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How to Raise Capital via Newsletter Updates

If you’re a startup founder seeking funding, you may be missing the invaluable potential that lies hidden in your investor newsletter. As guest writer Eric Bahn points out in his article below, your investor newsletter is the single best platform to tell your story and, if you get it perfectly on point, it may be all investors need to make the decision to fund your startup.   

Read on for actionable steps you can take to unleash the potential of your investment newsletter or visit the Acceleration for All page – an exciting and inclusive startup awards program powered by ViewSonic and Hustle Fund.  

Eric BahnEric Bahn is a co-founder and General Partner at Hustle Fund. Prior to Hustle Fund, Eric was an angel investor and partner at 500 Startups. Before becoming a professional investor, he spent over a decade as an operator (Facebook, Instagram) and entrepreneur (Beat The GMAT). Eric is a native of Detroit, Michigan, and attended Stanford University (BA, MA), which launched his career into software and startups. Eric is happily married with two kids, loves minivans, and helps lead the Hustle Fund team from his garage in the Bay Area.

Founders often don’t realize that they have a powerful tool for raising capital – their investor newsletter. This article will show you why an investor newsletter is one of the most effective ways to fundraise and how to write a newsletter that converts!  

Your investor newsletter is essentially a two-pronged engagement campaign:

  1. Your current investors are kept warm and engaged for future rounds 
  2. Prospective investors are drip-fed important and regular updates that build FOMO 

Your earliest investors are often your biggest supporters, they believed in you before anyone else did. Communicating with them regularly via a newsletter shows that you appreciate them and are bringing them along with you on your journey. 

Investors are more likely to participate in your future rounds if they have been kept in the loop with regular updates. Make them feel part of your business and they’ll become your biggest cheerleaders and will refer you to their friends and contacts. 

As you and your business are introduced to more people, the number of non-investors on your newsletter email list should grow exponentially over time. At Hustle Fund, our newsletter list of investors to non-investors is about a 1:4 ratio.

It’s important to keep more non-investors than investors on your list to build momentum and increase FOMO. When your next raise is coming up, you can signal this subtlety and elegantly in your newsletters.

How to Raise Capital via Newsletter Updates

Consistency Is King

An effective investor newsletter shows, not tells. 

The content of the newsletter shows investors what you have been working on, what you are thinking the whys behind your actions, and what your plans are next. It is important to be transparent and honest. You control the narrative.

But even more importantly, sticking to a strict cadence shows that you are a persistent, mature, and disciplined founder

We at Hustle Fund send out our monthly investor newsletter at midnight on the dot on the first day of each month. It is like a pulse. We have never missed a single deadline. 

In fact, our very last investor said just by virtue that we were so consistent and transparent in our investor newsletters… never missing that date… became the key reason to push him over the edge to decide to invest in Hustle Fund, and with a pretty substantial check. Yay for us!

Show Your Evolution

Your investor newsletters become like a time capsule of your business. It is fascinating for investors to look back at years of history from your newsletters to see the evolution of your business. 

Again, investors love being taken on a journey. How you are growing a business from literally nothing and what methods you are using to track your progress. If you can take people on that journey, about why you are measuring certain things, and why they are the best measure of your progress – that is so fascinating, especially in pre-revenue businesses. This is all part of the storytelling

For example, take the view of a Series B investor. They read the last three years of your updates and see the evolution from what you were measuring from the beginning and why, to your present valuation. It is interesting to see your progress, your adaptability and your growth mindset. It shows a sort of longitudinal view that doesn’t stop until your IPO. One day, you may even end up as the subject of an epic VC Twitter thread.

How to Raise Capital via Newsletter Updates

So, What’s a Good Newsletter Template?

Take a look at the template we successfully use at Hustle Fund, and here we’ll explain a little more about our thinking behind the structure.  

  • Start with a fun personal update

Investors are human too. A fun or personal update gives some color and personality to the newsletter and you may get replies back asking more about what happened etc. Engagement!

  • Add a TLDR summary at the top

Include the good bits and don’t be afraid to put some bad bits here. Highlight any calls for help.

  • Add a Calendly link to book 15 minutes with you

It’s fine to put this link this early in the newsletter. We’ve had surprising people contact us for a quick chat via this link.

  • Remind investors what your company does

They receive so many newsletters so it’s a good memory jogger, and they may forward it onto their connections who most likely don’t know you yet.

  • Make a ‘Key Asks’ section for requests for help

Ask upfront if you need help. It makes people feel like you can be trusted. This can be as simple as hiring recommendations or more substantial help.

  • Talk about the previous month’s goals and what went well/poorly

Your investors never want to be surprised by bad news, or even by good news! By being transparent about the highlights and lowlights of your business, your investors might have a way to help you in unforeseen ways. 

  • Key highlights from the current month

Include key metrics like MoM rev, burn rate, key hires, etc. Even pre-revenue startups have things they can share such as co-commits, media/branding, or partnership talks. The most interesting thing about what you measure is why. There’s usually something founders are measuring against. Investors love to know that.

  • Thank you’s 

Name dropping – people love to hear their own name and love kudos. It’s a good human thing to do. And remember your newsletter has multiplying effects. 

Sometimes we have 20 names on ours with very specific examples. Putting thank you’s at the end of the newsletter is a conditioning behavior, they will read to the end! 

How to Raise Capital via Newsletter Updates

Track the State of Your FOMO

Use open tracking tools to do some segmentation into who is consistently opening the newsletter and who isn’t so much. Track non-investors who are opening it and clicking through and who are not. 

It’s not a perfect signal but it’s pretty helpful in case you want to slice and dice your newsletter audience segments with some more tailored engagement when you’re ready to fundraise. 

How to Raise Capital via Newsletter Updates

Finally, Some Last Bits of Advice

Regardless of interest, always end a meeting with a prospective investor by inviting them to join your newsletter list. They will more often say yes than no. 

When people do opt in, send them your last month’s newsletter straight away as a cookie. It’s a nice touch and conditions them about what to expect in future newsletters. 

No is not a no unless it is explicit. Then, respect that. Take them off your list or don’t add them. You don’t want to spam and be a nuisance – it’s not good karma. 

Assume the newsletter will be shared, so be careful about sending sensitive things like detailed roadmaps. Some information triage is required.

Publish your newsletter at the same time, whether weekly, monthly, or quarterly, and be very disciplined about it. It’s also a pretty good pulse check for your own sense of your business – it gives you a regular chance to reflect and course-correct. Share it with your employees.

How to Raise Capital via Newsletter Updates

Don’t be stressed if you do miss a newsletter deadline, just send it as quickly as possible. Investors understand life gets in the way. 

Tease your next raise via your newsletter to your insiders first. The best newsletters have a clubby feel. The person reading the newsletter has an insider advantage to jump the queue – to pre-empt the allocation before the round opens.

The ultimate goal if you pull off a persuasive investor newsletter is you never have to do a pitch deck ever again. Ever. Investors will have seen your progress and they will fight to get in on your cap table. 

This article forms part of a series of guest posts by Eric Bahn to help provide fresh startups with valuable funding insights directly from VCs. If you’re a founder looking to turn your passion into profession, check out the Acceleration for All Awards for the chance to get funding and win productivity-driven displays from ViewSonic for you and your team. You can also visit the ViewSonic workplace solutions page for more insights into tech in the modern workplace.