Of course, investor reporting is very individual and, above all, depends on the business model of the start-up in question. Nevertheless, we would like to share a few general tips that Sebastian Bärhold, investor and co-founder of IDnow, told us in an interview with finway.
Dos & Don’ts: This is how efficient investor reporting works
The most important question: What do you want to share with investors?
The question of whether to disclose all figures and developments in investor reporting or whether to integrate only what is specifically requested in the reporting is not only a question of taste. To a certain extent, the scope is also a question of strategy. Often, the content of an investor reporting is coordinated with the investors themselves – in other words, a joint decision is made as to which key data and KPIs should be included and which format makes sense.
If you ask Sebastian Bärhold, it is important to present the business as transparently as possible from the beginning, so not to conceal anything. This means: show all costs well, do not make margins look good, etc. Detailed investor reporting ultimately creates trust and paints a realistic picture – not only for investors but yourself – of how the start-up is currently doing. Only in this way can the reporting become an important basis for further financing discussions and rounds.
By default, an income statement is an integral part of investor reporting. Ideally, the income statement is supplemented by the balance sheet and cashflow. These financial figures are then supplemented by operational KPIs that describe the business, such as transaction figures or new customers. The integration of relevant KPIs as important drivers of the start-up shows investors that you have understood your own business.