A letter to investors should always be informative, as well as professional. In order to keep investor relations strong, always communicate clearly and honestly about the details of your business. Your correspondence with investors should only include factual information and each investor should be notified of important issues affecting her or his investment as soon as they become known. If attaching investor reports with a letter, elaborate on any areas of concern that a report may display and encourage investors to contact you directly if any should have future questions or concerns.
Whenever you write a letter to investors, make sure it is typed on letterhead with an easy-to-read, professional-looking font. Whether you are preparing a quarterly letter to investors, a yearly letter to investors or writing a letter for an investor proposal, be sure to keep a copy of the letter for your files and send a copy of the same letter to all of your investors, as well as any board members and other appropriate parties. Address the recipients in a respectful and professional tone, and always include your contact information.
All investor communications should be appropriately dated directly on the correspondence in order to keep a factual time line of communication. You should also always contain a reference or subject line after the letter’s date so your investors know what the letter is pertaining to and so the information is easily retrievable if needed in the future. A letter to investors should also always begin with a respectful and professional salutation even if you have a personal relationship with your investors.
When drafting a letter to send to investors, it is always a good idea to get directly to the point as soon as possible. You may have a friendly relationship with the investor, but discussing personal matters is never appropriate when providing a professional letter to investors. Instead, the letter should only contain information pertinent to the investor’s business interest and investment in your project.
In your letter to investors be optimistic about the future of your business together. Even if investors are facing the possibility of losing an investment, detail your best strategies for attempting to avoid such a loss. In short, assure your investors that you are doing your personal and professional best to protect their interests.
When a letter to investors delivers discouraging news, it is also a good practice to inform your investors of situations seemingly beyond your control. At the same time, however, make investors aware of the efforts you have made on their behalf. Most investors understand risks and understand that unforeseen circumstances can result in a loss. What most will not tolerate, however, is being misinformed or intentionally lied to in a letter or in person.
