👻 I got ghosted by (...) startups??

THE WORST FEELING IN THE WORLD.

You do your due diligence, research the opportunity, and decide to make a bet on a startup.

And then…nothing.

Complete radio silence. It sucks to get ghosted by a startup - today I'll walk you through how often my portfolio of startups provide updates, and what you can do to get an update.

First though - let's dive into some exciting startups that are raising funds right now.

HOT RAISES

Startups that you can invest in with as little as $100 right now:

 🧓 Znest - Zillow for senior housing (LINK)

⚖️ Vikk AI - Personal AI lawyer and legal assistant (LINK)

 🤖 Sorting Robotics - Advanced robotics to automate cannabis manufacturing (LINK)

 👗 Queenly - Specialized marketplace for formalwear, counts A16z as an investor (LINK)

🍃 Wind Harvest - Vertical axis wind turbines that add capacity to existing wind farms (LINK)

Got Ghosted?

In the past 7 years, I've invested in 36 startups.

For a portion of those startups - I've never received an investor update.

Startup investing is risky, so it never feels great to be left in the cold. I know other investors have experienced this as well, so I went through my investments to see if I could provide some numbers on the amount of ghosting.

Of 29 applicable startup investments, I've received updates from 20 of them (69%). I've categorized them into two groups.

First, there are the 13 companies that provide sporadic updates. There isn't a structure to it, they just jot down some updates when they get the time.

Then there are the 7 companies that provide regular updates. These are the gold-star, top tier, 'let-me-give-you-a-big-ole-hug' type of startups. Their cadence differs, but I tend to think quarterly or semi-annual are the best way to go.

Regular updates are much better than the sporadic ones for a couple of key reasons.

1. When startups stick to an investment cadence, you don’t get anxious when you haven’t heard from them in a few months. You know the update will be coming quarterly/annually/etc.

2. When founders get into the habit of providing sporadic updates, I've noticed they tend to share when there is good news. And if there's no good news happening, they don't provide an update at all. This is neither healthy nor transparent.

Sticking to a regular update cadence forces a founder to detail updates for the prior period, regardless if they're positive or not. To me - I prefer the transparency over not having a clue about what's going on.

Let's talk about the 9 startups on the naughty list - the ones that don't provide any updates.

Ghost mode isn't always cause for concern. For example - Substack is one of the investments that has not provided any updates. Yet they're a massive business that clearly exists, generates millions in revenue, and is working towards an exit.

For these larger, public-facing business - it's often not a priority for them to update their community. Many of these startups also understand that any investor updates will likely be leaked online since they'd be transmitted to thousands of people.

While Substack may be fine, the other 9 investments are concerning. It’s not surprising that two of these have gone bankrupt (NowRX/NxNW Brewing).

There’s really no excuse for not providing your investors with updates - these are people that own a percentage of the company - it also doesn’t align with the ethos of crowdfunding, which is to foster a core community around your company.

As small investors, there’s not much that we can do to correct bad founder behavior. The crowdfunding platforms have also shown no interest in mediating issues between startup & investors after the round closes.

So your options are limited, but not zero. Here’s what you can do if a startup has ghosted you.

1. Reach out directly to the founder - X is typically the best platform for this, but you can try Linkedin as well.

2. Find other investors and band together. Here and here are two investor communities where you might find allies - strength in numbers can help elicit a response, especially if you take your requests public on social platforms

3. Use the SEC database to see if there are any recent filings that can indicate revenue/profitability of the company. Companies are required to provide reporting and sometimes you can be surprised to find that the company is doing well even if they’re not providing updates

4. Check the company’s latest fundraise page. Communication tools on crowdfunding platforms are actually quite primitive, so it could be that the founder is posting updates to their old funding page

If you have any tips of your own, reply directly to this email - I’d love to hear them!