The Emerging Manager Investment Track Record

Your track record is a quantitative spreadsheet that details key financial metrics for your previous investments. If you have raised an institutional fund before, consider providing a complete view of that fund’s performance to date. If not, consider presenting financial metrics for attributable investments you made at your previous fund and/or financial metrics for your personal investment portfolio.

The way you display your track record may depend on its tenure and depth. A comprehensive track record might include the details below, broken out by company- and fund-level performance:

• Company name
• Entry investment stage / series
• Entry ownership (as a percentage)
• Current ownership (as a percentage)
• Entry valuation
• Current valuation
• Total capital invested (if more than initial investment)
• Multiple of invested capital (total capital invested / fair market value)
• A blended “fund” level (total view of all your investments together)

Your track record may also include the below elements, broken out by company- and fund-level performance.

Company-level metrics	Fund-level metrics
Entry investment data	Capital invested: Total amount of all capital invested within strategy
Realized capital (the amount of capital returned via a liquidity event)	Realized capital: Total amount of capital returned from all investments through liquidity events
Fair market value (FMV)	FMV: Total value of all capital invested at current (and exited) valuations
Internal rate of return (IRR)	Gross performance: FMV / capital invested
Exits (includes IPO, M&A and write-offs)	Net performance: Gross performance minus expenses and fees (if personal angel investments, use expenses and fee projection from current fundraise to estimate)
Company description
Geography
Sector
Attribution (name of the partner who led the investment)
Co-investors (depending on the stage and maturity of the investment, this can also be broken out into previous investors, co-investors and follow-on investors)

If you have invested across many years or multiple distinct verticals, you may want to create a “synthetic portfolio,” meaning that you artificially split your investments into a few separate “funds” by year or theme. SVB’s Daniel Dehrey says the synthetic portfolio view can be helpful for those with longer track records, especially when LPs look to benchmark your performance against other funds for each vintage or year.

If you are sharing both angel investments and institutional investments on behalf of a previous fund, consider splitting them into separate sections of your track record.

What matters most to LPs?

 

Above-market financial performance.
Consider referencing unbiased industry benchmark data for fund performance for your stage / sector and demonstrating that you outperform it consistently. The numbers aren’t everything, though. “If you have a deal that is only marked up by 2x, but the subsequent co-investors are highly respected, that can still tell a great story,” says Daniel Dehrey.

Ease of analysis.
LPs may take your information and put it into their own software or spreadsheets to cross-compare, so consider making that process as simple as possible. Some ways to do that could include avoiding PDFs and putting all the investment information in one document so they don’t have to hunt for it in multiple places.

Your conviction as an investor.
Angel investments may send different signals to LPs than prior investments on behalf of a fund. Neither is necessarily better, but each type of investment can tell a different story. “Angel investments may show your personal conviction and discipline, while investments on behalf of a partnership may signify your ability to persuade and rally others,” says Alex Marshall, director of limited partners for SVB’s Emerging Manager practice.

Attribution.
If you’re including investments from a previous fund, consider securing attribution letters from that fund. If not, consider using publicly available data to show your involvement (for example, your name in a press announcement or a Crunchbase link that shows your board seat) and including that founder in your reference list. If there are multiple partners for your current fund, consider clearly attributing each track-record investment across the partnership.

Indications of repeatability.
According to Winter Mead, CEO of Oper8er and author of this great article on track records, “The key point [of your track record] is that LPs are trying to understand how good of an investor you are, which includes understanding how good of a ‘picker’ you are, what role you played in making the investment and building confidence around whether you understand investment management and can repeat the process of finding and making great investments.”

On-thesis investments.
Whether your thesis is geographic-specific, vertically aligned or thematic, consider highlighting multiple investments you’ve made in the area you’re pitching. Consider including prior investments that do not fit the thesis as well, as long as you split them visually so LPs can easily differentiate.

Understanding of fund dynamics.
Even if your track record investments do not represent the size of check or ownership target, you’re seeking for the current fund, you can show that you understand those mechanics by outlining the follow-on strategy you would employ for this current fund or by including a note on how the strategy would shift future investment decisions.

Resources

Review two sample track record materials

• Sample Data Room by Sapphire Ventures

• Sharing Your Track Record as an Emerging VC by Winter Mead