casemark/tracking-portfolio-company-metrics

Tracking Portfolio Company Metrics

Monitors portfolio company KPIs including burn rate, runway, MRR growth, CAC/LTV, and cohort performance to assess company health, flag emerging risks, and support portfolio review preparation.

When To Use

• Preparing for quarterly or annual portfolio reviews with LPs
• Evaluating whether a portfolio company is on track between board meetings
• Deciding whether to participate in a follow-on round
• Triaging companies that may need operational support or bridge financing
• Building a standardized reporting cadence across a fund's portfolio

Inputs To Gather

• Monthly/quarterly financial reports from portfolio companies (P&L, balance sheet, cash flow)
• Revenue data: MRR/ARR, net new MRR, expansion vs. contraction, churn
• Cash position and burn: current cash balance, gross burn, net burn, last funding date and amount
• Customer/unit economics: CAC, LTV, LTV/CAC ratio, payback period, gross margin
• Growth indicators: revenue growth rate (MoM/QoQ), logo count, NDR (net dollar retention)
• Cohort data: retention curves by signup month, revenue per cohort over time
• Headcount and hiring plan: current FTEs, open roles, department breakdown
• Cap table and ownership data: current fund ownership percentage, dilution from subsequent rounds
• Company-provided narrative updates: product milestones, pipeline, key wins/losses

Workflow

1. Normalize reporting data — Align each company's financials to a common template (month-end periods, consistent revenue recognition). Flag companies with missing or late submissions.

2. Calculate core financial health metrics

   • Burn rate: gross burn (total monthly cash outflow) and net burn (gross burn minus revenue)
   • Runway: current cash / net burn = months remaining. Flag any company below 6 months runway as critical, below 12 months as watch-list.
   • Burn multiple: net burn / net new ARR. Healthy early-stage target is <2x; >3x warrants scrutiny.

3. Assess revenue trajectory

   • MRR/ARR and month-over-month growth rate. Compare against the company's own plan and against stage benchmarks (e.g., seed-stage SaaS: 15–20% MoM, Series A: 10–15% MoM). [VERIFY benchmarks against current market environment]
   • Net dollar retention (NDR): >120% strong, 100–120% adequate, <100% signals churn risk.
   • Break out expansion revenue vs. new logo revenue to understand growth composition.

4. Evaluate unit economics

   • CAC: total S&M spend / new customers acquired (blended) or by channel if data available.
   • LTV: (average revenue per account × gross margin) / monthly churn rate.
   • LTV/CAC ratio: target >3x for sustainable economics; <1.5x is a red flag.
   • Payback period: CAC / (monthly gross profit per customer). Target <18 months for SaaS.

5. Analyze cohort performance

   • Plot retention curves (logo and revenue) by monthly or quarterly signup cohort.
   • Identify whether recent cohorts retain better or worse than older ones — improving cohorts suggest product-market fit is strengthening.
   • Calculate revenue per cohort at 3, 6, and 12 months post-acquisition.

6. Score and tier portfolio companies

   • Assign a health rating (e.g., Green / Yellow / Red) based on composite of runway, growth rate, unit economics, and execution against plan.
   • Green: on plan, >12 months runway, healthy unit economics.
   • Yellow: behind plan on one dimension or runway 6–12 months.
   • Red: multiple metrics off-track, <6 months runway, or material execution failure.

7. Compile tracking report

   • One-page summary per company: health rating, key metrics table, trend arrows (improving/declining/flat), and 2–3 sentence narrative.
   • Portfolio-level rollup: aggregate fair value, TVPI/DPI progression, reserve allocation status, companies by tier.
   • Action items: follow-on decisions, board seat follow-ups, introductions needed, companies requiring triage calls.

Output

A structured Portfolio Tracking Report containing:

• Portfolio dashboard: summary table with each company's health tier, latest ARR, runway, growth rate, and ownership percentage
• Per-company detail sheets: metrics table, cohort charts, burn/runway projection, and narrative update
• Watch list: companies flagged Yellow or Red with specific risk factors and recommended next steps
• Reserve and follow-on analysis: which companies may need bridge capital, pro-rata allocation for upcoming rounds
• Trend analysis: quarter-over-quarter comparison showing which companies are accelerating vs. decelerating

Quality Checks

• Confirm all financial figures tie back to company-provided source data — no unverified estimates in final metrics
• Validate that runway calculations use the most recent month's net burn (not averages) unless explicitly noted
• Cross-check MRR figures against reported ARR (ARR = MRR × 12) for consistency
• Ensure LTV/CAC calculations use the same time period for both numerator and denominator
• Verify cohort data covers at least 3 complete cohorts before drawing retention conclusions
• Mark any metric derived from incomplete data with [VERIFY]
• Confirm ownership percentages reflect the latest cap table (post any recent rounds or conversions)
• Review health tier assignments against defined thresholds — no subjective overrides without documented rationale