I stole the format for this investor update from a HackerNews post on “how to do an investor update.” It worked well. Some of my key takeaways about investor updates are find a regular cadence and don’t avoid it—just ship it. You always think you’re one week away from the update being positive, so just ship it.

Remember that these are the investors. They don’t care about all the inside baseball. They already made a bet on you so you don’t have to resell them. Be straightforward with finance so they can mentally set to what state you’re in. They’ll have a different perspective depending on whether you’re at the start of your burn or the end.

Investors actually don’t want a full product update with all the details of your roadmap. Your investors have 30-40 companies, they’re not going to read it anyway. Just distill your update into the highs and lows.

In terms of setting goals for this stage of company, it was important that we had a mixture of goals that were achievable with hard work (e.g., number of interviews). We didn’t feel like we could meaningfully set a revenue or customer target. The purpose of these user and organizational goals was to focus the team and be clear about what was most prized and what we should be focusing on. For instance, if there’s a user thinking about evaluating us and you’re debating spending your time getting them over the finish line, it’s the right call to do more to focus on them versus focusing on your coding tasks. The intent of these goals was less about hitting specific numbers and was really more about giving guidance on day-to-day prioritization when there’s a lot of different things to do.

It actually felt easy to start this update with an F because we had just raised, so we had a long time to make up for it and I figured we may as well get that out early. It’s probably harder to take this approach if you’re about to raise.

However, my overall impression is trying to pump yourself up just ends in tears. You just make it harder for yourself next quarter. Eventually the music stops.

You need to end with a single call to action. Remember that you need to lead them all the way. A wishy washy call to action won’t get it done. I tried to have an email that they could copy and paste to someone, and it still may not have been focused enough. What they actually needed to know was who to send it to.

A better entrepreneur would probably track the details of all the CTAs and then track the conversion rate and success rate over time. You could see this CTA as another growth motion—you want it to be focused and have something low-lift that’s easy to do.

The other thing to remember with this section is this is the blast email that everyone’s getting together. One-on-one asks are different and you should do them separately. If you really want a particular person to help, ask them directly.

Jeff Dwyer

In an investor update, it’s essential to give a clear CTA to investors asking “how can I be helpful?” and to address missed goals head-on.

I couldn’t be happier to announce that we’ve raised a seed round with [Investor] and [VC Firm]. [Investor] is the perfect investor for us, with a deep focus on developer tooling. He has been an early believer in some of the most iconic companies in the space, such as [other investments] and (soon) Prefab.

The essential round details are [round pricing and structure redacted].

After our first payroll we have X in the bank. Burn is X which puts us at X months of runway. This is 90% salaries and the non-salary expenses will decrease 30% as we get over some 1-time expenses and migrate to better cloud contracts.

We expect burn to remain stable for the next quarter. We’re opportunistically open to another engineer, but being insanely picky. If we can find a world class engineer interested in comp skewed to equity we’ll consider it.

 We ended the quarter with [much smaller number] of users.

We simply didn't start growth exploration this quarter. This was an intentional pivot at the beginning of March when we realized that our logging offering had the potential to be “holy shit” and not just “neat”. That said, delaying growth exploration is the classic mistake and we now need to pay back the debt.

. We ended the quarter slightly under goal. We received very positive feedback in interviews about logging, but without a SignUp page to point them to it felt like more interviews were giving us the same information so we didn’t push here. The Friends-Of-Prefab slack channel was quite effective as an easy way to get feedback on mocks and demos with very low overhead.

 B- We have 2 such orgs, [Customer 1] (Java) & [Customer 2] (Rails) with active branches / running in their staging environments. We'll see what the close rate from this point is, but getting to this point was hugely beneficial and flushed out a ton of getting started issues.

Design: FF UI is being well received: "I really like your overall design. It's simple and friendly, yet professional"

Infra: Full split of Staging from Production allowed us to fix some user facing errors without experimenting on production load balancer.

Team: Onsite/Offsite got the whole group together

Good value from CFO and engineering contractors.

Decision to hire a designer opportunistically is panning out. He’s able to design right in code and ship, accelerating our progress significantly.

Lack of Python / Node clients. Challenging to thread the needle and stay focused here when people are excited but using an unsupported language. We're finding decent amounts of language specific work however and we need to be very thoughtful about expanding beyond ruby/java so as not to slow ourselves down.

Not much team redundancy. Operating loosely coupled gives us speed, but everyone is a critical cog with some siloed knowledge.

Every day we are getting more excited about the opportunity here. Thank you all so much for believing in us. We've just launched an exciting new feature for Prefab and we need your help! 

 with one or two Rails, Java, or Python engineers

 you know who might be interested in providing valuable feedback.

Here’s a template of an email that you can send to the engineer:

I hope this message finds you well. I’m an angel in a developer tool startup called Prefab and I'm reaching out to ask for your honest opinion on their new dynamic logging feature.

They've put together a short video demo and a landing page that explains the feature in more detail.

I understand you're busy, but if you have a moment, I'd appreciate it if you could visit the link below and share your thoughts on the feature. There's a brief questionnaire on the landing page that should take just a few minutes to complete.

Thank you in advance for your time and valuable input!

Thank you in advance for helping out here. We could not be more excited about where we are headed and we are unbelievably appreciative of your help.

Investor Update from Prefab

2023 Q1 Prefab Investor Update

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