A question we often hear from investors is “What response rate should I expect from my portfolio companies when I’m using Visible?” Investors are asking this question for a good reason; higher response rates mean more accurate metrics, less time spent chasing companies, and more meaningful portfolio insights to inform decision-making.
The answer to this question is as nuanced as the founder <> investor relationship itself. While Visible increases the efficiency of the data collection process and provides investors with a source of truth for portfolio information, Visible will not dramatically (or magically) increase structured data response rates overnight. Response rates from companies are most directly affected by variables that are within, and sometimes outside of, investors' control.
Factors Outside of an Investor's Control That Affect Response Rates
The Stage at Which You Invest
Our data shows that the stage at which you invest can affect response rates. Early-stage companies, which we defined as pre-seed and seed-stage companies, are most likely to respond to structured requests from their investors.
There are many plausible explanations for this finding. Startups at this stage have fewer investors on their cap table and therefore are not reporting to an exhaustive list of stakeholders. They’re also still establishing themselves in the fundraising space and likely understand that positive relationships with current investors can lead to follow-on funding and investor introductions.
Visible still functions as a source of truth for investors who focus primarily on later-stage investments. It is more common in this context for companies use the Request feature to share a minimal amount of structured metrics (2-3) and upload files that contain their latest financial and qualitative updates. These files are automatically saved to a company’s profile, and investors can enter these metrics directly into the relevant company's metrics table.
Investors who receive company email updates can forward these emails to Visible AI Inbox to automatically map and save them to a company’s profile.
Learn more about mapping email updates to companies' profiles on Visible with AI Inbox below:
Whether You are a Lead Investor or Not
Lead investors typically have a meaningful ownership stake in a company and are likely to have a board seat and information rights. These factors contribute to higher response rates from portfolio companies as opposed to investors with small ownership stakes and no information rights for a company.
Number of Companies in Your Portfolio
The number of companies in your portfolio may also affect your response rates. Our data shows that funds with a portfolio size between 50-100 companies results in the best response rates. This is likely because you have reached a stage in your firm's development where you have meaningful brand recognition which elicits compliance from your portfolio companies. We see the response rates for portfolio sizes of over 100 slightly decrease. A possible explanation for this is as more time passes between your initial investment in a company, the motivation for a company to report to your firm may decline if strong relationships are not maintained. Additionally, firms with many portfolio companies may indicate a high volume/low ownership approach to investing.
The good news is there are numerous factors within investors' control that can be enhanced with Visible to help increase response rates from companies.
How to Increase Response Rates
While some factors that impact response rates are outside of your control, there are a few best practices that can lead to increased response rates. Check out a few examples below:
Set Expectations With Founders
Before investing in a company, you can start to set report expectations. Including reporting expectations a side letter to founders is a great first step.
We also recommend re-iterating reporting expectations when onboarding new portfolio companies. Outline the specific metrics and reporting deadlines during onboarding. Check out our guide to onboarding new portfolio companies for inspiration.
Establish Trust and Rapport With Companies
Don’t let the reporting process be the only time you communicate with your portfolio companies. Offer regular check-ins and support for portfolio companies to build trust and encourage regular responses.
Ensure You Have the Right Point of Contact
Confirm you have the correct point of contact during the onboarding process and on an ongoing basis. As a company matures, the point of contact can change.
With Visible Requests, you can send requests to multiple points of contact.
Set Appropriate Reminder Emails
Customize reminder messages before and after a Visible Request is due to encourage a higher response rate. Requests with four or more scheduled reminder emails have the best response rates. We also recommend giving a company one week's notice before sending out a request for the first time.
Only Ask for Top-of-Mind Metrics
Reduce the reporting burden on your companies and aim to only ask for 5-10 essential metrics. Assign custom metrics to different companies to ensure Requests are as tailored and concise as possible.
Ask for Data Quarterly
70% of investors send Requests quarterly and this frequency is shown to result in the best response rates. You can ask for monthly granularity in quarterly and semi-annual requests.
Verify Your Firm's Domain on Visible
Verifying your domain means data Requests come directly from your email domain making it easier for your companies to identify and trust.
Let Companies Report in Their Currency
Allowing companies to report in their own reporting currency reduces the reporting burden on founders. Visible converts portfolio data back into your fund’s currency for streamlined reporting and analysis.
Include Clear Metric Definitions
Clear metric definitions reduce the back-and-forth between you and your companies and ensure data accuracy. Visible lets investors customize metric titles and definitions.
How to Get Data Into Visible
Visible provides investors and their portfolio companies with various ways of aggregating data into one source of truth.
Visible Requests
Requests are the primary way investors collect structured data, qualitative updates, and files from portfolio companies. Requests sent through Visible do not require companies to create an account with Visible and take companies 3-5 minutes to complete.
Visible Requests also automate the process of sending reminder emails to companies who haven’t responded to a data request. These automatic reminder emails save investors approximately 63 hours per year.
Data Import
Investors can choose to easily enter and update data directly on the Visible platform. The modern UI allows for easy navigation and the audit log provides users with a record of who made changes to the platform and when.
Google Sheet Integration
Investors can choose to integrate with a Google sheet to keep their companies’ metric data up to date in Visible. Learn more about Visible’s Google Sheets integration.
Visible AI Inbox
Automatically transform email updates that founders send you into structured data that can be charted, analyzed, and shared in Visible with AI Inbox. Learn more here.
Centralize Your Data With Visible
Ready to build one place for your firm's data? Learn more about leveraging Visible to centralize key performance data for your firm by scheduling a call with our team.
