I found this good quote today from Fred Wilson:
My first piece of advice is to share the news as soon as you have it. There is never a good reason to have information about your business that your board and major investors would want to know and not share it. You could argue that it’s time consuming to communicate with investors and that it’s more efficient to wait for the regular board meetings to do that. But whatever you gain in efficiency with that approach, you lose in trust and confidence building with an important group of stakeholders in the business. It’s not worth it. There are efficient ways to communicate with the board and major investors. A quick email will normally do the trick.A VC, Apr 2009
I have had very good luck with my investors by communicating good and bad news frequently. The key is to do it consistently, which I try to do every 2 weeks and in a format where you can keep the good and the bad in balance.