Monitoring Tactics and Key Metrics

Investors in startups need to know what is going on in the companies. They engage in monitoring activities to find out whether a portfolio company is developing well, it needs support or corrective action. However, monitoring is only possible if the startup provides relevant information. Monitoring requires regular reports from the entrepreneurs, because they are the ones who know how the startup is doing – at least they should know. A business report is the lens through which investors understand the progress. Monitoring by investors will succeed or fail based upon the quality of the reporting. This chapter will explore what characterizes good reporting, i.e. which key metrics investors need for effective and efficient monitoring and which qualitative information entrepreneurs should provide.