SaaStr Founder Jason Lemkin: '0 Success' for Startups Halting Investor Updates During Downturns

Jason Lemkin, the influential founder of SaaStr and a prominent venture capitalist, recently highlighted the indispensable role of consistent and transparent communication between startup founders and their investors, particularly when navigating challenging market conditions. His insights arrive as many emerging companies confront extended timelines to achieve significant revenue.

Lemkin acknowledged that even highly successful technology firms, such as Figma and Stripe, required several years to reach material revenue milestones. He noted that this prolonged development phase is a common trajectory in the startup ecosystem and can ultimately yield substantial success. This journey often involves periods of slow growth or setbacks, making effective stakeholder management paramount.

A central tenet of his guidance emphasizes the uninterrupted flow of investor updates, irrespective of a company's immediate performance. Lemkin observed a common, yet detrimental, pattern: "When things are great, those updates go on on the last day of the month. When things are harder, updates slow down. They come out weeks after the month or months after the quarter ends. They often even … stop sending them." He starkly stated, "So far, I’ve seen 0 success from founders that stop [sending investor updates]."

He stressed that consistent communication transcends mere formality, serving as a strategic imperative to build and maintain trust. Founders must proactively articulate their progress, challenges, and vision to "tell them why to keep believing, for real," encompassing their team, partners, and investors. This transparent approach is crucial for fostering continued support and and belief through "rougher patches," preventing speculation and maintaining confidence.

From an investor's perspective, this transparency is vital, especially in a venture capital landscape characterized by heightened scrutiny and a demanding bar for securing funding. Lemkin, as an active investor, understands that regular updates, even with less-than-ideal news, help manage expectations and reinforce a founder's commitment. This builds long-term relationships and positions the startup more favorably for future funding rounds or strategic partnerships.

Lemkin, widely recognized for his extensive experience in the SaaS industry and venture capital, frequently offers practical advice on scaling businesses and effective fundraising through SaaStr. His counsel consistently underscores the necessity of resilience and strategic transparency. Continuous engagement with stakeholders, as advocated by Lemkin, is presented as a cornerstone for long-term startup viability and success, ensuring that belief in the mission persists despite temporary hurdles.