Key Metrics to Monitor Your Portfolio Post-Investment

Important KPIs for any early stage investor

Theron McCollough

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Keys:

  1. The KPIs to track and figures to hit when performance tracking can change based on stage and sector. It’s more important to understand how the metrics serve the specific goals of the startup and whether they indicate that the company has the growth, sales, and customers to reach the next level before the zero cash date.
  2. For early stage investors, it’s important to learn how “revenue” is tracked when you don’t have any. For startups, pick three metrics to measure early & often to quantify value and product-market fit.
  3. Be sure to understand their sales method. There is not just one recipe that fits all startups; it’s more about justifying the rate and showing where the breaking points are.
  4. Track churn over time. At the beginning, a company may have a higher churn, but it should refine and decrease as customers buy-in, love the product, and share it with others.
  5. Burndown becomes significant when you understand the venture goals. What is the plan? With this level of burn, will you have enough employees and revenue to propel the company to the next level and justify the next round of funding? Map it out and strategize to understand the status of the company’s post-investment growth.

Pitch decks reviewed, due diligence completed, check signed, and capital deployed. What now?

How can you measure the success of your private market investments and portfolio overall? Have you validated your thesis or are there any changes you should make? How can you track your performance post-investment?

Choosing the right KPIs and tools to manage your portfolio is critical to managing your investment fund, but varies based on the company’s stage and sector. Many VCs have their own opinions on what numbers and figures to hit, but I find it more important to understand how the metrics serve the specific goals of the startup. Based on the strategy laid out to accomplish X, Y, and Z, what are the steps and milestones your portfolio company needs to hit and are the metrics on track? And are they convincing enough to be agreeable?

Growth Rate

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Theron McCollough

Managing Director at Citizens Private Bank | VC/Tech; past Managing Director with First Republic,@SVB_Financial. founder, investor, limited partner, and banker