Lux Capital Partners with Standard Metrics

Lux Capital is a venture capital firm based in New York City and Silicon Valley with $5+ billion AUM, investing in emerging science and technology companies at the outermost edges of what’s possible.

The Lux portfolio includes category-leaders such as Anduril, Runway, Eikon Therapeutics, Hugging Face, and Databricks. Today the firm has more than 30 full-time professionals with a wide spectrum of technical backgrounds and over 200+ portfolio companies.

The Lux team sought a solution that would help offer a user friendly, customizable and interoperable solution for their front, middle, and back office teams.

“We’re thrilled to partner with Standard Metrics to streamline our portfolio monitoring process,” said Segolene Scarborough, Chief Financial Officer at Lux Capital. “After extensive platform demos, what stood out was their remarkable flexibility and robust feature set. Their hands-on customer support, combined with the platform’s ability to automate data collection, will significantly reduce the administrative burden on our portfolio companies while enhancing our internal monitoring capabilities.”

With the Standard Metrics platform, Lux Capital’s portfolio companies will be able to save time by replacing their current manual reporting process while offering new benchmarking insights and a source of truth when it comes to company performance.

Once implemented, the Lux Capital team will leverage Standard Metrics as their source of truth for KPIs and investment data, and to streamline their audit, LP reporting, and portfolio reviews.

“The optimism and technology-forward approach that Lux Capital brings to its investments is inspiring” said John Melas-Kyriazi, co-founder and CEO of Standard Metrics. “We’re honored to support Lux and their portfolio companies as they push the envelope of what’s possible and work to create a better future for all of us.”

About Lux Capital

Lux Capital is a venture capital firm investing in emerging science and technology at the outermost edges of what is possible. They partner with iconoclastic inventors who challenge the status quo and the laws of nature to bring their futuristic ideas to life. Over the past two decades, Lux has expanded from its New York City roots to Silicon Valley, and built a $5+ billion AUM firm of more than 30 full-time professionals, with a wide spectrum of technical backgrounds and the versatility to invest at any stage.

About Standard Metrics

Standard Metrics provides a collaboration platform for investors and their portfolio companies. VC firms such as General Catalyst, Salesforce Ventures, and Bessemer Venture Partners use Standard Metrics to collect financial and operational metrics from their portfolio companies. Data collection and structuring is automated. Standardized, auditable metrics are delivered to VC back office teams for easy analysis. On the company side of the platform, startup teams save time by structuring updates once and pushing them to multiple investors.

For Data Collective Venture Capital (“DCVC”), a firm that invests in technology sectors such as AI, robotics, and computational biology to address complex global challenges, having access to accurate and up-to-date investment data is crucial.

By eliminating manual workflows, reducing data entry pain points, and simplifying the migration of outdated contacts from a legacy tool, Standard Metrics has provided DCVC’s investment and finance teams with a centralized “source of truth” for portfolio metrics. This empowers them to confidently manage their data, saving time for what matters most: sourcing new opportunities and driving diligence work.

With Standard Metrics, DCVC is ready to collect data and benchmark portfolio company performance effortlessly, setting a new standard for how venture capital firms operate and report.

When we founded Standard Metrics in 2020, we set out to transform financial reporting for private investment firms and their portfolio companies. Over the past four years, we’ve brought on more than 100 investors as customers, including industry luminaries like General Catalyst, Salesforce Ventures, and Bessemer Venture Partners. Along the way, we’ve helped them to collaborate with more than 7,000 of their portfolio companies in a multitude of sectors, stages, and geographies.

The rapid growth of our user network is a testament to the trust and support of our community, along with a deep need that exists for tooling to fix broken investor relations. It’s a thrill to be building a product that supports so many firms and companies we admire.

We’ve reached a significant milestone in our journey, and we’re ready to unveil a new product that aligns with our mission to accelerate innovation in the private markets. One of our core goals has always been to develop unique products that leverage the data on our platform for the benefit of the community. With our network now at a meaningful scale, I’m delighted to announce the launch of our first data product: Global Benchmarking.

Global Benchmarking is a powerful new tool designed to give our users a deeper understanding of private company financial performance placed into current market context. We leverage aggregated and anonymized financial data from our platform to deliver timely and relevant market insights to our users. With benchmarks covering key metrics such as revenue growth rates, burn per FTE, and more, our users can gain valuable insights into their performance. For example, what’s the top quartile revenue growth rate right now for SaaS companies between $1-5M in annualized revenue? We can answer that question.

We have a strong perspective that companies need to control and benefit from how their data is used. Companies on Standard Metrics are notified about benchmarking during sign-up, and they can opt out of their data being used at any time in their settings page. Our experience so far is that the overwhelming majority of companies are excited to participate and receive quarterly scorecards to help them assess performance and inform future planning.

For our company-side users, Global Benchmarking insights are available for free. For investment firms, users can access a variety of benchmarking workflows as a paid add-on to their core subscription.

We launched Global Benchmarking quietly several months ago, and we are already seeing incredible early customer feedback. “Global Benchmarking brings powerful signal and context to what were previously individual analyses. By combining the right metrics with the right peer groups, Standard Metrics has reset the bar on creating a single source of truth, for both investors and portfolio companies,” said Joe Lonsdale, Managing Partner at 8VC.

Startups are finding Global Benchmarking indispensable for their financial planning and ongoing updates to their forecasts. “At Pave, we deeply believe in using benchmarks to make tough decisions with confidence. This is why we’re thrilled to have access to Standard Metrics’ benchmarks to ensure we’re optimizing for the right degrees of innovation vs. financial balance. Having trustworthy data is is vital” said Matt Schulman, founder and CEO of Pave.

We’re doubling down on Global Benchmarking, and we’re excited to roll out additional features and refinements in the coming months. You can expect deeper and more integrated workflows, a higher degree of configurability, and narrower and more powerful benchmarking categories as our data set grows and we unlock additional insights for our users.

If you’re an investment firm interested in exploring how Global Benchmarking can enhance your investment strategies, we would love to hear from you. For companies keen to take advantage of these new benchmarks, make sure to encourage your VC to connect with us. You’ll get the product for free once they buy it.

Thank you for being a part of our journey at Standard Metrics. You can find more details about Global Benchmarking here or by contacting our team below.

GreatPoint Ventures (“GPV”), founded in 2015, partners with entrepreneurs and management teams to build innovative businesses.

In order to provide the best guidance to its 60+ companies both the investment and operations teams spent valuable time emailing CEOs for metrics, searching through financial documents, and managing multiple versions of spreadsheets.

As its portfolio scaled, GreatPoint wanted to increase operational efficiency in order to maximize time available to support portfolio companies.

“We want to automate administrative work, and enable our investment team to stay focused on sourcing and closing deals and working with our portfolio companies. We additionally want our back office team to be able to quickly pull insights from our portfolio companies’ reporting” said Ashley Sommerschield, GreatPoint Ventures’ COO.

After careful consideration, GreatPoint selected Standard Metrics to automate the collection, analysis and reporting of portfolio data.

GreatPoint now expects to collect more meaningful data, faster. 

Bessemer Venture Partners selects Standard Metrics as its centralized platform for portfolio data

Bessemer Venture Partners backs entrepreneurs from the earliest stages, through IPO and beyond. In the last 50 years, the firm has been part of 145 IPOs. Its portfolio has included household names such as Pinterest, Shopify, Twilio, Yelp, and LinkedIn. Today the firm has 23 investing partners and 300 portfolio companies globally.

The Bessemer team sought a solution that would help improve operational efficiency by automating data collection and structuring, while also simplifying data sharing for its portfolio companies.  

“Standard Metrics’ SaaS solution has the ability to create a network effect that will reduce the burden on our portfolio companies who are structuring data across multiple investor requests. This is something that stood out to us about the platform,” said Augie Wilkinson, Director of Portfolio Monitoring and Analysis at Bessemer.

With the Standard Metrics platform, Bessemer’s portfolio companies will be able to structure updates once and push them to multiple investors.

Once implemented, the Bessemer team will leverage centralized, comparable portfolio data to deliver strategic insights that up the alpha in their existing investments.

“We are absolutely thrilled to be supporting Bessemer Venture Partners,” said John Melas-Kyriazi, co-founder and CEO of Standard Metrics. “We have always admired the way that Bessemer gives back to the technology community by sharing their investment insights and industry knowledge. We’re proud to become their source of truth for portfolio data.”

About Bessemer Venture Partners 

Bessemer Venture Partners helps entrepreneurs lay strong foundations to build and forge long-standing companies. With more than 145 IPOs and 300 portfolio companies in the enterprise, consumer and healthcare spaces, Bessemer supports founders and CEOs from their early days through every stage of growth. Bessemer’s global portfolio has included Pinterest, Shopify, Twilio, Yelp, LinkedIn, PagerDuty, DocuSign, Wix, Fiverr, and Toast and has $20 billion of assets under management. 

About Standard Metrics

Standard Metrics provides a collaboration platform for investors and their portfolio companies. VC firms such as General Catalyst, Salesforce Ventures, March Capital, and 8VC use Standard Metrics to collect financial and operational metrics from their portfolio companies. Data collection and structuring is automated. Standardized, auditable metrics are delivered to VC back office teams for easy analysis. On the company side of the platform, startup teams save time by structuring updates once and pushing them to multiple investors.

Our mission at Standard Metrics is to facilitate better data sharing and collaboration between stakeholders in the private capital markets. As this industry grows in sophistication and size, investment firms are increasingly building their own proprietary software and running analytics tools on top of data warehouses, just like the companies they invest in. We are excited to announce the launch of our API as we sprint toward a future of interoperable software and better data tools in the private markets.

Why build an API?

The private capital markets are rapidly becoming more globally competitive. Among other things, firms are adapting to competition by adopting multiple technology tools, utilizing their data to drive critical decisions. The search for best in class solutions across their stack is also creating tool sprawl and data siloes between those tools. As operational complexities increase, customers will stop adopting tools that cannot integrate into existing workflows. Software providers will need to adapt and enable connectivity to other systems. After all, the goal is to make the lives of customers easier, not harder.

At Standard Metrics, we do not want to be a walled garden, but instead a tool that can integrate with complementary technologies in the private markets ecosystem. In that spirit, we have been working with our most tech-forward customers to better understand how they use Standard Metrics data in other systems and offer them a better experience. These customer conversations led to us developing and launching our API.

What’s changed for our customers?

Previously, customers had been exporting data from our platform in a CSV format to then upload into various other tools. Now, firms can seamlessly integrate Standard Metrics data into their other systems and access metrics anywhere, whenever they need them, removing yet another recurring manual task and enabling greater accessibility to real-time data.

We already have customers pulling data from the Standard Metrics API into data warehouses like Snowflake for analysis as well as into proprietary in-house software systems. It’s exciting for us to watch new use cases unfold.

Next steps in our journey

Our work isn’t done here. We’re continuously working on enabling more real-time data sharing, no matter what systems are in place. Soon, firms will be able to automatically pull investment data from Standard Metrics to power valuation and fund performance analysis. Stay tuned for many more initiatives around our API and direct integrations.

We’d love to hear your feedback. If you’re an investor looking to improve your portfolio management and collaboration processes, contact us today to learn more about how you can benefit from using Standard Metrics.

Data security has been a core value to us from day one, especially in our industry where venture capital firms and portfolio companies collect and share extremely sensitive and confidential data on a daily basis. That’s why we are extremely happy to announce that Standard Metrics is now SOC 2 Type II compliant!

What is SOC 2 Type II?

Governed by the American Institute of Certified Public Accountants (AICPA), “System and Organization Controls” (SOC) is a framework to ensure a business is exercising best practices for maintaining data security. To obtain SOC 2 certification, a business must be audited by a third party (Coalfire Controls in our case) and prove that it has robust controls and processes that comply with SOC 2’s five “trust service principles”: security, availability, processing integrity, confidentiality, and privacy.

While Type I reports focus on a point in time, SOC 2 Type II reports evaluate a period of time to ensure that the systems are actually operationally effective and not just theoretically sound. We recently got our first Type II report to cover the audit period from Jan 16th to Apr 15th, 2022. Moving forward, we aim to renew our Type II report every year.

What does this mean for our clients?

We have always put confidentiality and security at the center of everything we do. From your perspective, nothing will change on the platform. Only now, you can comfortably know that our security is aligned with industry standards and best practices, as verified by an independent firm. As your firm expands, Standard Metrics will continue to be a trusted enterprise partner to support your portfolio monitoring operations.

TL;DR – We have raised a $23.7M Series A at Standard Metrics to scale our collaboration platform for financial data and operating metrics for the private markets. Our vision is to provide a lingua franca for every stakeholder in the innovation economy.

In 1901, the United States Congress founded an agency called the National Institute of Standards and Technology (NIST) with a mandate to spur innovation and industrial competitiveness by instituting common scientific and technological standards. Imagine the chaos that would ensue if different manufacturers disagreed on the definition of a meter or a kilogram, for example!

Today, much of the innovation and economic growth in our society is driven by the private capital markets, which now constitute over $5T in assets globally between venture capital and private equity (having at least tripled in size over the last decade). Ironically, the private markets operate with few standards and even less software. The lack of standards for what metrics matter and how information should be shared and discussed creates meaningful friction points at every layer of the innovation economy, from companies, to their investors, to their investors’ investors, and beyond.

Most venture capital and private equity firms operate out of Microsoft Office. There is no accepted standard for collecting and comparing portfolio company data like you would see from public company filings, and the manual workflows typically employed are painful, time-consuming, and inconsistent. The portfolio companies don’t have it any better — investor relations is becoming an emerging need as cap tables grow larger at earlier stages and companies are stuck managing their metrics and investors out of offline spreadsheets and email, a challenge we outlined in a previous post titled Broken Investor Relations. Finally, the limited partners of these funds are stuck pouring through various legacy data rooms full of PDF files to understand what’s happening with their fund-level investments. The SEC has even recently proposed rule changes to require standardized regular reporting on fund performance from private equity GPs to LPs for the first time.

As a group of former investors and operators, our team has experienced these problems first hand, and we have dedicated ourselves to solving them for the past two years. Today, we’re thrilled to share that our company — formerly known as Quaestor, now called Standard Metrics – has raised a $23.7M Series A from an amazing consortium of investors led by 8VC. Packy McCormick from Not Boring did a terrific write-up on our company’s strategy and round of financing, which you can find published here.

Our vision from day one at Standard Metrics has been to build a collaboration platform for financial data and business metrics, providing a lingua franca (common language) for every stakeholder in the innovation economy. We started by tackling some of the most frustrating manual workflows that exist around investor relations. We have assembled an ambitious team and built a network of dozens of venture capital firms, many of whom have now invested in our company, and over a thousand companies globally who are using our software to track the metrics and relationships that are most important to them. Standard Metrics’ automated portfolio monitoring product for venture capital firms and core investor relations tools for companies are the first steps in a long journey to build better infrastructure across this industry.

Standards matter. With the support of firms like 8VC, Spark Capital, Alpha Edison, January Capital, First Trust Capital Partners, Slack Fund, Fin VC, Socii Capital, Not Boring Capital, Gaingels, and many other fantastic funds and angels, we are building a critical mass of investors and customers who care deeply about how the private markets function and are coming together to build those standards for the first time.

If you’re interested in seeing how our software can help your firm or company, please visit our website standardmetrics.io.

And if you’re as passionate about this topic as we are, we’d love to hear from you. We’re hiring on all fronts (engineering, sales, customer success, product, etc.) and you can find all of our open job descriptions and ways of getting in touch here.

To our customers, investors, and supporters — thank you for your help so far on this journey. We have a lot to prove, and we look forward to serving you in the years to come.

Something is Better than Nothing

In the public markets, investor communication is driven by guidelines that are in place for regulatory reasons. Companies fall in line and adopt the cadence of quarterly earnings and annual meetings. They give their investors the information they’re entitled to, in a compliant manner, at the right time. While this leaves lots to be desired, there is at least a standard to adopt so chaos doesn’t ensue.

Despite having a much closer relationship with their investors, startups are left to their own devices when it comes to Investor Relations. While this might seem like white space, it quickly devolves into a vacuum that leaves both founders and investors disjointed. What begins as a promise of collaboration, too often fails to materialize.

Startups see Investor Relations as some combination of a time-sink, a low priority item, and a chore. These are understandable reactions to a flawed manual system of communication. The current paradigm fails all stakeholders yet persists because common sense says something is better than nothing.

And we end up here.

There’s a better way, and after spending years on both sides of the table, we deeply understand each side’s pain points and expectations. We’re working hands-on with early supporters at Quaestor to solve core workflow and communication challenges. We believe that integrations with key data sources will provide for a richer and more automated collaboration experience and a deeper, improved relationship between startups and investors.

What is Investor Relations for Startups?

The industry doesn’t have a standard for what bad, good, or great investor communication looks like. Investors don’t have a modern solution to understand the health and status of their portfolio companies at a granular or holistic level. Companies don’t have the proper tools and resources to effectively communicate with their investors.

The only real consensus around how startups should communicate with their investors is that there is no consensus.

“Entrepreneurs often spend an enormous amount of time raising and optimizing who is involved in a financing round. However too few founders tap into their investor and advisor pool sufficiently after all that hard work.”

While most would agree that investor communications are important, how to go about actually doing the communicating continues to be a perplexing question.

“Most investors eventually ask founders to send monthly email updates. These updates can seem like a tedious task, akin to your parents asking you to call them every week when you go to off to college. Since founders are busy and writing takes time, it’s tempting to skip updates and hope no one makes a fuss. Besides, monthly check-ins only benefit investors, right? Wrong. Almost every founder that I’ve talked to finds the act of writing updates valuable, often to their surprise.”

Far too much advice in the startup world is prescribed as if it’s the only solution to the problem. Rather than telling startups how they should communicate with their investors, we want to empower both companies and investors with software that makes the entire process easier. Before we can start asking questions of data, it needs to be organized and displayed accurately in a trusted and centralized location. What begins as dashboard quickly morphs into the control panel that powers the investor communication channel.

Ending “Let me know how I can be helpful?”

Despite investing in cutting-edge technologies and products across industries, most VCs continue to use dated software or cumbersome solutions built for private equity hoping that it can be adapted to fit their needs. We’ve experienced these inefficiencies first hand and believe there’s room to build a product with VCs in mind.

While simply having a centralized and consistent store of your entire portfolio’s data is a much-needed first step, we’re even more excited about what unique insights can be unlocked as a byproduct of being able to ask and answer new questions armed with this data. We’re still in the early innings, but we’ve started to see initial signs of adoption of this thinking in the ecosystem.

Investors spend hours trying to collect, organize, and synthesize disparate data points forcing them to mostly operate in a reactive mode. We view success as empowering investors to be proactive. We’ll enable this switch by giving them real-time visibility into the health of both their overall portfolio and individual companies. This way, they can deploy resources when needed rather than wondering where they can be helpful.

Founders should want to arm their investors with information that makes their relationship stronger and more effective, yet historically this has been yet another manual and time-consuming process to worry about. How a company communicates with their investors is critically important. It shouldn’t be outsourced or deprioritized, it should be improved. With the click of a button, founders will be able to share data that they deem important to the relevant stakeholders.

Software can remove so much of the friction associated with both understanding the health of your company and communicating those data points with your existing investors. More importantly, increased transparency allows for better communication allowing you to leverage your investors. After all, isn’t that what they’re there for?

The Future

We’re initially focused on startup founders and investors, yet we know that the ecosystem is broader than that. We’ll eventually connect the other nodes that make up the innovation economy’s vast network. Over the past decade, we’ve seen how easy it is for employees to be left in the dark for too long. Translating feedback from investors to share with employees shouldn’t be seen as a chore. While some information is sensitive, founders should be able to click a button and immediately update all relevant internal and external stakeholders. Giving founders software that empowers them to plan effectively and collaborate seamlessly with their investors is the first step of many when it comes to fixing Investor Relations for startups.

If this vision piques your interest, I’d love to connect and continue the conversation. You can find me here.