Portfolio Data Collection Tips
Getting regular, high-quality, and actionable data from portfolio companies is important. It allows you to make better investment decisions, support your companies, share insights with internal team members, LPs, and more!
This practice should also be highly valuable for founders. They should be able to share wins and challenges and seek support from you, their stakeholder. It should only take them 3 minutes to complete (if not, either something may be wrong with the portfolio reporting Request or structurally wrong with the company).
Below are some best practices to make sure you get:
- Timely information (e.g. 100% completion)
- Structured data (comparing apples to apples)
- Actionable insights (how we best help our companies)
VC Portfolio Reporting Expectations
✔️ Tip: Set Expectations Early On.
It’s way easier to set reporting expectations with companies early on (and with fewer companies) rather than changing your reporting requirements a few years into your investment in a company.
Some investors choose to outline their reporting expectations in a side letter as a part of the investment documents.
You could also consider including a conversation around ‘reporting’ during your new company onboarding process.
Timing and Cadence
Tip: Same time every period.
Set the expectation that you will be sending a Request for company data the same time every reporting cycle. Visible has data that shows that Mondays are great ‘due dates’ and if you’re sending out quarterly Requests for data, we suggest giving your companies 2-4 weeks after quarter close to get their information back to you.
Don’t randomly switch between the 10th, the 30th, etc. This makes it difficult for founders to prioritize your reporting requirements and gives the impression that your due dates don’t really matter.
Luckily, Visible makes this easy for you. You’ll be to set your recurring Request schedule and we take care of all emails, due dates, and reminders.
We recommend the following cadences. This is 100% customizable as every fund is different.
- Weekly – Accelerators in Cohort
- Monthly – Pre-seed
- Quarterly – Pre-seed, Seed, Series A, Series B +
Portfolio Data Request Content
Tip: Less is more.
Don’t send a Request asking for a slew of ‘nice to have’ metrics. Only get the information you truly need. If you are truly providing value back to the founders, then start small, get a rhythm, and expand the data.
Tip: 5 – 15 Metrics.
Depending on how closely you work with companies, ask for 5-15 metrics and no more. If you’re not taking actionable next steps based on a metric (ex: reporting to LP’s, providing more hands on support) don’t ask for it.
The most common metrics investors ask for include:
- Cash Balance
- Cash Burn
✍️ Tip: Use a metric description!
If you are asking for Burn and don’t provide context, you might get 15 different variations. Should it be negative? Should it be trailing 3 months or the current month? Should it include financing? Be descriptive about what you want.
Tip: How can you help?
Always make sure to incorporate a qualitative response section to see how you can best help the portfolio. Also, let the founder share their wins and challenges (highs & lows) if it makes sense!
Tip: Notify your companies two weeks in advance.
Introducing Your Companies to Visible
As the most founder-friendly solution on the market, we ensure that requesting data is a frictionless process for founders. This means founders don’t need to create an account in order for Investors to still get value out of the platform (ie: No log-in required!). For more info check out How can my portfolio companies use Visible?
Feel free to use our Intro Copy Template to notify your companies about the adoption of Visible two weeks in advance of your first Request deadline.
All of your requests will come from you. However, with Visible you can fully white label the request emails so they come from your email and domain.
All Visible customers get world-class support. We are always happy to offer best practices, upload data, get your feedback, and more. Your account advisor is always your best point of contact but always feel free to reach out to email@example.com