How to Write Great Investor Updates: A CFO's Guide

Talk to enough founders, and you start to notice a pattern.

It’s not that they ignore finance. It’s that they misunderstand what it’s really for.

They think it’s bookkeeping. Compliance. Something to clean up before a raise. Something you can delay until you’re “ready.”

But that mindset leads to all kinds of second-order problems: runway erosion, blown forecasts, hiring mistakes, missed investor expectations. It slows you down when you need to speed up. It causes panic when you need clarity.

The biggest mistake early-stage companies make is thinking finance is about tracking dollars, when it’s really about directing them.

Here’s what I’ve learned after 100+ conversations with founders:

1. Founders Confuse Headcount With Growth

I had a conversation with a founder right after they closed their Seed round. Their instinct was to go on offense: “Time to grow the team.”

So I asked a simple question: “What new contracts are signed for the next 3-6 months?”

They paused. Then they started talking about pipeline. A few good conversations. Maybe a couple of pilots. But nothing closed. Nothing predictable.

We did a quick back-of-the-envelope calculation. If they hired the 3-5 roles they were planning, their monthly burn would triple. That would cut their 18-month runway down to eight.

That’s how fast a Seed round disappears.

This is a common trap: hire for anticipated revenue instead of confirmed revenue. It’s how optimism becomes overextension. And it’s why scrappy execution will almost always beat premature scaling.

We walked it back. Together, we:

Built a simple, rolling cashflow model
Focused hiring only on roles tied to actual delivery or revenue
Made a rule: let sales prove it out before you scale headcount

It’s not about being conservative. It’s about protecting optionality. Founders assume hiring is the growth plan. But if you don’t have the traction to justify it, you’re just accelerating your own risk.

2. Fast Growth Is NOT Fundable Growth

Another call. Two co-founders. Great product. 100% YoY growth. Their board is hyping up Series A readiness. Everyone’s celebrating.

Within one hour, we found the blind spot that could tank their next raise.

All their growth was inbound. No outbound motion. No marketing engine. No tested paid channels. Just product-market fit and good timing.

Worse, burn was already high, mostly from R&D spend. None of it was tied to revenue expansion.

That’s when we talked through what Series A investors really fund:

GTM maturity: Can you acquire customers predictably, not just organically?
Use of proceeds: If you raise $5M-$10M, where does it go and what will it unlock?
Revenue efficiency: What’s your payback period, margin, and cost to serve?

We pressure tested their roadmap. What R&D features actually unlocked revenue in the next 6-12 months? Where were dollars being burned with no upside? What would it take to build GTM muscle before raising?

This is the gap I see most often: strong product, happy customers, but no repeatable growth engine.

You’re not Series A ready just because the graph is up and to the right. You’re Series A ready when you can show how you’ll spend the next $10M and exactly how that spend drives outcomes.

3. Preserving Runway Is NOT A Strategy

“I just want to preserve runway as long as possible.”

Founders say this to me all the time. And I get it. Capital efficiency is in the air. But there’s a difference between being careful and being stuck.

One founder wanted their Seed round to last 36 months. Impressive on paper. But they hadn’t hit $1M ARR. Hadn’t launched their next product. Hadn’t moved key hires forward.

The role of capital is to unlock milestones. Not to sit in the bank.

We reframed the conversation:

What’s the milestone that drives your next round or valuation inflection?
What assumptions need to hold true to get there?
What’s the minimum capital required to validate those assumptions?

They didn’t need to spend more. They needed to spend intentionally.

Investors don’t reward founders for underspending. They reward founders for hitting plan. The only thing worse than burning fast is spending nothing and missing your goals anyway.

4. Your Time Budget Is Your Growth Budget

A founder once told me they couldn’t find 30 minutes for a finance strategy call.

Why? They were buried in operational admin: chasing invoices, fixing bookkeeper mistakes, manually patching together forecasts in Google Sheets.

They were also doing founder-led sales, onboarding new customers, and trying to hire an engineer.

The math was simple: they were spending 5-10 hours a week on finance tasks that a $50/hour professional could do faster and better.

This is the time leak that kills early-stage growth. Founders think they’re saving money by doing it themselves — but they’re burning the most valuable resource they have: focus.

The first system every founder should build is buying back their own time. Finance is a cost center. Its value comes from saving you hours so you can redirect that time into the business.

You didn’t raise money to be a part-time bookkeeper. You raised it to be a full-time CEO.

5. Founders Know Their Finance Function Is Broken But STILL Wait Too Long

In the past six months, I’ve had dozens of conversations that start like this:

“Our bookkeeper is okay, but we don’t really get reports.”
“We only know something’s wrong when it’s urgent.”
“We’ll bring in real finance help once we raise.”

Then three months later:

❌ The board is furious about a missed forecast

❌ The team is scrambling during diligence

❌ Someone realizes runway math was off due to HST or SR&ED timing

Second-time founders always say the same thing: “I waited too long last time and it burned me. I’m not doing that again.”

It’s not about perfection. It’s about systems. The founders who win are the ones who build structure before they scale. So when growth hits or investors come calling, they’re ready.

Final Thoughts

Every founder has blind spots. That’s normal. What matters is how you surface them — and how quickly you respond.

Finance isn’t the fire extinguisher you pull out when the forecast goes sideways. It’s the infrastructure that helps you steer better, hire smarter, raise confidently, and stay ahead of surprises.

You don’t have to do everything today. Start by asking the right questions early so your options stay open later. Build the habit. Make time. Ask for help.