The Next Round - Optimizing Your Next Financing with Investor Reporting

Private & Confidential - All rights reserved - Visible.vc, Inc.

The Next RoundOptimizing Your Next Financing with Investor Reporting


Business has only two kinds of key resources — knowledge resources and money.Peter Drucker - Managing for Results

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https://visible.vc/blog/what-talent-wants/


How effective is your company at attracting and retaining capital and talent?


Investors want to work with founders who…

… take seriously the fact that you are deploying the capital of other people.Marc Andreessen - Interview with Fortune’s Dan Primack

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Investors want to work with founders who…

… grasp the importance of management, money, market and above all else momentum.Mark Suster - The 4 Main Things Investors Look For

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http://www.bothsidesofthetable.com/2010/10/06/the-four-main-things-that-investors-look-for-in-a-startup/


Why Effective Investor Relations Matter


Public vs. Private Market Investor Relations

For public companies, frequent financial disclosures and the reporting of certain well-defined metrics are a requirement.


Public vs. Private Market Investor Relations

In the private market, this isn’t the case — reporting and metrics standards and consistency are lacking, leading to misunderstandings — and occasionally fraud — in fundraising, hiring, and operating.


How much time until we need to hit the fundraising trail? How much time until the bank account hits zero? How long until we can reach profitability? When will the funding market dry up?

You are fighting a race against the clock.


And against an unwilling market.

Bitcoin and blockchain companies have another, possibly even greater, existential question that they need to try to answer when raising money and planning their futures. When will bitcoin and blockchain “arrive”?


If you aren’t getting attention from a VC, you aren’t going to get money from that VC either. When a VC writes off an investment, either emotionally or literally on their schedule of investments, they are closing their wallet to it too.

Fred Wilson, Orphaned Investments

“Even against companies in the same portfolios…


Consistent and comparable investor updates truly help companies stand out in a market where investor attention is scarce.


In a survey of dozens of top Seed and Series A stage investors, respondents indicated that, based on historical portfolio data, companies who consistently provided business updates to investors were 2x more successful in attaining follow-on funding.

The numbers support this.


Joining the 2x Club


Regular investor updates signal an active and engaged management team.


Over time, signals turn into patterns and investors — for better or worse — rely on pattern matching to streamline decision-making.


Transparency through consistent communication creates accountability and a deeper sense of ownership.


Investors are an extension of your team. Keeping them engaged leads to intros to talent, customers, and other investors.


Building a process for the long term

1. Once a month — plus intermittent updates for major milestones — is great

2. Stop asynchronicity — take a “one to many” approach 3. Use comparable metrics — cash on hand, net burn, runway, your Most Valuable Metric

4. Combine numbers with context. A short narrative on what has changed works well

5. Make specific asks


Your Most Valuable Metric


Good metrics should be actionable and drive successful behavior.David Skok, Matrix Partners

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Trying to track — and disseminate — every single data point within your company creates noise with nothing to act on. Read any startup post-mortem and you’ll quickly realize the negative impact that lack of focus can have on a company.

What does success look like?


What does success look like at Visible?

Number of Updates Sent

•Shows we have activated a user and that they “get” it

•Means we are finding additional use cases (beyond monthly updates)

•Indicates a good match between our messaging, our product, and user expectations


Early Stage Most Valuable MetricsBuffer

Product Page Visits

Our core metric that we use to tell if we’re doing a good job is how many

people are actually clicking through and

visiting product pages. That’s how we know

people are continuing to find value in what we’re doing and everything

follows after that.

•Raised $7.5MM from firms like a16z, SV Angel and Google Ventures

•Collaborative, community-based business model

•Based in San Francisco

Buffer Monthly Recurring Revenue

Understanding MRR helps Buffer accurately

describe the type of revenue they are

receiving, factoring in annual payments,

monthly subscriptions and refunds and fees.

•Raised $3.9MM from investors like Collaborative Fund and Vegas Tech Fund

•SaaS business model •Remote team based

around the world

http://producthunt.com?ref=visiblevc


Early Stage Most Valuable MetricsBuffer

WAU Growth

As a seed stage company, week over

week growth is important for Charlie as

it helps them understand how effectively different distribution channels -

referrals, press, organic - are performing.

• Investors include Hyde Park Ventures, Confluence Capital, and Lightbank

•SaaS business model •Tool to compile dynamic

one-pagers

Buffer Number of Live Offers

Kickfurther focuses on how many “live offers”

they have on the platform at a given time.

Their effectiveness at having offers live directly affects every single other

KPI they track - like revenue, user

acquisition, and user activation.

•Member of Boomtown Accelerator in Boulder

•Marketplace business model

• Inventory financing crowdfunding for small businesses


Growth Stage Most Valuable MetricsBuffer

Net Promoter Score

NPS is a crucial metric for Ecommerce

businesses who rely heavily on return

customers and word of mouth referrals. Warby Parker sees NPS as the best leading indicator for the health of their

brand and by extension, their business.

•Raised over $100MM from firms like First Round and BoxGroup and valued at $1.2B

•Ecommerce business + brick and mortar business model

Buffer Growth in # of companies to 2k

messages

For Slack, the magic number for user retention is 2,000 messages. Once

a company hits that number, they are

extremely likely to stick around as a customer (93% of teams that hit that number still use

Slack today).

•Valued at almost $3B after raising money from firms like The Social + Capital Partnership and Accel Partners

•Self-service SaaS business model


Growth Stage Most Valuable MetricsBuffer

Sharing

Buzzfeed believes that shared content is good

content and that editorial success in

today’s media landscape is all about word of

mouth (sharing). Sharing as a metric is a digital

proxy for the previously mentioned Net Promoter Score.

•Raised over $300MM from firms like NEA and Lerer Hippeau Ventures

•Media business model

Buffer Number of Nights Rented

Liquidity is key to the success of a

marketplace. For Airbnb, the number or nights

rented and the growth of that number

demonstrates how well they are attracting new

marketplace participants and then matching them with people on the other

side.

• Went through YCombinator and now valued at over $25B on a reported $900MM in revenue

• Marketplace business model


What’s your Most Valuable Metric?


Sarah is the CEO of a SaaS Company She needs to share updates and key performance data with her many stakeholders that are important to the business.

Team

Candidates

Sarah

Advisors

Investors

Customers

Weekly Updates

ProductUpdates

Potential Investors


With Visible, she can centralize her data in one place…

Existing Integrations


She can turn her data into a story…


..and understands how her stakeholders are engaged.


Used By…

visible.vcVisible.vc | Private & Confidential - All rights reserved - Visible.vc, Inc.

Questions? Want More? Contact:

Brett Bivens [email protected] - 269.419.6059

mailto:[email protected]