Here's how you can effectively convey a portfolio company's financial performance to investors.

Beyond traditional financial metrics, consider highlighting the non-financial performance indicators of your portfolio company. These might include customer satisfaction rates, employee engagement scores, or social impact metrics (if applicable). Investors are increasingly interested in the broader impact of their investments, and showcasing a company's positive influence beyond financial gains can be a powerful differentiator. It demonstrates a holistic approach to value creation and can attract investors who prioritize sustainable and responsible businesses.

Understanding your audience is critical when conveying financial performance. Investors may vary in their expertise, interests, and expectations. Tailor your presentation to address their specific needs and concerns. For instance, some investors might prioritize growth potential, while others may focus on profitability or risk management. Knowing your audience helps you emphasize the most relevant data points and ensures your message resonates effectively.

When presenting a portfolio company's financial performance, it's crucial to understand your audience's background and interests. Tailor your presentation to meet their expectations and address their concerns. Whether they're seasoned investors looking for detailed metrics or new investors needing clear explanations, customize your content to be relevant and engaging. By knowing your audience, you can highlight the aspects of financial performance that matter most to them, ensuring a more impactful and persuasive presentation.

Here's my framework: Know Your Audience: Tailor your communication to each investor's expertise and interests. Speak their language, not just financial jargon. Start with the Big Picture: Summarize key financials (revenue, profit, etc.) upfront. This provides context for the deeper dive into growth metrics and projections. Data Tells a Story: Use visuals to illustrate growth trends and highlight market comparisons. This makes complex information digestible and memorable. Be Candid About Risk: Don't shy away from discussing potential challenges. Investors value transparency and a well-thought-out risk mitigation plan.

In addition to providing a financial summary, I recommend including a comprehensive analysis of the company's capital structure. This should detail the various sources of funding, including equity, debt, and any convertible instruments. It should also highlight the company's debt-to-equity ratio, which provides insights into its financial leverage and risk profile. This transparency in disclosing the capital structure allows investors to assess the company's financial stability and make informed decisions based on its overall financial strategy.

Start with a concise financial summary that highlights key performance indicators (KPIs) such as revenue, profit margins, and earnings before interest, taxes, depreciation, and amortization (EBITDA). Present these figures in a clear and easily digestible format, using charts and graphs to enhance understanding. This summary provides a snapshot of the company’s financial health and sets the stage for more detailed discussions, allowing investors to quickly grasp the overall financial status.

Provide a clear and concise financial summary that highlights key performance indicators (KPIs). This should include revenue, profit margins, cash flow, and any significant financial trends. Use visual aids like charts and graphs to make complex data more digestible. Summarize the financial health of the portfolio company in a way that is easy to understand, ensuring that you communicate both the current status and historical performance succinctly.

For me the most critical four board level KPI's are: 1. How many months of runway is there remaining? 2. What percentage of a given months operations ( salaries and expenses ) are covered by incoming sales? 3. In how many months does equity turn negative ( in those legal jurisdictions where negative equity needs to filed and reported ) 4. Monthly burn rate. In order to get these four, you need to understand managerial and financial accounting and make the link from your marketing and sales pipeline to incoming revenues.

Illustrate the portfolio company’s growth through metrics like year-over-year revenue increase, customer acquisition rates, and market share expansion. Use data to showcase consistent growth patterns or explain strategies for overcoming any downturns. Highlighting these metrics not only demonstrates past success but also builds confidence in the company’s future potential. Ensure that your growth metrics align with the investors’ expectations and industry benchmarks to strengthen your case.

Highlight growth metrics to demonstrate the portfolio company's progress and potential. Include data on customer acquisition, market expansion, product development, and revenue growth rates. Investors are particularly interested in understanding how the company plans to sustain and accelerate growth. Presenting a clear growth trajectory, supported by concrete data and strategic initiatives, will help build investor confidence and showcase the company's future prospects.

Provide a comparative analysis by benchmarking the portfolio company against industry peers. Use metrics like profit margins, cost efficiency, and market positioning to show how the company stands relative to competitors. This context helps investors understand the company’s competitive advantages and market challenges. A well-constructed comparative analysis can underscore the company’s strengths and strategic positioning, making it more attractive to potential investors.

Most of my companies have been cash negative, so it is all about the length of the runway. Too many boards leave it too late to start fund raising. For a controlled fund raising process, including pre-marketing, ideally I would like to see 9 months of cash remaining, if not more. Two good points of the year to start fundraising is the end of January for a term sheet or closing before summer holidays ( even in the US ) and after the US Labor Day weekend for a term sheet or closing before the various end of the year holidays.