How to Write an Investor Update Email

I have several dozen portfolio companies. Most of them send me monthly or quarterly updates. There are three items in the updates that I personally find more useful than anything else. They are:

  1. Cash flow / P&L top line summary
  2. Major changes / developments
  3. Problems the CEO is struggling with and wants help on

A hypothetical example is below. I wish all my update emails were like it. Call it the minimum viable update email.


Hi Investors,

Last month we burned through $45k. We are on track to turn cash flow positive before year end. We will decide in about three months whether we need a little bit of extra cash for working capital purposes or not.

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There were no key changes last month. We have got two good candidates for CMO and will decide this month.

Key problems:

  1. We have some problems in our tech team. Our CTO isn’t experienced enough to manage through this. Can you recommend a mentor / experienced CTO to come in and help (this can be a paid coaching position)?
  2. I have been approached by a VC who wants to potentially pre-empt a Series A. How do I best deal with this?
  3. We have lost two important pitches against a competitor in December. Can any of you spare some time to talk through our positioning statements and sales process?
  4. I am worried that key competitor X has just closed a $8m Series A round (see here for more info), how shall we best deal with this (if at all)?

Many thanks,

How to Use the List of Investors in Europe

We recently published a list of Investors in Europe. I have now been approached by dozens of founders who want guidance on how to best approach these investors.

The best way to think about figuring out which VCs to approach is counterintuitive. Most founders try to pick the right VCs off the list. Given their lack of knowledge about each firm, they typically end up picking all the wrong investors (e.g. they are looking to raise a seed round and are picking famous US firms that are looking for Series A and B deals in Europe).

The right way to use the list is not to pick the right VCs. The right way is to exclude the wrong ones. This is how you do it:

  1. Make a copy of the list
  2. Remove all investors who are not investing at your stage (e.g. you are raising a seed round and they only do Series A and Series B rounds)
  3. Remove all investors who are only investing in specific geographies you are not in (e.g. they invest in Scandinavian companies and you are a US founder living in Germany)
  4. Remove all investors who are only investing in specific industries you are not in (e.g. you are an e-commerce company and they only invest in cleantech)

That is it. You should end up with a list of ca. 50–100 investors or so. That is your target list. You didn’t pick any of these firms. You just removed the ones that are not relevant to you.

Next, you need to figure out whom you know who can introduce you to these VCs. Use LinkedIn. Use Conspire. Make sure you are connected to all of your current investors, mentors and advisors. Also, ask all of them which firm they can intro you to and then show them the target list and ask them whom they know.

Craft a forwardable email. Send the person who should intro you to the VC that email. They will reach out on your behalf and, if successful, will intro you to the partner.

And that is how you use the list effectively. Good luck with the fund raising.

PS: I wrote a manual on how to best raise VC funding almost ten years ago. This is as valid today as it was back then. It explains all the steps in much detail.

The 20 Percent Law: What Founders and Investors Don’t Know

Every time, when I see a pre-launch company that raises a seed round, hires a team and then works six months towards the product launch, it breaks my heart. Typically it doesn’t work out. Then they spend three months to try and fix it, and it still doesn’t work. Then they have three months of runway left and then they reach out to me and ask me to fix their company.

But I can’t. And the reason is the 20% law:

“Whenever you launch a new product, you have a 20% chance of it working out.”


I learned this lesson the hard way at Forward Labs. We used to bring in founders and we would surround them with a team of experienced developers, marketers, designers, etc. Even when you have a team of proven people who are all very, very good at what they do and have done it for many years, your chances of success when you launch a new product is low.


That is the percentage of products that worked when we launched.


Founders, startups and their investors are ruled by the 20% law and they don’t know it.

So here is a solution that we tried and that worked out for us.

Launch, see whether it works, then change drastically very quickly when it doesn’t. And with drastically I mean no A/B testing. When you need a 10x change, no little tweaking will ever get you there.

So — be bold and make drastic changes.

Do the math. When you relaunch your product or pivot your product ten times, you have a combined 90% chance of it working out.

How many rockets did SpaceX blow up to achieve a successful landing? Yes, quite a few…

So would you invest 75% of your cash in the first rocket with a 20% chance of success? Probably not, but many founders still do it with their companies.

It is thus no surprise that most of them blow up. But it still breaks my heart.

€15BN and counting: A beautiful map, a list of 300+ investors and more

We have been busy at work here at the Techstars Accelerator in Berlin. Over the last few weeks, we took at a look at some of the resources we’ve made available to the founders in our Berlin class. And then we thought it was silly to we keep these resources to ourselves. So we have decided to start opening these resources to everyone, starting today.

The first thing we are releasing is a list of 300+ investors who routinely invest in Seed, Series A or Series B rounds in European startups (we have included countries bordering the Mediterranean, such as Turkey and Israel). This list currently totals some €15BN in funds that are available for investment in European startups right now. This list has the most up to date investor information as we contacted each firm to get the right facts and figures.

You can gain access to the full list with lots of information on each investor here.

We also made a little map illustrating roughly how these investors distribute across Europe. Hotspots are easily visible. You can find a high resolution version of map is in the Techstars Berlin Resources space.


Techstars Investors in Europe v1

The list is already proving popular with founders, despite us having shared it with a very small group of people only. Everybody can contribute to it via comments or by emailing us.

So far, €15BN and counting…lots more to come.



Are you a founder? Want to talk to the Techstars Berlin team? Apply for office hours here. We try to talk to as many founders as we can.

You can pre-apply for Techstars Berlin here.

The list actually has a longer story behind it, you can read more about that here.

Effective Market Segmentation

The slide I see in many pitch decks is one where the CEO explains the market, how she understands its segmentation and whom the company is selling to. It is frequently some sort of grid where on one axis you find geography and on the other industries or maybe company size.

I would like you to consider two scenarios.

In the first scenario, the CEO proceeds to fill in the grid with full and partial check marks or similar to demonstrate the broad applicability of the product and how significant the opportunity is and how many customers they have in each segment (typically very few in each). She then explains how she plans to roll out the product to all these customers.

In the second scenario, the CEO explains that she has considered and tested various segments, but for now she is focusing just on a single segment. She then says that she thinks the next segment maybe a segment adjacent to the one she is tackling now, but that she isn’t quite sure about it.

All things being equal, which CEO would you rather invest in?

When I hear the first scenario, I tend to lose interest. The second scenario excites me. Here is why.

When you pick just one segment, you:

  • Only need to build and maintain features for that segment;
  • Can iterate product development faster;
  • Only need to market and sell to one segment;
  • Can leverage existing customers and their references to sell to very similar customers;
  • And, maybe most importantly, you can reach the tipping point in that segment much more quickly.

That last point in particular deserves some special attention.

In a typical adoption curve, you have about 15% of customers who are early adopters. Once you cross 15%, the segment tips in your favour and you can close 50%+ relatively quickly. When you try to sell to a market with 100k customers in it (for example), then it will take 15k customers before you reach the tipping point.

Consider the alternative of picking a tiny market segment with only 50 customers in it. You only need to close 8, and the segment tips in your favour.

What this means is that the best market segmentation strategy is to initially experiment with different segments, pick the one that seems to work best and to laser focus on it. Nail it, then pick the next adjacent segment, rinse and repeat.

You will probably find that your company grows faster by focusing on a very small market segment initially, and not on a large one.

Sign up for Office Hours
If you would like to sign up for office hours with me to discuss your startup, you can do this here.

How to Structure Your Commercial Team

Many first time founders struggle with organizing the areas of responsibility in their company. Here is a simple overview that many founders I have talked to found useful.


The area most founders struggle with is commercial. At its most simplistic level, there are three tasks a company must achieve in order to be in business:

  1. Marketing: Qualified leads
    A qualified lead is an individual who has expressed interest in buying the product and has the budget and authority to make a purchase decision. Marketing’s primary role is to produce and deliver qualified leads.
  2. Sales: Closing deals 
    Sales is converting qualified leads into closed deals. This function can be operated by a sales person; it can be operated by the product itself. Somebody or something has to convert leads into customers.
  3. Customer success: Keeping customers happy & upselling them
    Selling to customers is great, but you need to actually deliver what you promised. Customers should purchase again and preferably purchase more in the future. This function is frequently referred to as customer success.

Marketing, sales, and customer success are the three key building blocks of a commercial business function.

Now, here is the trick. Each of these three areas should be owned by one individual. At the same time, any individual should own only one area of responsibility, not two or three. For example, ideally you have one person responsible for marketing, another for sales and another for customer success. Each of those three should report to the CEO. Each may have their own team reporting to them.

This makes hiring for these functions easier. It makes formulating targets easy. It makes incentivizing easy. It makes management easy. It leads to focus on achieving goals. It removes excuses.

As soon as you mix those responsibilities, performance drops. Individuals who are good at marketing are not good at sales. Salespeople are not good at customer success and so forth.

I always suggest to founders to focus on:

  • Number of qualified leads produced per day / week (and the cost per qualified lead)
  • Percentage of leads closed by sales (and the time to close)
  • Churn of existing customers (and overall customer satisfaction)

This is the most basic structure of a commercial team. I find it serves as a good starting point.

Sign up for Office Hours
If you would like to sign up for office hours with me to discuss your startup, you can do this here.

When Investors Go Dark

By far the most annoying aspect of fund raising is when investors ‘go slow’ or ‘go dark’ on a company. Meaning the investor doesn’t say yes and they don’t say no. Instead, they respond very slowly to the emails or calls of the founders.

Below is advice I give to founders. The key is understanding the different investor mindsets. You can then act accordingly.

No (Qualified Out)

The investor passes right away or they take a look and then pass firmly.

This is actually great behavior; it saves founders a lot of time.

The only way I have seen that can change that investor’s mind is when another investor/board member gets in touch and says: “You should look again at this company; I think you have read the situation incorrectly.”

Unless you can do this, it is exceptionally difficult to convince investors to take a second look. Instead, accept it gracefully and don’t annoy them.

Upfront significant information request

Sometimes a junior/inexperienced investor requests a lot of specific information upfront. This happens before it is clear whether there is real partner level interest in the company.

This can take up a lot of the founders’ time and should be politely refused. The investor should first establish whether there is real interest.

Going slow or going dark

When the investor is slow to respond, the term ‘Going dark’ is often used. They say, “We are very busy with internal processes and are doing due diligence.” There are three dozen variants of this.

What they actually think is a variant of the following: “I can’t make up my mind about this company. It is not so compelling I feel I need to make an offer. Yet it also isn’t so disinteresting I feel I need to reject them.”

It is highly unlikely that this investor will lead your round. What you can do is to try to either convert them to a ‘soft-circle’ or to qualify them out.

You can go back and say: “It doesn’t feel as if you are interested in leading the round, tell you what, I will keep you in the loop and once I have a lead and there is space left, I will get back to you, how does that sound?” If they say yes, try to crystallize the conditions under which they would say yes to a deal. Get that in writing if you can.

Conditional Yes / The ‘Soft-Circle’

The investor is interested and happy to commit, but their check or interest level won’t crystallize the round. That is fine. Soft-circle them. Try to get them to a ‘conditional yes’. A conditional yes is not a term sheet, but a statement where the investor says under which conditions they would be happy to invest.

There is a scenario where you will have multiple soft-circled investors. You can then issue a term sheet yourself and have one investor do the legal work.


Every time when I have been involved with a fund raising and a firm received a firm yes, this happened relatively quickly. There was speedy and continuous communication. Ideally, you have multiple investors say yes at the same time so you can compare them and then work with the firm(s) of your choice.

Those are the five most typical initial outcomes of an investor discussion. The key for all involved is to get out of time wasting and slow discussions ASAP. Push to either No, Conditional Yes or Yes. And then you can construct your round accordingly.

Sign up for Office Hours
If you would like to sign up for office hours with me to discuss your startup, you can do this here.

This post was originally published on Jens’ blog, Founders View.

Introducing the Inaugural 2015 Berlin Class

We are thrilled to announce the 2015 Techstars class in Berlin.  Our session begins June 15th, and will wrap up with a demo day on September 10th.

This is the inaugural class in Berlin. Eighty-five per cent of our applications were from Europe and the class reflects this, with the companies hailing from Germany (3), Austria (1), UK (2), Ukraine (1), Israel (2) and Peru (1).

Of the ten companies, six have a B2B focus, typically with a software or infrastructure-as-a-service business model, and four companies operate marketplaces where consumer can book services.

And now, the Techstars Berlin Summer 2015 class:

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Preply is a fast growing European marketplace for tutoring. With over 10,000 tutors and 18% month­on­month revenue growth, the team is now scaling their product to new markets.

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Akdemia is a school management and communication tool. With over 14.000 students already on board, our vision is to redefine school operations worldwide, starting with developing markets.

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Sidestage is building the global platform for booking musicians.

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AppInside is a mobile app security company from Israel. Appinside scans for vulnerabilities that can lead to malicious abuse, cloned apps and security threats. During the program AppInside has raised seed funding of $2.3M from Accomplice (FKA Atlas Venture) who invests in tech entrepreneurs and creates companies at the earliest stages.

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DATAPATH.IO provides network performance management solutions to DevOps. We have created a novel and lightning fast service to deliver data from clouds to users, so apps run smoothly. We provide a selection of the fattest pipes of the internet, a flexible API and the ability to monitor and optimize end user performance.

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treev is shared space for teamwork. Without worrying about permissions, people can organise, share and search files, documents and links from multiple sources (e.g. Dropbox, Salesforce, Gmail and Trello). This helps teams to find stuff quickly, onboard new people easily and document knowledge without extra work.

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Jibjib is a fast and cheap way to send money into and out of Iran.

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Eversport is a sports booking platform with over 160 venues and 15.000 users. Our special sauce is the Eversport API which can integrate our booking solution with any venue regardless of legacy admin system.

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Avemus makes enterprise management software for agricultural cooperatives in emerging markets. There are more than 1.2 million cooperatives that generate in excess of $594 billion. We enable them to optimize their operations by means of tools for information sharing, notifications, reporting and more.

Screen Shot 2015-09-23 at 3.11.56 PM Stagelink, the fan­-powered tour promoter, crowdsources live events for Internet stars, leveraging millions of online followers to create successful shows and tours for 21st century artists.

Announcing Techstars Berlin

Today Techstars is announcing a new program in Berlin that will kick off in Summer 2015 and I’m excited to officially come on board as the Managing Director.

Applications open today, with a program start date in June and Demo Day in September. The program will run like other Techstars city programs in Austin, Boston, Boulder, Chicago, Cloud (San Antonio), London, New York City, and Seattle.

My full profile can be found here but I have been mentoring at Techstars (and its London precursor program Springboard) for many years. When I told Techstars I wouldn’t be able to mentor going forward as I was moving to Germany, I was asked whether I would be interested in opening up a Berlin program. I then spent the next six months working with Techstars in London and at the same time met 50-100 Berlin based entrepreneurs and investors. What I found really excited me:

  • Over the last ten years or so, many new tech startups have sprung up in Berlin. Rocket Internet, Zalando, and Delivery Hero, each valued at $1BN+ are headquartered in Berlin. According to an analysis by Ciaran O’Leary of Earlybird, there are now a similar number of $10m+ financing rounds in Berlin as there are in London. And the year-on-year growth rate of such financings is higher in Berlin than London. There is a lot of activity here and I expect much more in the future.
  • Berlin is a city with almost no ‘old’ money. Almost all of the angel investors that are actively investing in Berlin are former Internet entrepreneurs. They have been there and done it. It makes a huge difference when compared to investors in other (German) cities. And there are a lot of them. I think there is more high quality seed capital in Berlin than there are investment opportunities of the same quality. Perfect for entrepreneurs.
  • Berlin is a fantastic place to live and work. The cost of living here is a fraction of what it is in London or New York. The quality of all public services is high. Crime is low. Berlin is a global city with an overwhelming offering of cultural activities. And best of all, everybody speaks English. You can easily live here without ever having to use a word of German.

All of the above makes it easy to attract high quality talent into Berlin and keep it here. All of this at a fraction of the cost of US/UK startup centres. And as Matt Cohler of Benchmark rightly pointed out, startups take centre stage in Berlin.

When I asked the local entrepreneurs and investors whether running a Techstars program in Berlin made sense, two things were pointed out over and over again. First, Techstars has a very strong reputation so we should be able to attract highly quality mentors and companies that will make for a successful program. Second, Techstars has a very strong network of over 3000 people in the US and UK. This is a unique asset that could add significant value to the startups going through the program.

We’ve already built a community of investors and mentors to support the Berlin program and we’re growing the network every day. Here are some sample investor mentors, with many more to be announced in the coming weeks (VC and angel investors, local entrepreneurs, and other key players in the Berlin tech community):

Brad Feld – Managing Director, Foundry Group

Pawel Chudzinski – Managing Partner, Point Nine Capital

Christian Buchenau, Partner, Paua Ventures

Suranag Chandratillake & Rob Moffat – Balderton Capital

Simon Schminke – Earlybird Ventures

David Cohen – Founder & Managing Partner, Techstars

Fabian Heilemann & Lydia Benkö – Partners, Heilemann Ventures

Philipp Hartmann & Tobias Johann – Managing Partners, Rheingau Founders

Benjamin Rohe & Ludwig Preller – Partners, MAS Angel Fund

Christoph Gerlinger – Founder & CEO, German Startups Group

If you are a startup founder and want to apply for the program, please fill in the application form here.

If you want to reach out to me to discuss Techstars Berlin, please email me at

PS: We are looking for a Program Manager to help me run Techstars Berlin. Details of the job can be found here.