4 Lessons in Investor Reporting
Delivering strong reporting to your investors builds the overall board’s confidence in your business. And in this market, the need for board confidence has never been more relevant. But reporting can take up huge amounts of time and distract focus from the day-to-day, so what’s the right balance?
We asked a panel of experts how they define impactful investor reporting and what they do to engage boards to get the most from their board meetings. Collectively, Barbra Gago, CEO & Founder at Pando, Keith Wallington, Investor & Chairperson, and David Fitzgerald, FP&A Lead at Teamwork, have participated in over 370 board meetings. They shared their first-hand experience of preparing reports that will get even the toughest hardliners in your corner.
4 takeaways from 370+ board meetings:
The Definition of a Successful Board Meeting Has Changed
The fundamental objective of a board meeting is to allow your investors to track their investments. Traditional board reporting has been centered around this. However, Investor and Chairperson Keith Wallington says that nowadays the traditional approach to investor reporting is table stakes.
Nowadays your board should be a high-performing team, like any other team in the organization. High-performing teams need high-quality information to understand what’s going on so that they can develop strong, strategic, and operational outcomes. – Keith Wallington
To set yourself and the board up to have a successful conversation; communicate clearly and in advance, focus on the key priorities in the business, and present both quantitative and qualitative data.
Your executives should be a part of these conversations more often. It’s the executives that often have the answers to the questions the board is asking. – Barbra Gago
Tell the Board What You’re Optimizing For
As your startup grows, you’ll be focused on fundamentally different things. At the product-market fit stage, you’re not going to have piles of data. Whereas once you’re focussed on scaling, segmenting your data will tell a clearer story.
There’s nothing more devastating than watching a seed stage startup being almost forced by its new investor to report like it’s five years older. So be very clear on what you’re optimizing for. Get consensus with your board. What are the key questions we’re trying to answer? And then agree what the lead and lag metrics are around those things. And don’t let them push you later stage than you really are. – Keith
Reporting in the Early Phases Of Growth
Barbra Gago of Pando, who raised a $7m round in early 2021, starts board reporting with a simple statement on whether the business is default dead or alive.
I report on if I’m default dead or alive. It basically means, based on the money that we have in the bank, our growth rate, and our burn, will we make it to profitability before needing to raise money? – Barbra
She then provides standard and consistent reporting covering:
- Annual Run Rate (ARR)
- Monthly growth rate
- Number of customers
- Annual contract value size
- Cash flow
- Qualitative key insights
Reporting in the Scaling Phase
In contrast, Dave Fitzgerald of Teamwork, which raised a $70m round after bootstrapping to $30m ARR, focuses more on providing context behind the overall trends they see in their metrics.
Now, we’re way less focus on the actual metrics that are on the pages, but on what we’re learning about our business and how we can start to move those metrics in a particular way. – David Fitzgerald
As they scale up their sales motion, Teamwork is optimizing for efficiency and conversions, particularly around product activation and product-qualified leads. Their board reporting highlights key metrics around the attainment of quota. And they look at overall sales and marketing efficiency metrics like LTV/CAC.
Net Dollar Retention (NDR) is a big metric we’re always looking at. I just love the NDR metric and picking it apart to try and figure out where we have market fit and where we don’t, and how our pricing and packaging is coming together. – Dave
Segmentation is another perspective Dave wants to add to Teamwork’s board reporting in the future. In SaaS, segmentation may seem like a basic analytics practice, but it’s actually a critical part of your growth strategy. It’s the difference between answering questions like “what’s our churn rate this month?” And “what’s the churn rate of customers who are on the growth plan?” Both of those questions can be useful to a SaaS business, but the second one is significantly more actionable.
Those insights might well inform go-to-market. Sometimes it informs user experience and user interface design. I think once there’s enough data, it’s fascinating. – Keith
Reporting Doesn’t Need to Wait for the Board Room
Founders don’t always like board meetings.
They find that they’re just reporting to a bunch of people that have written some checks. And they thank them for those checks, but they’re not getting much value back. They find board meetings unnecessarily anxiety-inducing. – Keith
However, it doesn’t need to be that way. Treating your board as partners in your success is key to making sure you’re working together to drive the company’s growth. And that means working together outside of quarterly board meetings.
Both Teamwork and Pando are in constant contact with their board members via email, phone, and WhatsApp. This may seem like a significant time investment, but Keith argues that it should be the opposite.
[You should spend] zero additional effort on board reporting. Why should you be reporting differently to them as you are to your organization? That should save a pile of time. – Keith
Your Employees Are Your Shadow Board
At Pando, reporting is very transparent. Reporting on metrics and overall progress is something that is used to align the entire team. It is baked into the company updates at their town hall meetings.
What we report to the board is what everybody at the company knows and has access to knowing. These days, you’ve heard these stories of, the company’s doing so well… And then, oh, never mind, we’re closing… everybody’s fired. People want to know the health of the business and how it’s operating and they want the validation from metrics that the leadership is making the right decisions. -Barbra
Transparency around your metrics and the overall health of your business offers internal accountability. It allows for a culture of data-informed decision-making. Additionally, it gives people opportunities to contribute independently of their seniority or role at the company.
The more context the team has, the more empowered they feel. – Keith
Imagine that your business needs to shift from a significant go-to-market investment to a product and engineering investment. A shift like that can cause a lot of misunderstanding and fear internally. But if people in the company understand the context, they’ll understand why the business is making those trade-offs. Especially with distributed teams, transparency is key in order for the team to know what’s going on, and why decisions are being made.
Thank you to our panelists
Barbra Gago, CEO & Founder, Pando
After leading Miro through their rebrand and into hypergrowth, and bringing Greenhouse to market, Barbra launched her first company, Pando, in 2020. Pando is designed to empower startups to run continuous, on-demand, and structured career paths for employees. The company was born out of Barbras’s frustration over the black box of employee progression. After raising a $6.9m round in May 2022, Barbra knows what investors are looking for in reporting, and how to get the most from the board.
Keith Wallington, Investor & Chairperson
Keith is currently an investor and board member at five startups. He is focused on B2B SaaS and is typically investing at Series A and Growth stages. He’s got a background in C-level roles spanning marketing to operations. He has had a first-row seat to hyper-growth at Mimecast and continues to advise startup founders and CEOs as they navigate this journey. Keith shared his perspective on what executive teams, as well as venture and private equity investors, need from reporting.
David Fitzgerald, FP&A Lead, Teamwork
Running financial planning and analysis at work management platform, Teamwork, David has been a part of the journey that saw them bootstrap to over $30m in ARR. Prior to this, he led finance at another SaaS business that was acquired and has spent many years working in investment banking. He has first-hand experience preparing and running investor reports and board meetings. David has a strong handle on how to engage the board.
