Forty per cent of startup founders feel investors do not understand their business and market, creating a disconnect in communication, while almost three-quarters of investors have increased their reporting requirements over the past 18 months.
That is according to Wimbart, an award-winning PR agency specialising in business and technology sectors across Africa, which has released its second annual report – “Startup Performance Reporting in Africa: Aligning Startup and Investor Expectations.
The report, which aims to gain a comprehensive understanding of investor-startup reporting dynamics, has revealed that while reporting frequency has improved, 40 per cent of startup founders still feel that investors don’t fully understand their business or market. This disconnect creates ongoing challenges for investor confidence and highlights a gap between what founders report and what investors find valuable.
It also revealed that the majority of investors – 72% – have had to intensify portfolio reporting requirements over the last 18 months, placing a stronger emphasis on sustainability metrics as their primary KPI. With nearly two-thirds of investors using past reporting to guide future investment decisions, maintaining consistent and detailed communication is more imperative than ever for founders to secure support in this current funding environment.
“This year’s report takes a step forward by incorporating the voices of startup founders, opening up the dialogue. One thing is clear from our 2024 survey: continuous due diligence in Africa’s tech ecosystem is intensifying, with investors prioritising long-term sustainability and solid financial performance over quick returns,” said Jessica Hope, founder and CEO at Wimbart.
“The reality is that in today’s tough fundraising environment, startup founders cannot afford to overlook clear and consistent reporting – it’s not just beneficial but essential. By keeping the lines of communication open and transparent, startups can build and maintain the trust and support they need from their investors. Without this, access to funding and all-important network support may become increasingly hard to access.”
Supported by key partners, including Ventures Platform, TLP Advisory, TechCabal, AfriLabs, and London African Network, Wimbart’s report reveals a critical communication gap. While most investors – 83 per cent – believe they have clearly communicated their reporting requirements, only two-thirds of founders feel the expectations are understood.
To address these gaps, the report outlines key recommendations to improve investor-startup relationships, including:
- Investors to communicate reporting requirements, cadence and expectations to founders; provide templates to help founders meet reporting expectations.
- Startups to avoid vanity metrics and focus on meaningful metrics such as customer acquisition cost [CAC], lifetime value [LTV], and customer retention rate to demonstrate a deeper understanding of the business.
- Both parties must maintain an open line of communication to give nuance to the data and build the trust needed to build businesses together.
The full report can be downloaded for free here. To access the inaugural Investor Comms Report: “Startup Performance Reporting in Africa 2023”, click here.
