Investor Reporting Best Practices for SaaS (According to Experts)

Why investor reporting is important

While one of the primary reasons behind holding board meetings is to allow your investors to understand where the company is at, it’s also a way to develop strong tactical and valuable outcomes.

When your investors know the inner details of the business, alongside contextual information, they can support you in the best way possible. Besides, they’ve likely been in the position of seeing a startup grow to meet its goals before, so you could use investor reporting as a way to guide the business forward.

The fundamental objective of a board meeting is to allow your investors to track their investments. Traditional board reporting has been centred 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 to develop strong, strategic, and operational outcomes.

Keith Wallington

9 Investment reporting best practices

The metrics and qualitative information you choose to report on will depend on what stage you’re at in the journey and will likely be tailored to the priorities of your investors and business goals.

But, here are some reporting best practices according to the experts in our panel.

Communicate in advance

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

Staying consistent with the metrics you report on is important as this will allow investors to see month-over-month growth or areas of concern. This will make the preparation of the meeting more straightforward too, as you know you need to report the same items each time.

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 to a later stage than you really are.

Keith Wallington

Keep reporting simple 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? It’s a good measure just for everyone to understand the general state of the business.

Barbra Gago

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

Provide context behind trends

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 focused 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.

David Fitzgerald

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 Wallington

Reporting doesn’t need to wait for the boardroom

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 Wallington

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 Wallington

Be transparent

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 Gago

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 Wallington

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.

Focus on your key metrics

With many metrics available to track and share, you shouldn’t try to do everything in your SaaS investor reporting approach.

Different businesses are focused on fundamentally different things at any given time so I think it’s about really understanding what the business is optimizing for now 

What are the questions we’re trying to solve now?

Keith Wallington

Once you know this, share the most valuable metrics with your shareholder audience and use them to stimulate debate across the executive team and board.

Be very aware of what you’re optimizing for and try and focus in on those things on top of a pretty generic underlying board pack of standard consistent reporting

Keith Wallington

Aside from the metrics that matter most to you, you should always include details around new expansion, contraction, and churn.

Investor reporting should go beyond the board meeting

While a board meeting is a perfect time to address everyone all together and keep key people up to date, there are times when you’ll need to report to investors outside of this timeframe.

Having open two-way communication ensures investors feel involved at all times. 

Regardless of the method you choose, having micro touch points is a good way to build rapport.

I have an email list and I just send monthly updates. I also send updates in WhatsApp or by text, you know just some quick stats if someone’s asking. 

Usually, I just have a simple email that’s structured in the same way that goes out every month.

Barbra Gago

Actively implement feedback from investors

An investor reporting meeting shouldn’t just feel like the exchange of data, but you should come away from it with fresh ideas or an understanding that you’re taking the right approach.

The following week, at the executive leadership team meeting, we will spend some time just going through what the high-level conversation was, if there was anything that came out of it that people need to be aware of.

And then, if there’s minor tweaks or you know changes to format we can just get them done or put them out into the team to make sure it gets fed back into the next cycle.

If they’re larger items they’ll typically fall into our planning processes anyway.

David Fitzgerald

The information shared at board meetings and the following feedback can be discussed in company updates or conversations with the team. Keeping everyone in the loop is a good way to keep the business accountable.

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.