Data is power in venture capital. Effective portfolio support hinges on your ability to collect, analyze, and act upon relevant data. Companies are contractually obliged to provide investor information provisions—agreements that enable investors to obtain regular updates on key performance indicators (KPIs) and financials. When your firm can analyze this data, you can make informed decisions about the future of each portfolio company.

A part of Bessemer Ventures Partners’ commitment to being founder-friendly is flexibility in how this data is received. Wilkinson says, “We don't want to put too much strain on teams because we know that any time we take away from them running the business is crucial to their longer term success… That means that if you're going to conform to our process, that's great. But if you already have reporting in place or ways that you want to share your information that's not aligned with our process, then we'll take that too.”

Metrics such as Internal Rate of Return (IRR) and Multiple on Invested Capital (MOIC) serve as essential yardsticks for assessing the health and potential of a portfolio company. These metrics provide a quantitative snapshot that can guide your investment planning, as well as the conversations you have with founders and their management teams.

Agreeing on KPIs is a good way to structure and make space for data-driven discussions. KPIs should align with the long-term financial goals of the portfolio company, provide actionable insights, and be closely monitored. Data analytics tools enable easy, real-time tracking of these metrics.

Many portfolio companies rely on their VCs for recruiting executive talent or connections to top service providers. A strong Vice President of Sales or an exceptional security audit firm aren’t easy to find, and a VC firm’s collective network often holds the answer.

When connecting with portfolio companies, it’s important to approach their talent needs in an organized way.

Charles Guo, Portfolio Growth – VP Head of Strategy and Ops at Sapphire Ventures, explains his firm’s process: “We really pride ourselves on giving white glove service. That means it's more cultivated, it takes more time, it's more tailored and requires a back and forth with the portfolio—whether it's finding the right customer to introduce them to or the right candidate for a specific talent.”

He continues, speaking to the downstream benefits of such an approach: “This is how we're trying to elevate the experience so that at the end of the day we become someone who they think of immediately when they think about who on your cap table is really a value-add investor.”

Firms using Affinity can gain a comprehensive view into the positions and services their portfolio companies need by following this process:

1. Identify potential candidates who match the portfolio company’s required skills and culture fit.
2. Build a network of potential candidates, including executives, specialists, and other key roles who have relevant industry experience.
3. When communicating with a portfolio company, note down which positions or services they are looking for and track this in Affinity using fields called “Recruiting Needs” or “Service Needs” in a Deals pipeline. Or, automatically collect this data by asking companies to fill out a Typeform then automatically route that data directly into Affinity. 
4. With the roles identified, build a list of your contacts who are, for example, VPs of Sales, security audit firms, etc. 

The missing piece to this puzzle is understanding the strength of relationships within your firm’s collective network, and strategizing with portfolio companies to warmly connect them with the most relevant talent, customers, co-investors, and experts. Affinity’s relationship intelligence turns your firm’s vast amount of communication data into actionable insights that make it easier to identify connections and make warm introductions.

A firm’s network can unlock many opportunities for portfolio companies—for recruiting, as discussed above, but also for raising additional capital, identifying customers, and closing business opportunities.

Historically, fewer companies take leaps into new markets or products during economic downturns. McKinsey research found that even when executives see opportunity within times of change, fewer than 30% feel able to capitalize on it. Companies instead tend to Instead, they retreat and focus on their core business model and customer pool. This shrinks the competitive landscape, opening opportunities for bold companies with strong financial backing and operations. 

Aside from the initial monetary investment in the company, this ‘long view’ is the biggest value that VCs can offer a founder. While founders stay laser-focused on ensuring that their business runs smoothly, their investors can employ a wider market analysis and strategy that helps portfolio companies build for the future by seizing market opportunities that others are afraid to jump on. 

For Bessemer Venture Partners, this involves using their data to help portfolio companies benchmark themselves against others in the market, which can identify new growth opportunities. Wilkinson says, “It's on my team to structure data so that we can add value to founders and their teams around where they sit versus their peers. We've seen a lot of requests for those types of insights from our portfolio companies.” 

‍Guo speaks to the ways Sapphire Ventures promotes co-learning moments in their portfolio and with other subject matter experts: “We’ve developed content that’s really easy for our portfolio companies to be a part of, like our Slack community for engaging with like minded-personas within the portfolio—for CEOs but also engineering leads, people and talent leaders, etc. This way they can rely on the entire Sapphire portfolio. We also have community events where we bring in practitioners at other large unicorns or public companies to offer guidance.”