The Next Round - Optimizing Your Next Financing with Investor Reporting

Private & Confidential - All rights reserved - Visible.vc, Inc.
The Next Round
Optimizing Your Next Financing with Investor Reporting

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

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
“

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
“

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
“

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 Metrics
Buffer
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

Early Stage Most Valuable Metrics
Buffer
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 Metrics
Buffer
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 Metrics
Buffer
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
Product
Updates
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.

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The Next Round - Optimizing Your Next Financing with Investor Reporting

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