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How to Streamline VC Portfolio Company Updates


One major complaint VCs have is that their portfolio companies won't communicate with them and they have to be chased down. Portfolio companies are an extension of your organization, and the proper flow of information with them is key to success. However, on the flip side, overcommunication due to a lack of an agreed-upon process can also be a detriment to both parties as it leads to frustration and lost time that could be spent on strategic initiatives.

The Project Management Institute (PMI) recently released a report entitled The High Cost of Low Performance: The Essential Role of Communications that outlines the risk of poor communication. They estimate that for every $1 million of capital invested, $75,000 of return on investment is at risk due to poor communications alone. 

To ensure that there is a proper flow of information between your fund and portfolio companies, it’s important to have a portfolio communication plan in place. This plan must have a full buy-in with each portfolio company to make sure that everyone is on the same page when it comes to communicating the key metrics needed for you to make smarter decisions.

What are the factors of an effective portfolio communication plan?

  • How much information needs to be communicated, and how often
  • The best way to communicate it
  • Protecting or encrypting sensitive information
  • Who are the stakeholders responsible for overseeing the plan
  • Who is in charge of facilitating the flow of information at each portfolio company
  • Having a change management plan in place
  • Put an escalation process in place if effective communications aren’t happening or aren’t up to the standard

If you are finding that your communication with your portfolio companies is becoming a hindrance, you need to get in a conference room and start drafting a plan.

The Basics of a Portfolio Communication Management Plan

The project portfolio manager must be involved, and work to identify the stakeholders that need to be involved in putting a plan together. Some of these individuals may include the project sponsors, portfolio company founders, VC management team members, change control board, steering committee, and technical lead. 

You must take into account all the comms involved in managing portfolio information such as composing and reading emails, board representation, conducting meetings, measuring and reporting portfolio performance, and then streamline all of them for a smooth portfolio communication management process.

Some of the different typical initiatives you would develop as part of your portfolio communication management plan include:

  • Key milestone updates
  • Key performance indicators
  • Budget vs Actual Reporting
  • Core financial statements – P&L, Balance Sheet, Cash Flow
  • Cash Burn

If this all sounds overwhelming, it is. As a venture capital firm, you’ll always need to have an eye to the performance of the portfolio of your companies, and having to engage in a lot of back and forth for clarity on company updates is in no one’s best interest. 

Since it’s in everybody’s best interest to make sure communication is as streamlined as possible, one of the easiest ways to save time on back and forth is to utilize reporting technology.

The Use of Portfolio Monitoring & Reporting Dashboards

SaaS tools like Visible and Allvue are designed specifically as an investor/startup communication platform that makes company updates and reporting frictionless. VCs can easily track and request KPI updates on the platform.

Some of the way these VC communication platforms streamline communication include:

  • Save time on emails and phone calls by keeping all communication within a single platform
  • Live reporting dashboards that integrate natively with startup financial platforms and automatically notify you when a KPI moves above or below a threshold
  • Automatically aggregates the metrics across your entire portfolio
  • Dashboards can be populated with charts and graphs for easy interpretation
  • See an overview of each portfolio company, with a look at all historical data and any attached notes or documents
  • Automatically generate reports for your LPs with key metrics, operating information, and qualitative updates

Tools like this vastly cut down on the amount of time you need to be spending on active communication, while also allowing you better service your stakeholders.

Of course, organizing stakeholders and getting everyone on the same page with a new communication plan or service is a major endeavor. It can help to have some expert support in your corner, which is where an outsourced startup financial expert comes in handy.

Get Advice From The Startup And VC Experts

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When you partner with Punch, you get financial professionals with years of experience helping funds just like yours with real-world business and financial suggestions and options. But the beauty of the Punch team is that you get this expertise at a fraction of the cost of building your in-house team.

Let’s connect to give you a customized quote and free consultation. You have nothing to lose but so much to gain.

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