Helping your investors track performance metrics, financial indicators, and milestones achieved by portfolio companies enables them more informed decisions about future investment opportunities. Demonstrating where investments may be underperforming helps them understand why you’re reallocating capital to better-performing companies or sectors, and assessing the success of exits helps establish your next fund as the primary target for the capital you just helped raise. Being up front about the opportunities your firm may have had and passed on (along with the lessons you learned) builds trust and attract additional investments or referrals from your investors when the next fund raise starts.

You’ll probably be excited to see your investors and field questions when you’ve had a good year/half/quarter, and maybe not so much when you haven’t. You’ve been through this before; as investments tilt, more phone calls, emails, some investors pulling out, backing off on follow-on rounds – it happens. You might not have all the answers, and investors may not love the answers, but they love that you are answering them. Face to face (or as close to that as possible) is the best way to handle these difficult conversations.

What’s Included in a Performance Report?

• Portfolio Overview
  • Composition of the fund
  • Analysis of Industries and sectors represented
  • Analysis of individual portfolio companies’ performance
• Fund Performance
  • Revenue growth, profitability indicators, and other key financial metrics
  • New rounds and raises
  • Revisions to portfolio company valuations
  • The impact of any IPOs, exits, mergers and acquisitions
• Market Insights and Trends
  • Emerging technologies and their potential impact
  • Regulatory changes affecting the industry
  • A competitive landscape analysis

Who’s Involved?

• Your Investment Analyst gathers data, analyzes financial and operational metrics, compares performance against benchmarks, conducts an in-depth analysis of financial and operational metrics to assess growth, profitability, and overall company health, and uses market research to inform their insights. They also assist in creating visual aids and provide supporting explanations to effectively communicate the findings.
• Your Portfolio Manager monitors the performance of the portfolio, analyzes data provided by investment analysts, identifies trends, and makes strategic decisions. They assess risk, optimize the portfolio, evaluate performance, and engage in investor relations. Staying informed through continuous learning and research helps inform their decision-making. They may also manage a team of investment professionals, fostering a high-performance culture.
• Your Chief Financial Officer prepares financial reports, analyzes metrics, ensures compliance, and collaborates on strategic financial planning. They lead risk management, budgeting, and forecasting, developing financial strategies and providing support for strategic decisions. They monitor portfolio company performance and help company leadership to ensure financial integrity and transparency.

What are the goals of these updates?

• Provide investors transparency and keep them informed about their investments’ progress and potential risks associated with their investments
• Enable investors to benchmark the performance of their investments against industry standards, market indices, or peer companies
• Offers perspectives on market trends, emerging opportunities, and potential areas for growth or divestment, enabling investors to make strategic decisions
• Provide historical data and analysis, allowing investors to assess the progress and success of their investment over time
• Discuss potential exit opportunities for portfolio companies, such as mergers, acquisitions, or initial public offerings, and provide updates on the progress of any ongoing exit processes
• Highlight any social or environmental impact created by portfolio companies

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

When you think about planning this update as a virtual event, this is a largely data-driven presentation, and the use of dynamic visual representations of performance is expected. Balancing the limited time of your investors and the amount of data you have to share with them is always a top priority, and to avoid having to make that decision as a firm, you may want to give them the option instead. Fund performance on the main stage, and sector- or portfolio company-specific updates in breakout sessions (with on-demand video post-event).

Every virtual event is a networking opportunity, and every networking opportunity is a chance to gain insight into clients’ needs or ideas on new investments. Putting your analysts and portfolio managers in individual breakout rooms to field questions can double the impact of the choose-your-own-adventure style report format suggested in the previous section. 

This may not be the report that lends itself most to bringing in an external thought leader, but is the perfect showcase for the team members leading your aspiring unicorns. If you’re going that route, a tech demo or pre-recorded case study might make sense. The one reason you might want to bring in an external guest is if there’s a position that appears to be controversial by the number of investors questioning it, but your firm is confident of the strategy moving forward – the guest may have some deeper insights into the position and also sees the potential. 

Other things to consider presenting:

• Breakout rooms by portfolio company with portfolio company leadership
• Breakout rooms with your sector analysts/specialists
• Visiting thought leaders to support a position on a sector or investment
• Post-event on-demand video can include snippets of the pre-recorded video presentations to use in public or investor/portfolio company-only social channels and can be incorporated into a podcast

Benefits over your traditional communication strategy

Two-way communication is a huge advantage for you when presenting your performance updates, but there are things you need to do to keep that advantage. One thing that you want to prevent in a virtual event on fund performance is a pile-on of questions about the same topic or strategy that lean critical. For our more public-facing events, we use a video Q&A sourcing app called capsule to get questions from the prospective audience members. This probably won’t be your go-to for performance updates, even as you’re trending upward. Instead of live Q&A or something like this, where investors can see what other investors are asking, we think that an email or form request for questions ahead of the event is best suited for excellence here. This lets you cull, combine, and trim queries from investors to help you answer them in a way that addresses their need for more information while also supporting your strategic position. 

In the event, you’ll want to moderate questions before publicly showing them. That might mean turning off public chat, which we never love to do. If most of your events have the public chat on, your investors will understand. They may question it, they may not like it, but they’ll get it. The rest of the virtual events they attend usually have public chat off by default, so this won’t be strange to anyone. 

That being said, we still love breakout rooms for this update, but keeping those conversations to a small group will work in your favor. One or two of your staff and potentially leadership from a portfolio company in pre-assigned rooms with a small group of investors (or even just one investor) helps you keep messaging clear and cohesive. Make sure your team is up to date on compliance ahead of time.

In addition to the transparency and trust you build with interactivity, the analytics and shareable multimedia content generated are always an added benefit to a virtual event on performance.

We wanted to let you know in Part I of this series that this section might feel like it gets a bit repetitive if you’re reading through the whole series at once. We’re thinking first of the reader of the individual post and trying to point out the specific ways that the benefits of virtual events over an emailed slide deck or phone call pertain to the particular update. A bulleted list of benefits of virtual events over traditional comms are things you probably know already (and we already wrote that post). 

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 – Market Insights
• 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