In a seed stage investment, information rights are the balance point between two legitimate needs. The investor needs visibility to protect their investment and provide informed guidance. The founding team needs focus and speed to execute. Promising “large company” reporting when you’re still building product, market, and processes ends up generating friction, unintentional breaches, and, in the worst case, loss of trust. That’s why it’s advisable to agree on a simple, repeatable, and realistic information system from the start.
What’s reasonable to promise at seed stage depends on the complexity of the business, but there’s a sound standard: a brief monthly report, a more complete quarterly one, and annual accounts when applicable. Additionally, there should be a clear rule: reporting must not prevent operations. If your team is small, the goal is for reporting to be prepared in a few hours and with data that already exists in your operations.
The monthly report is usually a page or two with the essentials: available cash and cash runway (how many months the company can sustain at the current burn rate), monthly and cumulative revenue, main collections and relevant payments, cost evolution and hiring, and 3 to 5 key business indicators.
The quarterly report allows for added context: quarterly results, comparison with budget, explanation of deviations and decisions made. It’s also the natural place to review milestones: product, market, team, and risks. At seed stage, this quarterly report works better if it includes “what we learned” and “what changes” in the plan, because that’s where the investor can add value without interfering in daily operations.
Annual accounts and, if applicable, taxes, are delivered as soon as they’re available. Here what’s reasonable is to set deadlines that respect the reality of a small company and not generate impossible obligations. It’s also advisable to agree on what happens if there are delays for justified reasons: notify, provide a date, and deliver, without dramatizing.
Finally, define the channel and format: monthly email on a fixed date, quarterly meeting of 45 to 60 minutes, and the right to ask reasonable questions with an agreed response time. This way you fulfill the information objective without turning the relationship into a constant exchange that wears down the team. At seed stage, trust is built more through consistency and clarity than through quantity of documents.
Having personalized support, such as that offered by the Economic Office of Galicia, can be key to successful implementation. Request free specialized advice and take advantage of the available resources to boost your business.
