In the fast-paced and ever-evolving world of venture capital, making informed investment decisions is crucial for the success of your firm. With the market landscape always shifting, your detailed analysis of market dynamics and competitive intelligence shows insight into industry trends, emerging opportunities, and potential risks. Your investors will know that you are ready to pounce when you identify promising investment opportunities while minimizing downside risks. In this report, you’ll also demonstrate how your decisions in the past have played out, highlighting your investments in the markets you feature.

This report may or may not include your firm’s or funds’ specific performance (which we refer to in Part I of this series), although it’s probably smart to pepper in the wins and losses as your insights are reflected in fund strategy. 

It is a chance to show off, where you differentiate from other firms with your new and novel ideas; things you’ve added up before or in a different way than your competitors. It’s a chance to boast that the insights you had in the past resulted in the gains your investors have received because of the risks you’ve taken. It’s a chance to pump your people up and let investors know that your team is big-brained. Investors like access to those brains every so often in asking for feedback on a proof-of-concept they’ve been working on or more likely to grow their own subject matter expertise. 

What’s included in an update to investors on market insights?

• Market overview
  • Current state of the market, including key statistics, trends, and drivers affecting the industry. 
  • Market size, growth rate, customer demographics, and competitive landscape
• Industry/competitive analysis 
  • Factors such as regulatory changes, technological advancements, and market dynamics 
  • Assessment of the major competitors in the market, their market share, strategies, strengths, and weaknesses
  • Comparison of the company’s performance against its competitors
  • Market research reports, industry publications, surveys
• Performance
  • Financial performance, revenue growth, profitability
  • A discussion of the key performance metrics and KPIs used to measure the company’s progress and success. 
  • ROI, customer acquisition cost, customer lifetime value 
• Projections
  • Overall market outlook and the company’s strategic recommendations
  • Growth forecasts, sectors or companies that show promise for future growth, and suggested acquisitions, investments, or partnership opportunities
  • Analysis of emerging markets and products or services either in development or your belief as to what the next logical step in the market will be
• Risk assessment
  • A discussion of potential risks and challenges that could affect the market or the company’s investment. This may include factors like regulatory changes, economic conditions, geopolitical risks, or technological disruptions. An overview of any regulatory or legal changes that may impact the industry or the company’s operations. This section discusses compliance efforts, potential risks, and the company’s strategies for mitigating legal or regulatory challenges.

Other topics to cover in this update

• Customer profile and marketing/sales strategy
  • Target customers, their preferences, behavior, and changing needs
  • Identify opportunities for market penetration or expansion
  • Promotional activities, distribution channels, and customer acquisition strategies 
  • Evaluation of the company’s product or service offerings, including their unique selling points, competitive advantages, and potential for innovation or diversification
  • Customer feedback or satisfaction surveys
  • Address sustainability and ESG initiatives and their impact on the business
• Operational efficiency
  • Cost management and supply chain effectiveness
  • Measures taken to optimize operations, improve productivity, or reduce costs

Who’s Involved?

• Your Market Research Analyst compiles relevant data on market trends, industry performance, and competitor analysis, creating visualizations to help others in the firm derive actionable insights and investment opportunities from the data. They keep track of regulatory changes and industry policies that may impact market performance. They may conduct surveys on consumer behavior and compare the marketing and sales strategies implemented by the portfolio companies versus those of competitors. This person may also be responsible for creating strategy, and their title might be Investment Strategist or Investment Analyst.
• Your Data Analyst sources and compiles relevant market data, including performance comparisons. They will often be responsible for distilling the large amounts of data they source and delivering it in a usable format to other analysts and strategists within the company. They use data visualization tools and statistical analysis techniques to identify patterns and provide valuable insights to support market performance assessments. 
• Your Portfolio Manager assesses the performance of the firm’s existing investments, gathering updates and milestones achieved by portfolio companies. They assess how the current market landscape, trends, and opportunities fit into the strategy of the firm or fund, and may focus on either sectors or countries/continents/regions of interest (often both). They assess risk and provide recommendations, working with analysts and partners on strategy. They may liaise with investor relations to incorporate investor perspectives into the report.

What are the goals of the market insights report?

The primary goal is to show investors you’re doing the groundwork to make informed investment decisions, everything below demonstrates support of this main goal: 

• Share market insights, trends, and emerging opportunities that are relevant to the firm’s strategy and investments
• Highlight potential or recent regulatory changes 
• Describe the disruptions or competitive threats in the market that may impact investors and the strategies for finding market expansion opportunities or exits
• Provide an objective analysis of the investment’s performance, including returns, risk-adjusted metrics, and market positioning, and growth trajectory
• Identify investment opportunities, highlight sectors, industries, or specific companies that show promise for future growth by anticipating market trends and disruptive technologies that have the potential to generate significant returns and the risks that might prevent that ROI
• Informing strategic decision-making within the venture capital firm itself

Some tertiary goals would be:

• Showing transparency around your decision making process
• Educating your investors and empowering them with a better understanding of the market, helping them make their own strategic decisions on allocation of resources and diversification
• Highlighting people within your firm that are doing the analysis and making decisions

Your different funds have different investor groups and different strategies, so you may want to break these reports out by fund instead of market type, analyzing different markets that the funds address. Providing unique and in-depth market insights, you’ll demonstrate your commitment to delivering value and standing out, differentiating your venture capital firm from their other investment opportunities. 

What can you include when planning this update as a virtual event to achieve these goals?

Bringing a thought leader in for a talk/Q&A during the market insights report makes a lot of sense. A talk by an external authority figure is sure to draw more attention from investors than just a standard report format, and by bringing them in, you’ll indicate that you get your insights from this kind of person, further building trust with investors. They can do an industry/sector/geo deep dive or might even look closely at one of the portfolio companies and the battles they’re facing.

A panel of experts on industry topics works here as well. Everyone wants to be on a panel. It’s likely you can find people to speak at low to no cost, especially when there’s no travel and accommodation necessary. Pre-recording a panel is OK, optimally you will pre-record and have the speakers in chat answering questions concurrently or in breakouts after the panel is presented.

Hear us out for a second about something a little different but a bit more exciting. We imagine your investors might like playing games, but games that educate. Military leaders often practice war games in WWIII scenarios where pulling certain strings works to advance their position while weakening the opponents’ positions. Negotiations are pitched, agreed to, rescinded, attacks are threatened, subterfuge is planned and executed, and there is a winner and a loser at the end of the simulation.

Some businesses practice this as well. We imagine that a yearly event concurrent or adjacent to your annual meeting where some people may attend live (but some investors cannot) where you have a specialist in the field develop and run a game for your investors would align with your report on market insights. The events usually run over a few days, and prizes/rewards make sense here. This just sounds fun, and we think that along with building community, it will be an event that your investors look forward to each year. We’re going to pitch this to the rest of our VC clients but please steal this idea – we’d love to see it come to life somewhere. This makes a lot of sense as a virtual event as you’ll get more participants if you’re planning it as one.

Depending on the industry and themes of your funds, you may want to use this report to explain how the environmental, social, and corporate governance initiatives that you and your portfolio companies are taking are making an impact. This can be a show and tell, maybe with some non-leadership portfolio company employees on hand to explain what the initiatives mean to them in day-to-day work. 

Benefits over your traditional communication strategy

Using the business war games idea above gives your investors an opportunity to network. You’re going to be able to use the analytics, the A/V you’ve created to make sharable multimedia content, and the interactivity with Q&A and breakout sessions can be used in this report, and as we’ll mention again later in this series, this update to your investors can do some of your job for you if you let it. In putting your team members in some on the war games teams, they’ll be networking, and that access to your investors can give deeper insights as to what they want from their investments and a venture capital firm in general. Remember Glengarry Glen Ross … ABPIR = Always Be Practicing Investor Relations.

A sponsorship makes sense for this section, why pay to make the war game if you can get a trusted legal advisor or accountancy that you work with to do it? They want to put one of their team members on those teams with your investors and staff. Let ‘em.

We know that we seem a little bit pumped on the business war game idea, but the market insights report is both historical and forward-thinking, like these games. The whole idea of the report is that you’re doomed to repeat it if you’re not learning, and this report is a huge learning opportunity for investors and again, a chance to show off your big brains, so the more access your investors get to the insights you’ve derived from your data and the people that have helped forecast, the more sticky those clients will be. 

More on this topic

If you haven’t read the other parts in our series on Virtual Events and Venture Capital Communications Strategy, check out the links below:

• Virtual Events and Venture Capital – Performance Updates
• Virtual Events and Venture Capital – Strategic Adjustments
• Virtual Events and Venture Capital – Risk Assessments
• Virtual Events & Venture Capital – Portfolio Company Reports
• Virtual Events and Venture Capital – Bonus: Personalized Investment Performance