For many startups, the moment their VC money hits the bank, is both an exciting and nerve-wracking one. On the one hand, they’ve got the funding and the support to follow their vision, expand their team and build out their product. However, it also comes with an added responsibility – and a whole new group of people you need to keep updated.
After a number of interesting talks with both VC’s and entrepreneurs, I started to think about the board-reporting process – and how it varied from company to company. In addition, it was interesting to start hearing about how companies and their investors choose the right metrics to track.
Picking the right metrics
Speaking on that topic of choosing the right KPI’s and metrics to track, Dan Ouchterlony, a VC at Schibsted commented,
Picking the right metrics to track is extremely important. It’s really hard to be helpful without knowing where you stand from a board’s perspective. Ideally this should not be “on top” of what the company CEO is already tracking.
We try to work very hands on with the company when defining why and what to track. Depending on the founders, companies have very different starting points, so it’s also a great learning opportunity for us.
From a startup perspective, I asked Johan Tervald of Promobucket a little about their process. He had the following to say:
We keep an eye on our signup metrics on a daily basis, and the board and advisors has access to a GoogleDocs spreadsheet that’s updated once a week. The main metrics for us, is of course signups, new customers, weekly growth and all the simple stuff to measure. On top of that we analyze how active our user base is and how strong the viral organic acquisition is from week to week.
How could the process be improved?
Measuring and tracking periodical changes seems to be the #1 pain point for both startups and VC’s who I spoke to whilst researching this topic. There are a myriad of services providing business-metric dashboards such as Ducksboard and GeckoBoard - but none of them seem to be super popular with Swedish companies or VC’s.
In addition, a number of VC’s commented that the “continuous feedback loop” could be improved by letting investors have real-time access the dashboards and metrics, as opposed to simply reporting periodically.
Marta Sjögren, a VC at Northzone commented:
We increasingly have real time access to the companies’ KPI dashboards – with all key metrics. That keeps us continuously informed so we only need to discuss core strategy, adjustments and deviations to plan with the CEO/CFO. It would be great to see more companies give such access to investors.