Startup investors are more interested in detailed performance report — Wimbart Survey

Share this:

The recent survey from Wimbart highlights how investors and startup founders in Africa are focusing more on regular and detailed reporting in 2024, marking a significant shift from 2023, when only 70.8% of investors received regular updates from startups.

As at this year, 29.4% of investors prioritized sustainability reporting, while 22.2% focused on financial reports. Damilola Teidi-Ayoola from Ventures Platform explained, “With climate tech investors on the rise on the continent, as well as ESG goals becoming more important to LPs, DFIs, and other large-scale funders, this is perhaps not surprising.”

With about 33.3% saying that regular reports help ease their concerns about a startup’s financial health, 25% opines that reporting builds trust and transparency, and another 16.7% viewing it as a way to manage risks early, potentially preventing major problems, reporting has become key to understanding a startup’s stability and growth for many investors.

Demands from limited partners (LPs) for more detailed information (8.3%), stricter regulations (8.3%), and concerns about market volatility and economic uncertainty (8.3%), were some of the reasons cited by investors for their increased focus on reports.

Contrary to what may seem the case, not all reports are meeting investors’ needs. About 27.8% of investors said the reports they received were often vague, and 22.2% admitted they were hesitant to give feedback out of fear of sounding too harsh.

Just over half (52.9%) of investors agreed that they were getting a full picture through the reports they received as regards understanding the overall health of a startup. Teidi-Ayoola noted, “We have found that some founders struggle with reporting due to a lack of streamlined internal systems for collecting key metrics or having standardized templates. Some believe reports should only be shared for major milestones, overlooking the primary objectives of regular updates.”

On the founders’ side, while 93.9% agreed that sharing regular reports with investors was crucial, 39.4% stated their investors’ reporting prerequisites weren’t always clear. Nevertheless, more than 60% of founders affirmed that regular updates helped them get more support from investors. Some founders also agreed that certain important metrics, like customer acquisition costs (CAC), lifetime value (LTV), and fraud prevention, were being neglected.

Overall, regular reporting helps founders track their progress while providing investors with the assurance that their investments are on a profitable path. In the long run, this practice fosters startup growth and strengthens investor confidence, leading to mutual success.