How to report to your investors and to prospect investors? By Dan Akivis.

This is one reason we do and today's it. Yes senior associate at expansion venture capital and Lisa will talk about reporting to investors. So what happens when investors invest in you? 

And then, how do you keep in touch with the investor and make sure that the investor is happy and has a good clear understanding of what's going on with your company? So that month in the investment, there will be like, what, what happened did something change. 

So then LSP called by you giving us some beggar on yourself, add on expansion, venture capital. 

Sure, so my transition adventure is not been standard one, which I think is is is is a topic that resonates with a lot of people. Everyone has their own path in. 

But mine was I started my career in equity research where I covered various healthcare related spaces. 

And then realize that the fields that I was covering, 

and what I was doing was more of a job, 

and not really much of a passion, 

or what I really wanted to do was invest in companies and then understood pretty quickly that there's no, 

it wasn't very easy to transition from what I was doing to what I wanted to do, 

and kind of start snooping around the ecosystem and landed on a concept of a limited partner, 

which frankly, 

I didn't really know before and through that learning stumbled upon a single family office based in New York City, 

that was doing a lot of venture investing,
and at the time I didn't really understand exactly what that meant, 

but I knew that I wanted to do it and so I joined the family office and spent three years really actively looking at investment opportunities into both emerging managers and establish managers, 

and at the same time, 

have done a bunch of CO investments with the managers that we were invested in through that time. 

There. I realized pretty quickly that. 

While this second, this derivative job was very exciting and I got to meet tons of managers and a lot of people and adventure in the venture capital ecosystem. 

Generally I wanted to transition back, or I want to transition to investing at the companies directly. Expansion is actually one of the funds that was at the time thinking of raising capital,
and I met the two partners there,
Ryan and Joe through the kind of I'd say, 
the fundraising circuit, 
the family office fundraising target for emergent managers, 

and then fast forward to call it a year, 

and since we met, 

and I joined them as their kind of first full time outside higher to help them on expansion, 

venture capital. 

Alright, cool. So let's talk a little bit more about expansion of venture capital first. What does invest in in terms of what fields do you prefer and was stage to like to see? Sure. So we are a pretty general. 

However, we do have concentrations in fintech, real estate, technology, mobility, some enterprise software in some direct to consumer investments. And that's that's kind of our core. 

We, we invest pretty squarely at the seed stage. Most of the investments that we've made have been seed stage investments. 

We have tended to do Pre seed investments and some really Series A investments. 

But I would say that the CDs are core with check sizes of one fifty to five hundred flexing up to a million, depending on the stage we've had a chance to invest. 

Some really amazing founders from the real, real Carta yield street, all birds just to name a few. 

Perfect color definitions all on your sample. So let's talk about your role now at extension venture capital. What do you do there as a senior? 

So, yeah, so I think of myself as, like a Swiss army knife, you know, there is. 

Roles that are not definitional. Some of them is just things like, you know, I have standing calls with other venture funds to think of it to look at the companies that they're looking at. 

I tried to publish things on some of on some of the themes that we're seeing. We're current. I'm currently in the middle of, frankly, rebuilding our website. 

So there's a bunch of things that just maybe a little more clarity, kind of put together the infrastructure for our or infrastructure for portfolio updates. 

And so there's a lot of institutionalization. That is what I like to call it a venture fund. That kind of falls pretty squarely on my shoulders. And so that's, you know, I would say, call it around eighty percent of my job. 

Pre covet. The other twenty percent of my job has been to go out to all sorts of events and meet all sorts of interesting people. And that is obviously been temporarily shelved and perhaps even permanently. But that's certainly been a part of my job. 

And so now, the question becomes, you know, how to fill the time. And I think that, for, for me, personally, it's being more aggressive with connecting with both other funds as well as the companies that they introduce us to. 

Right and yeah, you're completely right those peach events, those gray means they're gone. I missed that so much. It's just through my hard part, but let's talk about, you know, that was for me, personally, that was a big deal flow source. 
So I was finding like, a lot a lot of new introductions to founders through those events. Now. How do you source your deals? Where do you find those founders that you want to invest in? How do you find them? Yeah. 

So, Ryan and I have been pretty fortunate enough to develop pretty deep relationships and venture for me was through the L P. network where I really have a chance to get in front of a lot of different managers. 

And for Ryan, I think it's being inventor of the last ten years, and making a hundred and twenty or so investments. You know, he's had a chance to look, you know, get in front of lots of investors as well. 

So, I think the way that we think of it today is that we both have standing calls with various investors. I think I have probably around a dozen two dozen standing calls with investors,
and so for us, 

because we don't lead rounds because it was pretty friendly syndicate investor that doesn't necessarily have an ownership requirement how we get a chance to otherwise look at opportunities for those same managers in a totally non threatening way. 

And so that is, you know, that is certainly something that has been the primary driver or deal flow. 

Right, yeah, absolutely. And what do you think for founders who don't have those form introductions, you know, for those who cannot get this investor Who'll help them get introductions to the rest of the investors? What should they do? 

How should they substitute those beach events and those networking events? What should they do to find those initial first connections? Yeah, that's a good question. 

I don't think that there's a straightforward answer there, except for perseverance,
you know,
that there is, 

I can safely say that there's thousands of vc's and, you know, 

you don't necessarily need a warm intro even know it's certainly preferable and way more people would want that way of introduction, 

but the fact the matter is that there's lots of ways to get in front of an investor if if you reach out to an investor and that person does not reply the first time. 

Okay. I think that to the extent that you have a newsletter or, you know, an update on your business, you know, I think that you can proactively add that person to your list without ever actually speaking to them. Now. 

You do run the risk of on subscription, but hey, you need to do whatever you can in order to stand out from the crowd and so be it. Right? So, yeah, that's how I think about it. 
You don't necessarily need a warm intro, try cold, first hour, rather try warm first, but it doesn't work or 
you don't have a mutual relationship. 
Just cold outreach is is is the name of the game and listen, you just hope for, for the right conversion metric. 

Two conversations, right and I think, 

I think that the one very important thing is that founders under utilize their early connections when I'm on the phone with other investors, 

or I'm on the phone, 

even with founders, 

or when I'm thinking about portfolio companies, 

when I get their updates, 

I always end the call with, 

you know, 

is there anyone in your network that you can introduce me to and if you could get one introduction from COLLIN, 

every investor,
every other investor to either,
you know,
to another investor,
you can see how you can quickly scale one note of a connection too many, ever have to restart every time. 

Right? Absolutely. That's true. And warm introductions. They're not that hard to get. Even if you have, like, a couple hundred people in your network, like, for me, once I got just got that request from a founder who I met on one of the peach events like. 

Half a year ago, and he saw me on LinkedIn. I'm connected to the founder of a company, got an investment from the fund. He was like, hey, can you introduce me to them? So that they can introduce me to the investor? I respect that chain of connection. 

So, I do what you gotta do, right? Right, right. So now, let's talk about the reporting system. Let's see. 

They've successfully done this warm introduction, cold introduction, whatever they did, but they got the investment from that. They see what's next how often should they make reports? How deep should those reports be? Yeah. 

So it's funny that you asked that. So we have actually designed our own quote, report that we send out to portfolio companies. It's actually a pretty simple air table form where we asked them for some basic metrics, you know, from operating metrics to business metrics and fundraising metrics. 
And we essentially collect the data in that way. 
The the reason why we did that is because we realize that portfolio companies report on whatever schedule they feel like reporting and they essentially just and everyone gives you different pieces of data about how their company's doing. 

There's no way to normalize it and Benchmark it against other companies. And so, you know what I'm thinking of what a portfolio company should be doing by way of updates. 

I think that updates should kind of fall into two buckets, which is the financial update, which is kind of like, you know, whether it's GMV revenue or whatever it is, the gross margin burn and then runway. 

And then we go into sort of business updates, maybe, you know, how many new customers you subscribe, turn things like that. And then we could go into kind of a challenges section and then an ask section. 

Right? I think that all try to think about how to add value to their portfolio companies. But the fact of the matter is unless a portfolio company asks for help a lot of times. It's very hard for VC to just guess where they think they might need help. 

And start being proactive so I think that and asks section is very important in in your in your updates. Now. 

I know it's much easier said than done because the fact of the matter is there are a lot of investors out there that already templatize this approach to portfolio updates. 

And so you kind of need to you need to kind of bucket ties your effort into kind of these two separate segments of you're gonna have investors that want certain things from you on a monthly, quarterly basis. And then you're gonna, you're gonna have investors. 

That don't have that program in place and you're gonna have to make up your own updates for them. I think. 

But I do think that it's very important to have that in place,
because we have portfolio companies who don't have that in place and frankly,
we ask every now,
and then what's going on with this company,
which basically means that I need to reach out to the company set up a time to call, ask them the pertinent questions,
dissect the information,
put it into our and,
you know,
otherwise it creates a work for us that,
you know,
we wish that we could bypass by just. 
Having the company's be a little bit more proactive right? So the cultivation to ask section, I think that's just like essential. You can ask for anything. There usually isn't junctions. And a lot of people. 

You might find really weird ways of connecting to those people, so definitely follow the advice. And my my advice is always have an ask not necessarily in those quarterly reports. 

Even if you're jumping on the call with investor at, 

then they always ask you what do you want from me if you say just money it's probably they're gonna say no and if you say, 

I would love you to give me an introduction to X Y, 

Z or to investment that field, 

then it's more active. 

So to have that ask out there to have it Yep. In wording really simply let's talk about standardizing the specific report system. 

So, do you have any tools that you would recommend to founders who are doing their first, you know, quarterly report or maybe even annual reports? Are there any specific tools that could help them with that? Yeah. 

So, 

frankly, 

I think that, 

you know, 

if you don't have it currently templatize or standardize what we use and this is probably, 

I would say a very high level tool but we use air table for this. 

So our lives in Monday dot com, and our updates live in air table, part of the reason is that we asked for some very high level information. 

And I think that for us, it's boils down to around nine different fields or so. But if you're if you're starting from scratch,
and if you're reporting to an investor who doesn't have a,
a templatize or it doesn't have an approach to, 

to updates,
you know,
I,
I think that a lot of founders like,
painting a positive picture about their business. 
And I think that it's not always genuine to the investor, because I think the investors want to know about the challenges. I think the investors want to know about the failures. 

And I think that the reason why they want to know that is because there's certain ways that these investors could potentially help. And so when founders aren't being genuine, and or maybe not even genuine, isn't the right word but when they're just painting a picture of positivity. 

And then everything is going well, it becomes difficult for the investor to really understand where they can add the most value. 

And so I'm thinking about what would be great for as an update from portfolio company is. 

To the extent that you can dashboard out some of your that you're tracking for the success of your business, you should report on those, you shouldn't be very open with those KPI. So that investors see, hey, look, you know, I see that this person's chart is pretty high this month. 

That's okay. Right? 

Like, I think that the more honestly, the picture, the campaigns, the easier it is for you to be able to proactively, I don't even see the word raise money but it'll be proactively for when you do raise money for your current investors to sympathize with you. 

You have no idea how many times, you know, updates, quarterly updates seem like everything is going. Well, and then all of a sudden, the startup analysis of bridge around and that they're raising money right now. 

And the fact the matter is that some investors get blindsided because we thought that everything is going well and so, you know, it's, it's, it's very important that, you know, I think that investors have a very clear picture of what's going on to the business both positive. 

And negative, 

and so I think that you need to present the same exact that you're that you're tracking yourself and obviously every business has their own and what is driving their top line and bottom line. 

And so I think all those metrics needs to be reported on. 

Right, absolutely. And honesty is the key in this role, I think that honesty is the best policy. Absolutely, absolutely. And multiple books. I read multiple conversions between the corporate and the startup world as to why star pool is up. 

You know, it's people are more open more honest. I love it, but let's move on and talk about who should you send those reports to? 

So one of the advice I've heard from a few investors and few founders, that's the love to send those quarterly reports. 

Maybe shorten down quarterly reports, 

but still quarterly reports to the potential investors to show them the progress, 

the achievements and the same strategy or is it not really the way to do things for for new investors? 

I think that you don't need to go into the same detail as with credit investors and that's because you're still gauging whether they're interested in your business or not. 
And so you also don't know whether there is, whether some of the people on your list have 
competitive companies in their portfolio and so, you know, frankly, you probably want to safeguard that information a little bit more than with your current investors. 

We can always give them high level updates on how things are going over here. I do think that you have a chance to paint a picture that, you know, could be slightly different than the picture that you necessarily paint to the people who are closest to you. 

And I know, and I don't even think that that's and, you know, that disingenuous. 

But I definitely do think that there's probably a separation between what you should be telling prospective investors just because you don't actually know which hands is getting into your current investors. Right? Absolutely. 

So, here, let's get back to your personal investment preferences and specifically, especially in venture capital. 

So, 

when you're reviewing a potential portfolio companies have someone, 

you might consider it as an investment where the major factors that you're looking at, 

are those metrics are those the team backgrounds or is that, 

or something else? 

Yeah. So I think so. I think it kind of boils down to sort of a couple of different things when we, because we're relatively generalist fund relatively. We're maybe I should setback. 

We're relatively generalists to fund with certain sub concentrations. When there is a company that is pitching us. 

That is operating in one of the subsections that we have invested in, 

whether it's fintech real estate technology mobility we could pretty quickly think about the, 

the, 

the, 

and and the type of traction, 

or the type of team that we're looking for. 

So, you know, frankly, I'm currently pretty focused on fintech infrastructure and so, for me, I think that. 

I can relatively quickly channel check whether a company is working on something innovative or not with just the network that I've built in that space with investors the customers, 

the,
the corporate that we know. 

Just to kind of understand whether there's something there. Certainly, I would tell you that there's a lot of fields where the team is probably more important than necessarily, even the solution. 
I think that for for things, 
like fintech and for things like mobility, 
it's quite important that the team comes out of those sectors with some domain knowledge and expertise. 

In a way. That's not necessarily true for, for other companies. 

And I'm just gonna, you know, maybe not to throw anything under the bus, but things like productivity and collaboration tools don't necessarily need some specific expertise in that domain. 

Because, 

frankly, 

it's a much more universal pain points than, 

you know, 

people solving for last mile logistics or people solving for some sort of specific API call in some sort of subsection of a fintech infrastructure. 

And so, you know. 

I do think that the team matters and the second thing is it's I think it's your go to market approach. 

You know, 

unfortunately, 

if you're targeting, 

we have a couple of investments in mobility related startups where their target customer are and, 

you know, 

this is an example of updates where I think we've been on their update lists for several years. 

And for several years they're quoting conversation with and so it becomes very difficult for us to really understand right quickly interrupts and you hear what is. 

So is essentially a manufacturer of of, of of components. So I think it stands for original equipment manufacturer. 

So you should think of, like, so, for example, Foxconn is the Apple IBM because Foxconn for, for, for Apple, for car companies. 

It's, it's the car calling manufacturers. The producers of the actual car and so, you know, so, for example, if a companies have some sort of innovative Lidar technology that they want to sell to B M. 

W I think BMW there is considered the oh, yeah. And so,
and the,
frankly, 
these conversations take so long,
and so,
you know,
the team really needs to be concentrated on, hey, 

what the go to market approaches would be like,
you believe that this team can get the right people at these various manufacturers. 

In a very different way than productivity tools, which I think you can, you know, hack your way through product contact noon, LinkedIn, Twitter, and any of those ways that, you know, your go to market approaches totally different. Great. 

Right and yeah, I mean, that's the problem when you're saying that you're in conversations with you for, like, over a year, that means something's definitely wrong. something's definitely wrong. Either. Your sales cycle is just way too long where you're just the best salesman. 

Look yeah. Straight into the eyes of the problem. Let's talk about what you'd like to see specifically on a beach. So, where the major three points that you just have to see on the pitch deck, if you don't see one of those, you just pass the deal right away. 

I think there has to be a very clear explanation of of the problem. I think that a lot of people boil down the problem to one or two lines. But I think that, you know, I, I actually was thinking of it in a different way. 

Our pitch decks, our pitch decks really? The best way to convey information. And then I was thinking about this recently that perhaps. 

Some founder should be transitioning to memos instead of pitch decks and the reason why I say that is because there's only a limited amount of information that you can convey in a pitch deck and you're hoping to hopefully investor on for him to be interested enough to get on a call with 

you ask,
follow up questions and then start digging into your business.
I think that you can save a lot of you can save a lot of investors a lot of time by. 

Making, I'm just gonna make this up, like an epic queue style so, whatever you have on the website and, and whatever you think that some people might ask you by way of questions I think that it should actually be. 

Documented as opposed to just putting together a pitch deck, but going back to your question. I'd say problem solution in competition and specifically, I think that it's important to. 

Delineate exactly how you're different from the competition, right? Like, I think that, in more words, than just the table, right? Because everyone has this table of, like, us them boxes, check boxes and we have all the check boxes. 

They have some of the check boxes, and that's kind of where we are this is how they portray the competition. I think there's better ways of doing that. 
And perhaps adding words, in a way that a pitch deck doesn't allow you to do, could be much more meaningful than a pitch deck. And I actually think that perhaps should be a follow up material for investors. Right? Yeah. 

It's all I'm personally beak hazar over those chat boxes. I feel like, whenever I see a beach deck where the competition has like two or three those green checkmarks you have the whole line of it. 

I'm like, it's hard to understand where that noise is. 

Because we see a pretty often, right where it's like, I'm just gonna make this up, whereas, like, someone who is doing some sort of startup and then they show you like sales force or something else. That's of that nature. They show, you know, Salesforce those, like, three of these things and I do like seven of these things. 

Well, Salesforce is quite a successful company. And, you know, even if they only do these three things, they're able to build call it an empire on the back to those three things. 

And so perhaps there's something else that they're doing correctly that you're not necessarily portraying as accurately as you could be. In words. 

Right. So I think he has to be very careful, right? Absolutely. Not that we made some fun of some foundries for do that. Well, let's move on to the last question of today's app is a, which is a call to action. So, what's the one thing you want the listener to do? 

As soon as the episode is over? 

I think that you should draft the email and send it to the person that you were most apprehensive about, because you're waiting for a warm intro. I get the warm intro write. 

The email make sure you set a reminder double back with them in two to three weeks, if not proactively add them to the list, just make sure you can somehow get in front of the people you need to get in front of that don't necessarily go the way of warm interest. 

Perfect. Perfect cultivation will not take you long. It might give you a call with investor called. We invest from my lead to either investment or introduction to an investor who is going to invest or, you know, something will happen in place. 

So, don't just sit there and wait, I'm always big fan of those, you know, if, if that's gonna be, you know, maybe not very helpful. I still got some action. So do that. I personally will recommend here. 

Sales kill is gonna give you a list of emails that people have on LinkedIn. So, like, if you click on someone's profile on LinkedIn, and then add them on sales kill, it's, you know, we give you, like, three or four emails that they're using. 

So super helpful to I'll include that in the description for episodes. So that you can check it out and by the way it's. 

Like, hundreds searches per month for free, so I'm using it for free for myself. Pretty D*** helpful brought the CEO for public with sales kill on my podcast. 

So definitely recommend you that and follow dental device to reach out to people who you can get the warm intro to. So we're gonna wrap it up here have a great day. Everyone.