Gimme gimme never gets
January isn’t just for trying new workout routines, going vegan or taking a booze-break—in the world of venture funds, it’s also the beginning of reporting season. The start of the new year means that we, like every other fiduciary, are looking back at the prior year to see how we did so that we can report to our stakeholders. And by how “we” did, we mean both us and our portfolio companies.
It’s obvious that we rigorously measure both financial and impact performance, but what’s not as obvious is just how much work that is … for us and also for every company we invest in. When a company takes money from investors (just like when we take investments from LPs) they agree to a layer-cake of reporting obligations. For the most part, those obligations are satisfied by simple accounting systems—but in the case of impact measurement there isn’t one ‘Generally Accepted Accounting Principle’, so often each investor will have their own requests based on what they care about
Here’s a little peek under the hood of what we collect at year end:
Financial statements, cap table and budget
Company specific unit economics and growth performance indicators
Company specific impact metrics to assess the tonnes of CO2 equivalent, clean energy generated or waste mitigated, plus any secondary impacts created by the product
Workforce diversity data
… which informs our deployment strategy, post-investment support and reporting cycle, shown (simplified) here:
We know it’s a lot, but that’s why we take a lot of effort to both ease the burden on companies AND make the exercise as valuable for them as it is for us. Everything listed above comprises our annual investor reports, our public Climate Impact Report, our internal post-investment support strategy, the content of our AGM and the baseline for our quarterly investor updates (not to mention this newsletter). We manage people’s money—we make sure they’re informed.
And, to keep things interesting for our investors we switch up the AGM format every year. Last year we held a large event concurrent to our first Founder Summit and had noted climate activist Bill McKibben speak. This year, we’re creating a showcase of our portfolio companies by compiling a video that features an insider look at each company’s product, the challenges they’re facing and how they’re positioning themselves to win. We are so excited to put the spotlight on our amazing founders so that our investors can better understand the underlying health and value of the portfolio. Many are also joining us and our investors live for both in-person and virtual events.
So this month we don’t have a Founder Spotlight for you. We’ve asked enough of our founders, and our team is busy cooking up a year’s worth of exciting news to share. We will get back to your regularly scheduled conversations with Mike, but for now we’ll just tease that we have an exciting announcement coming up next month.
