By offering a comprehensive overview of your portfolio companies’ performance, challenges, and future prospects, you’ll demonstrate transparency, accountability, and your commitment to maximizing returns for your valued investors with real-life examples. In providing insights into the performance and growth of each portfolio company you’ll be showing evidence of your investment acumen, surely, but after you’ve identified a promising opportunity, your portfolio companies will be leaning on you to help them achieve their growth milestones. Your investors want to know how your firm helps their investment grow. 

By planning these updates as virtual events, you provide a platform for investors to actively participate in the conversation, ask questions, but perhaps more importantly, it can allow your portfolio companies’ leadership an opportunity for collaboration with investors and other stakeholders. It’s now a forum for knowledge sharing, reinforcing your commitment to building a thriving investment ecosystem.

It’s nice to tell your investors their investments are working. It’s a differentiator when your portfolio company leadership gets on camera and tells your investors that your firm is working hard for them. 

What’s Included in an Update to Investors When You Gather Feedback from Portfolio Companies?

• Portfolio company performance
  • Financial metrics, including revenue growth, profitability, cash flow management, and key financial ratios
  • Growth milestones achieved 
  • Any intellectual property assets, patents, or innovations developed
• Operations updates 
  • Product development
  • Sales and marketing initiatives and customer acquisition strategy and projections
  • Operational efficiency improvements
  • Updates on strategic partnerships, collaborations, or joint ventures and the value creation resulting from these alliances
• Market analysis
  • Industry trends, competitive dynamics, and potential market opportunities or challenges
  • Insights into the broader startup ecosystem surrounding the companies’ offerings
  • Regulatory developments
  • Industry events or conferences
  • Competitive advantages, unique value propositions, and market differentiation
  • Risks and challenges with mitigation strategies
  • External factors that may impact the performance or growth 
  • Potential for creating barriers to entry and driving long-term value
• Value-add from the venture capital firm
  • The strategic guidance, operational support, and introductions to potential customers or partners delivered
  • Testimonials from portfolio company leadership
  • Case studies on the impact the firm is having on the portfolio companies
  • Plans for changing or augmenting the offerings

Other topics to cover in this update

• HR Updates
  • Management team changes and additions to the advisory board
  • Any strategies and initiatives undertaken to attract and retain top talent
  • Notable hires or talent-related achievements
  • Highlighting individual contributors
  • Highlighting efforts related to environmental responsibility, diversity and inclusion, or corporate social responsibility
• Future outlook
  • Insights into emerging investment opportunities or follow-on rounds
  • Exit strategies for each portfolio company, IPOs, mergers and acquisitions, or strategic partnerships
  • Highlight any progress made towards achieving exit goals
• Ideas from the pit
  • 20% time projects teams or individual contributors are working on
  • Other offerings the companies are considering
  • Cutting room floor ideas from portfolio companies’ internal hackathons or brainstorming sessions

Who’s Involved?

• Your Portfolio Manager actively engages with the firm’s portfolio companies to collect feedback, key performance metrics, and updates on their operations. They conduct interviews, meetings, and analyze data to gather comprehensive insights for the report, identifying trends, assessing the overall performance, and distilling the information into meaningful insights for investors. Drawing from their understanding of the portfolio companies and the venture capital landscape, the portfolio manager helps shape the narrative of the report.
• Your Relationship Manager liaises between the VC firm, investors and portfolio companies, proactively seeking feedback from portfolio companies on their experiences working with the firm, addressing any concerns, and relaying the feedback to the appropriate internal stakeholders. Drawing from knowledge of the portfolio companies, they shape the narrative of the report, highlighting success stories, challenges, and key insights gained from the feedback received.
• Your Operating/General Partners evaluate the performance of portfolio companies, providing insights on growth potential, market trends, and risk assessment. They work with portfolio companies on operational efficiency and growth, engaging with portfolio company executives, gathering feedback on the firm’s involvement and can help align the report’s objectives with the firm’s overall vision and investment strategy. Building and maintaining investor relationships, they alert investors to future rounds.

What are the goals of these updates?

Well, it depends on the target audience. Is this an update for all of your portfolio companies or is it an update for your investors (or both)? If the update is for your portfolio companies, the goals might be:

• As any concerns or issues are raised, the firm can support and resolve the challenges faced by the portfolio companies
• By sharing successes, failures, and lessons learned, the firm demonstrates a commitment to continuous improvement, which can enhance confidence and strengthen the partnership between the firm and its portfolio companies
• Best practices can be shared between the firm and the portfolio companies
• Target acquiring companies or the path to IPO might be discussed to help maximize portfolio companies’ sale price when facing potential exits
• Collaboration opportunities can be created between portfolio companies with strategic partnerships or volume purchasing agreements

If the update is for your investors, the goals might be:

• Actively engaging with your investors and keeping them informed about the progress of their investments. Virtual events as a two-way communication channel allow investors to ask questions, provide input, and stay involved in the decision-making process
• The overall performance and composition of your portfolio, highlighting the diversification strategy you employ to manage risk and attract new investors. In providing data on metrics like revenue growth, user acquisition, market penetration, and profitability, you validate your investment strategies

If the update is for both, the goals might be:

• Aligning your investment strategy with the expectations and goals of your investors and to Identify areas where adjustments or pivots may be necessary to achieve better outcomes
• To show how you’re creating long-term value for its investors, giving insights into the strategies and actions being taken to maximize returns based on your market intelligence and interpretation of industry trends. By keeping your investors informed about developments in specific sectors, you show how this insight goes further than the current composition of your funds
• Sharing feedback, challenges, and potential hurdles faced by the companies in a risk assessment enables investors to evaluate and adjust their expectations accordingly
• Transparently sharing your big wins along with your misfires and any strategy for path correction helps build trust and loyalty, increasing the likelihood of future investments and potential referrals to outside investors

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

Regardless of who you are presenting to, case studies of how you’re helping your portfolio companies with their networking, funding, and business challenges should be the lead in this update. Pre-record interviews with your team and their leadership, and optimally have them in the event answering follow up questions in chat live or in a breakout room after the interview. If you can solicit questions from your investors or portfolio company leadership ahead of time, you can more carefully curate the message you want to deliver.

Other things to consider are:

• Panel discussions in which your portfolio company leadership talk about the wins, but also their challenges in working with the firm. It’s OK to keep it real. 
• Have your portfolio leadership break out by business function and bring in a thought leader with that expertise (e.g. finance, marketing, engineering) for Q&A sessions amongst the leadership
• Other ideas for visiting thought leaders
  • Current or former regulators dealing in portfolio company verticals
  • Post-doc researchers or research fellows working on related subjects
  • Data scientists
  • Popular creators (Substack, Twitter, Medium, YouTube, etc.)
  • Leadership from your portfolio companies who have successfully exited
  • Futurists like Shelly Turkle or Joi Ito
  • A Chief Innovation Officer like Anne-Marie Slaughter or Alexander Osterwalder
• Have your relationship manager and portfolio manager team up and matchmake one-on-one investor/leadership sessions for a mentorship opportunity
• Give rewards or recognition for investors or portfolio managers who are going above and beyond in contributing to the success of the firm
• 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

Of course analytics, the sharable multimedia content generated, and interactivity all benefit you here, but this update to your investors can do some of your job for you if you let it. The networking opportunities presented by focusing on your portfolio companies give their leadership access to your investors. Of course, they might be busy, but if they are interested in attending, they are likely interested in mentoring. 

We always address sponsorships in this section, but we wanted to encourage you to dogfood, here. If investors find your portfolio companies’ products/services useful, the word-of-mouth once they get it in their hands is likely the best kind of marketing that your burgeoning startups can get. 

Depending on the subject matter and who’s speaking, compliance should be a bit easier to pass with an update like this. It’s quick to schedule a virtual roundtable or speed networking session; you can imagine that the stakes are lower with these than some of the other kinds of investor updates. We always love the idea of getting your key people into breakout rooms and having them field questions/lead a conversation to pump up the doings of your portfolio companies and liaise between leadership and investors to make new relationships. Friends of friends make friends faster.

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 – Market Insights
• Virtual Events and Venture Capital – Strategic Adjustments
• Virtual Events and Venture Capital – Risk Assessments
• Virtual Events and Venture Capital – Bonus: Personalized Investment Performance