Standard Metrics Drives a VC Digital Transformation

About TechNexus Venture Collaborative

TechNexus Venture Collaborative was founded in 2007 in Chicago as a first-of-its-kind Venture Collaborative. TechNexus empowers corporations to invest in early-stage companies and foster collaboration between the corporations and entrepreneurs. It serves as the intersection between corporate innovation and early-stage investing. TechNexus’ portfolio consists of over 150 companies and includes startups like Tonal, Harbinger Motors, Krisp AI and Scope AR.

The Problem

When we met the team in 2020, TechNexus was using multiple separate systems to manage its growing portfolio. Not only did this mean there was no single source of truth, but they also lacked a reliable way to proactively monitor company performance and health.

The TechNexus team was craving centralized data, which would help them provide better real-time support to portfolio companies and share timely data with their Corporate Partners (who serve as TechNexus’ Limited Partners). There was a growing internal sentiment that the team needed a more comprehensive solution that was easy to implement.

Starting Out: Building Relationships and Gathering Data

Ellie Davis, TechNexus’ Venture Impact Manager responsible for post-investment relations, began by focusing on fostering stronger relationships with portfolio companies and setting up a system to track key performance data.

The team’s initial efforts were simply centered on visiting companies and building trust so the Portfolio Companies would be comfortable sharing more data points than they previously provided. While efforts to build stronger relationships were successful, the data gathered was still inconsistent, and the team knew they needed a more effective solution in order to scale with their growing portfolio.

Finding a Better Approach

TechNexus sought a tool that was both practical and respectful of founders’ time. They needed a system that could streamline data collection without being intrusive or burdening their portfolio companies. According to TechNexus, “It felt like Standard Metrics was a system built with that in mind. We didn’t want to micromanage; we wanted to be better investors and offer more proactive support to our portfolio companies.”

The Solution: Standard Metrics Comes on Board

The implementation of Standard Metrics marked a turning point for TechNexus. The platform provided a centralized system for tracking both investment and portfolio data. This change brought about several key benefits:

• Streamlined Tech Stack: By integrating Standard Metrics, TechNexus was able to consolidate multiple systems into a single source of truth. This not only simplified their tech stack but also improved efficiency across portfolio management and reporting.
• Enhanced Portfolio Communication: TechNexus saw a significant increase in portfolio company engagement, with response rates rising from 25% to 70%. Additionally, there was a 2.5x increase in the amount of data individual companies were sending, all achieved with minimal onboarding effort.
• Improved Investment Decisions: With accurate, up-to-date data, TechNexus was able to make better-informed investment decisions. The centralized data enabled more proactive conversations with portfolio companies and facilitated deeper insights into their performance. Having a central source of truth for portfolio company data has also transformed the way TechNexus performs their diligence process.
• Strengthened Partner Reporting and Trust: The enhanced data visibility and reporting capabilities have significantly improved TechNexus’s ability to provide comprehensive updates to corporate partners (LPs), strengthening trust and fostering strong investor relationships.

The Result: Better Data, Better Relationships

Today, TechNexus manages over 150 portfolio companies and continues to benefit from the improved data and insights provided by Standard Metrics. As Ellie Davis reflects, “I don’t look at this as software; I look at it as an extension of my team.”

8VC is a venture capital firm founded in 2015 by Joe Lonsdale focused on investing in early stage technology companies that are transforming their respective industries. With over $3.6 billion under management, 8VC has invested in some of the fastest growing companies including Palantir, Wish, Oculus and Deliverr. 8VC’s investment thesis bleeds into its own firm’s operations where it leverages technology to optimize workflows, eliminate inefficiencies and improve communication.

The Problem

8VC has relied on legacy software to manage their investor relations. This has created numerous operational inefficiencies throughout the firm.

Manual and Time-consuming Information Collection

8VC employees spend over 50 hours per quarter sending out individual information requests to their 100+ portfolio companies. It can take over a month for these companies to gather this information and send it back to 8VC. Because of this, 8VC wastes more time chasing after information rather than doing what they do best: helping their portfolio companies grow and scale.

Inconsistent Data Sources

The data that 8VC receives is often inconsistent and unorganized. There are hundreds of spreadsheets, emails and pdfs spread over multiple different sources each with their own naming conventions, making this information extremely difficult to track. As a result, employees are spending hours scrambling to find data and relevant information where time-sensitivity makes a big impact.

Managing Portfolio Data at Scale

As 8VC continues to grow it becomes increasingly difficult to manage its portfolio companies and give them the individual attention they require. Staying on top of company data, conducting deep analysis and recalling information when required becomes a challenge. Without a proper system in place, it is not only hard to track portfolio progress, but also the own firms progress over time, which for 8VC is an integral part of their operations.

The Solution

Standard Metrics transformed 8VC’s operations by automating manual workflows and creating a centralized data platform in which 8VC could effectively manage and track their portfolio companies.

Automated Information Collection and Management

Instead of re-creating individual information requests each quarter, 8VC now uses templates to send out recurring requests to its portfolio companies. Standard Metrics automatically tracks their progress and follows up with companies on outstanding requests, saving 8VC the time and hassle of managing over +100 information requests. Furthermore, any documents submitted by the company are filed and stored within their respective dashboard. Automating these processes helped reduce time spent on information collection and management by 95%.

Data Centralization

Standard Metrics’ centralized dashboard makes financial documents easily accessible across the firm, eliminating the need to sift through spreadsheets to find a single metric. PDFs, emails and spreadsheets with different naming conventions are standardized so that files are easily searchable. By centralizing and standardizing financial data, Standard Metrics brings more transparency and clarity around portfolio company health and performance. This allows 8VC to gain a better understanding of their businesses and offer more relevant advice and help.

Building Scalable Infrastructure

More than automation and workflow optimization, Standard Metrics offers 8VC a system that grows with the firm. With all of their company, bank and firm data in one place, 8VC can fully grow and scale its operations without having to worry about how it will manage all its information. As the firm increases its portfolio size, 8VC can easily add company data, conduct deeper analysis and quickly retrieve information, and with access to historical financial data and institutional knowledge, it becomes easier to onboard new members as the firm grows.

Results

8VC’s switch to Standard Metrics transformed the venture firm’s operations by cutting out inefficiencies and enabling better data collection and visibility. The platform reduced time spent on data collection by 95%, allowing 8VC to focus more on monitoring portfolio progress and adding value to their companies. With Standard Metrics in place, 8VC can grow to its full potential with peace of mind that its system will scale with it.

Munich Re Ventures is the strategic venture capital arm of Munich Re, a global re-insurance and primary insurance provider. With three separate funds each with their own investment thesis and over $500M in available capital, Munich Re Ventures invests across industries including mobility, cybersecurity and IoT with a preference for series A and B. Their goal is not only to finance industry-changing startups, but to create synergies and strategic partnerships that allow both them and their portfolio companies to grow at scale, whether that means providing de-risking strategies or insurance capacity for startups.

Problem

For almost five years, Munich Re Ventures used a legacy solution for fund and portfolio management. While that tool offered basic portfolio monitoring capabilities, it did not provide the level of automation and real-time insight that Munich Re Ventures desired. As the firm grew its number of investments and multiplied its fund size tenfold, it needed a scalable platform that could not only support streamlined data collection but also provide actionable insights and tools for analysis.

Manual data collection

Munich Re collects different data points across its portfolio companies and sometimes across time periods as well. As a result, the firm resorted to collecting and aggregating this data by hand in Excel, which lead to inconsistencies in company reporting and a lack of standardization across the portfolio. The team wanted to find a way to increase compliance and gather data more consistently from their portfolio companies.

Limited analytics

Because of a lack of data, Munich Re Ventures had a difficult time tracking company performance. They had limited insight into key OKR’s and company metrics such as revenue, runway and burn rate. With over 30 investments to track, Munich Re Ventures needed a better way to visualize these metrics in real time to get a better understanding of company health.

Inefficient workflows

Given its portfolio complexity, MRV needed a tool that was self-service, so the team could quickly process data requests, add new portfolio companies, change inaccurate data points, and create custom reports on the fly. The firm wanted a platform that would enable them to take control of their data.

Solution

Munich Re Ventures transitioned to Standard Metrics when one of their portfolio companies expressed interest in switching over for reporting. The firm chose Standard Metrics to power their middle office workflows so they could focus on helping and building relationships with their portfolio companies. The centralized platform simplified and standardized reporting across Munich Re Ventures’ portfolio and allowed the firm to track and store company data all in one place.

Founder-friendly interface

Standard Metrics automated the company reporting process through the use of custom templates and integrations. Startups no longer needed to sift through spreadsheets, find the right metrics and share information over long email chains. Instead, they could quickly link their banking, accounting and HR metrics directly to Standard Metrics, saving them time and resources. On the firm side, Munich Re Ventures no longer needed to manually create a form each time they sent out a request and could store and manage all of their company data in one place. Standard Metrics eliminated the need to manually follow up with companies for missing information and would automatically update portfolio companies that had outstanding requests and inform firms when they were complete.

Smart portfolio insights

Munich Re Ventures centralized their portfolio and investment data across three different funds using Standard Metrics’s powerful portfolio analytics tool. This gave the firm the ability to look at fund performance over time and across sectors with simple and comprehensive data visualizations. Along with Standard Metrics’ unique portfolio insights, this gave the firm the ability to visualize company runway, revenue and burn rates all on one page. With the power of portfolio insights, Munich Re Ventures is able to analyze their portfolio with much more detail and granularity, helping them make more informed decisions on where, when and how to allocate capital.

Intuitive design

Standard Metrics eliminated the need for Munich Re Ventures to outsource simple requests, giving the firm full control of the platform’s functionality and data. The platform’s intuitive user interface made it easy to onboard Munich Re Ventures’ team and offered users the ability to create custom dashboards, run calculations and quickly edit metrics all by themselves.

Results

Munich Re Ventures transitioned to Standard Metrics in less than a month while Standard Metrics handled the entirety of the firms first quarter information requests with a 100% response rate from portfolio companies. Standard Metrics also onboarded 35 of Munich Re Venture’s portfolio companies onto the platform, parsing through over 1,000 documents and extracting five years of past company data. Since onboarding, Munich Re Ventures has been a key design and thought partner for Standard Metrics, working to solve more problems such as budgets vs. actuals. With Standard Metrics in place, Munich Re Ventures can operate with ease and efficiency and focus on building strategic partnerships with their portfolio companies.

The Problem

With over 40 portfolio companies, the team at January Capital kept finding themselves manually consolidating financial and operating metrics. This involved receiving metrics via emails, manually sending chasers, having back and forth conversations to reconcile historical metrics (particularly when spreadsheet formats changed), and extracting information into internal and external reporting templates.

Not only was it time inefficient and required many man hours to collect, review and transform the data (on a monthly or quarterly basis); but the data fidelity was also low, with data integrity being a major problem. Of course, these issues do not tend to go away — instead over time, they continue to compound and grow.

The Solution

Two years ago, realizing the unsustainability of this state, the team began a software selection process that would allow for a more automated process with appropriate data integrity and governance. Their “holy grail” was:

1. An interoperable system that could integrate into other systems they used; and

2. Was able to be deployed with minimal customization and with a short implementation period; but

3. Did not reduce the feature set it offered.

After speaking to 20 providers, the team finally came across Standard Metrics.

With Standard Metrics

Since the adoption of Standard Metrics, January Capital has managed to materially streamline and improve its data collection and portfolio monitoring process.

As a venture capital investor with minority ownership, January Capital needed a way to incentivize its portfolio companies to share more data, more often.

Designed for investment firms who do not just have 5–10 portfolio companies but a much greater number, Standard Metrics not only made it easier for portfolio companies to share data through pre-built integrations with accounting, payroll, and banking systems with robust permissioning controls, but also offered a powerful dashboard for portfolio companies to review their own data just as their investors would– rather than simply being a portal portfolio companies log onto to send data to an investor. Moreover, the platform allowed portfolio companies to share their data with not only January Capital, but all of their investors!

The January Capital team instead now focuses their time on interpreting the data and deriving insights. Importantly, Standard Metrics now provides a “single source of truth” that the entire business can access– all team members can see accurate, consistent data.

• 90% reduction in time spent on data collection and consolidation through Standard Metric’s direct integration offering with portfolio company banking, accounting, and payroll systems
• Significant improvement in team collaboration through a central source of truth for all historical data
• An increased ability to produce actionable analytics through comprehensive, consistent data

First a customer, then an investor

After becoming Standard Metrics customers in early 2021, the January Capital team doubled down on their conviction and became investors later within the same year.