Startup Performance Reporting in Africa: What Do Investors Want to Know?

For startups in Africa and across the globe, effective investor relations communication is critical to securing funding, maintaining solid relationships with their existing investors, building credibility, and attracting new and long-term investors.

As the continent continues to witness a surge in entrepreneurial activities, fostering transparent and engaging communication with potential investors becomes even more essential. African venture capitalists are recognised for their commitment to ‘going the extra mile’ in supporting their portfolio companies, offering invaluable assistance in partnership introductions, recruiting top-notch consultants, and identifying C-suite candidates, among other support. To execute this role effectively, VCs must develop a deep understanding of their portfolio companies’ current situations. Regular updates through investor communications provide a suitable platform for VCs to proactively extend their networks, provide tailored support, and collaborate closely with startups to drive their growth and success in the dynamic African business landscape.

However, only 71% of investors said they received consistent periodic investment reports from startups in their portfolio, while 29% did not. From the lens of investors, when asked, “How important do you consider Investor Relations Communications?” given a scale of 0 to 10, all investors rated the importance at 8 or above, with an overall average rating of 9.3 out of 10.


Emerging Pain Points

Our analysis of investors’ responses on their biggest frustrations with startups indicates at least six emerging themes that reflect common concerns and challenges they face in their interactions with startups. Clearly, investors are unhappy with several aspects of how startups communicate progress.

Lack of Clarity and Focus: Several investors expressed frustration with updates that needed more clarity and focus. They reported receiving lengthy, convoluted reports that could have communicated the company’s progress or challenges more effectively. One investor said about a report, “It’s more of a sales pitch and not factual information that highlights the challenges”. Some portfolio companies provided too much irrelevant information. Another said that some startup reports contain “Unclear financial and operational information”.

Vague Performance Metrics: Another frustration concerned welldefined and measurable performance metrics. They wanted to see clear indicators of the startup’s success or challenges, including revenue growth with trends and historical timelines, customer acquisition numbers, product milestones, etc. Some portfolio companies presented vague or ambiguous metrics, making it difficult for investors to gauge the startup’s performance objectively. When asked to rate the importance of three categories of performance metrics, on a scale of 0 to 10, with 10 being the most important, “Financial KPIs” emerged as the most important, with an average rating of 9.4.

Absence of Actionable Insights: From investor responses, they often sought updates that presented data and provided actionable insights and recommendations. Some startups submitted information without offering a clear plan of action or seeking input from investors; this indicates that investors wanted updates that encouraged collaboration and enabled them to contribute their expertise to address challenges and drive growth.

Selective Reporting: Several investors expressed dissatisfaction with updates that solely focused on highlighting successes while overlooking significant challenges, bad news and obstacles faced by the startup. One investor called this situation “…Cherry picking KPIs to hype narrative…”. Indeed, our survey revealed that investors appreciated the transparency and wanted portfolio companies to share achievements and struggles candidly. This balanced approach enabled investors to understand better how to support startups effectively.

Inconsistent Reporting Timelines: Investors emphasised the importance of receiving updates regularly, noting that some startups provided updates sporadically, making it challenging for investors to stay up-to-date with the company’s developments. According to the feedback from one investor, “Later-stage companies tend to have the resources and experience to consistently provide coherent, relevant reports. The biggest frustration would likely be a lack of consistency from earlierstage businesses, which sometimes means they are not tracking or doing internal analytics on key information themselves.”

Almost a third of investors surveyed do not receive consistent periodic investment reports from portfolio startups. 65% of those who receive regular reports get them monthly, 29% get quarterly, and only 6% get bimonthly reports. However, all respondents desired monthly report updates from their portfolio startups.


Excerpt of: Startup Performance Reporting in Africa: What Do Investors Want to Know? (Wimbart 2023), page 9, 13, 14


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