| title: | Investor Letters |
|---|---|
| tags: | legibility, investor letters, investor relations |
For most companies, investor relations and communication are an after-thought or box-to-check. The way some founders do it, it's a beautiful art-form all onto itself: clear, plain-spoken prose, minimal corporate-ese double speak, humor, often self-deprecating, lessons-learned, and plans for the future.
I am thinking first-and-foremost of Warren Buffett, but this would also include Jeff Bezos & Amazon. More recently, I've discovered that Patrick and Jon of Stripe and Immad of Mercury also publish lovely letters.
Though YC doesn't publish their own communications to their investors, one could think of PG's blog as something in this vein.
The benefits to taking investor relations and communications seriously are large:
- You attract aligned investors
- You repel un-aligned investors
- You build trust with capital markets as they learn how you think, act, and learn, over long periods of time, giving you a longer-leash to make longer-term investments, higher multiples vs competitors, more grace when you have missteps, and more tolerance for unconventional moves
- You build trust with labor markets, as employees (who are always implicit underwriters of a business, and often are outright shareholders) learn that you are trustworthy stewards of their careers, livelihoods, and reputations
- You build trust with customers, who can see more behind the curtain how you are laboring on their behalf, to delight and serve them, not to trick and exploit them
- You can educate society at large about why your company exists, what purpose it serves, how you are a good community member, and why they might want to root for you to succeed.
- Spending time on investor communications makes oneself and ones company more legible to itself internally, leading to better internal decision making and alignment.
From an efficiency perspective, publishing publicly beautiful and thoughtful investor and community letters is a worthwhile use of time simply, because you should do this reflective thinking anyways, even if just for your own clarity of thought, but if you're spending the time doing it, you may as well publish publicly to get as much credit for it as possible, increasing your legibilty to all parties, so they can fit you into their stories where appropriate, increasing your "luck surface area."