- Early post-acquisition: Focus on transition, integration, and establishing baseline operations
- Growth phase: Emphasize scaling metrics, market expansion, and team building
- Mature operations: Highlight efficiency improvements, strategic initiatives, and long-term planning Listen to investor feedback and adjust your updates to provide the most valuable information.
To mitigate these risks when purchasing an accounting business, implement thorough due diligence, well-structured transition agreements, strong staff retention initiatives, clear client communication plans, and maintain adequate capital reserves for unexpected challenges. Each of these strategies helps protect your investment in the accounting practice.
If investors aren’t responding to or engaging with your updates, consider:
- Asking directly what information would be most valuable to them
- Shortening updates to increase readability
- Adding an “executive summary” section at the top
- Including specific questions or areas where you’d appreciate input Remember that lack of response doesn’t necessarily indicate lack of interest—many investors read updates carefully without replying.
Anticipate questions by thinking critically about your own update. Identify areas where performance deviated from expectations, new initiatives were introduced, or strategic shifts occurred. Prepare supporting data and rationale for key decisions. Consider scheduling a call or meeting shortly after distributing significant updates to address questions efficiently.
