#OpenLP: Virtual Annual Meetings are Here to Stay: Best Practices for Re-Imagining the AGM for our…


This post is by Sapphire Ventures from Sapphire Ventures Perspectives - Medium

#OpenLP: Virtual Annual Meetings are Here to Stay: Best Practices for Re-Imagining the AGM for our Remote World

by Laura Thompson, Sapphire Partners

This article first appeared on SapphireVentures.com on Sept. 4, 2020.

Love them or hate them, virtual annual meetings (AGMs) are here to stay for now. I for one am a huge fan of annual meetings and think they are one of the more valuable interactions between LPs and GPs. I believe they’re so important that last year I published this providing GPs with an LPs perspective on how to run a high-value AGM. I followed up with some initial tips as the world started to change in March with all of us sheltering in place.

Unfortunately, rather than being a temporary fix, it looks like AGMs will be held virtually for the foreseeable future. Given this shift, and my observations from numerous virtual annual meetings I have attended in the last couple months, I wanted to update our recommendations in advance of the Fall (now virtual) annual meeting season, and highlight how to adapt best practices from IRL to make the virtual format an asset, not a limitation.

My Advice for a Well-Run, Virtual AGM:

Before I begin, I want to note that there is no single recipe for success. The most successful AGMs are authentic to your culture and take the characteristics of your platform into consideration while providing your LPs with an engaging and informative experience. My advice breaks down into 3 different categories:

1. It’s (still) about the content —

At the end of the day, the main objective of an AGM is still about sharing information. LPs still want to know about the investments and any updates to the team and strategy, with a focus on information that cannot be gleaned from just reading quarterly reports or emailed communication. Since that generally includes topics such as segmenting the portfolio, sharing projections for funds’ ultimate returns, new investments or near-term liquidity, here are some considerations for handling those conversations in a virtual AGM:

  • Send decks in advance. That way you don’t need to read the material during the meeting and people can formulate questions in advance so the dialogue will (theoretically) be higher quality.
  • Don’t practice “Death by PowerPoint.” If you have slides, great, but don’t just project / talk to slides for multiple hours. You need to think of the virtual AGM as more of a broadcast. To keep the energy up, you need to switch content formats and speakers, and it’s always more engaging to look at humans than PowerPoint.
  • CEO presentations are still important; hearing the story directly is always the best. We have seen various formats including 5–10 minute, well-edited videos by CEOS, panels of CEOs, or short individual presentations followed by Q&A. I’ve always been impressed with LocalGlobe ‘s thoughtful approach to incorporating the community with a separate virtual day with short company presentations that also involves other investors and founders.
  • Don’t forget to discuss capital calls. One topic that LPs have been more interested in now more than historically is a rough capital call schedule (for the rest of the year). The stock market has gone back up to a high, but if the market shifts, it is helpful to have this information.
  • Zoom on the Offensive:
  • You might be able to reach more people virtually within an LP organization since meetings are not confined to people who can travel or fit in a specific venue. Think of expanding your audience as a potentially good investment so more of an LP’s team is familiar and up to speed for the next fundraising. If you’re comfortable with it, you can also invite perspective LPs to your virtual AGM. We’ve seen numerous GPs do this over the last few months and expanded their relationship with perspective LPs for future funds. Ourselves included.
  • Inserting some pre-recorded or higher-quality video segments can help maintain the energy and help with your transitions between topics. Don’t do the whole AGM pre-recorded though. If the whole thing is pre-recorded, why bother having the meeting? Don’t lose the “realness” and spontaneity that comes from a live event.
  • Breaking out smaller groups can actually be easier using Zoom. For example, you could use breakout groups with CEOs after their presentations so LPs can ask questions. Break-out rooms give the structure for smaller groups although if your LP base is small enough, you can just do it as a full group and let folks ask questions.

2. Be creative about interactions with your team and others in the “room” —

One of the biggest elements missing from in-person AGMs are all the unscripted interactions that take place around the meeting. This includes interactions within your team and with LPs, which provide LPs with opportunities to ask specific questions, and get to know your team better. Additionally, LPs lose the time with other LPs or attendees to network, share insights or discuss trends. To help bridge this interactions gap:

  • Make sure you have multiple team members speak, and highlight any changes in the team as LPs cannot “see” the room.
  • Zoom on the Offensive:
  • As mentioned, you can use the breakout feature to make smaller groups. Perhaps breakouts can replace the coffee and cocktail conversations. One successful approach we have seen at conferences that could be transferable is assigning attendees to breakouts with various partners to talk about the market or for general Q&A.
  • None of the AGMs I’ve been to have done this, but I think it would be awesome to create an interactive portion of an annual meeting to get LP’s feedback on the market. What are LPs seeing/doing? Europe sounds like it is back up and running so are European LPs having a different business travel/meeting experience then we are in the US? Would endowments share what they are thinking about for 2021? What about hospital systems? It would be great for everyone to benefit from the insights but perhaps just those interested could go to a LP Zoom break-out post the annual meeting?
  • It’s also easier to do surveys, hand raising and other interactive elements with virtual meetings. Take a moment to ask the audience about their views or perspectives on the environment or other topics.
  • If a meeting is too large, the LPAC serves as its own type of breakout. You can hold the LPAC on a separate zoom either before or after the annual meeting. They can pre-run the deck if using it before to see if folks have questions/comments or do it after to get feedback or additional market sentiment.

3. Virtual is a different beast. Design your day for the experience you want your audience to have.

  • Do the basics right. This isn’t just “another Zoom” and you should invest time into making sure you have a good tech foundation. Make sure to test your tech platform, have reliable wifi, and have a better webcam and mic set up than your laptop. At the same time, don’t worry too much about being perfect. Dropped coverage, slightly rocky speaker transitions or some type of technical issues may will happen. They are common and we are all human.
  • Choose the right event platform. In terms of how you deliver your AGM, LPs are comfortable with Zoom, and most if not all already have it set up, so that is an easy option but there are plenty of virtual meeting platforms out there if you want to develop a different experience.
  • Shorten the overall time of your AGM. It’s unlikely you want to sit straight for an 8-hour board meeting and it’s equally hard for an LP to be glued to a screen for that amount of time. We’ve found the ideal length of a virtual AGM is 2–3 hours. If you feel that you have a lot of essential content, you can break the meeting into two shorter sessions done on different days. Additionally, we would like to be there for the entire meeting, but the realities of sheltering in place can make it difficult. It is helpful to send a detailed agenda with a timeline (that you stick to) in advance to facilitate self-service of content.
  • Build in breaks. Even a shorter meeting could use some 5–10 minute bio breaks so that those of us with you don’t miss something important.
  • Take questions in multiple formats. Zoom can be hard for big groups to interact, and some people are shy or don’t want to ask a question when they don’t know who is “in the room.” For all of these reasons, it’s helpful to take questions both live and via chat.
  • Don’t forget to build memorable moments. Even when you have to host your AGM virtually, there’s still the opportunity to add small touches that will make your AGM more memorable. Do not feel like you have to send SWAG, but if there is something that you feel brings people together or makes the meeting feel more personal, by all means. T-shirts are always great but creative ideas could include cocktail kits or branded masks. We just had a couple GPs ask for our addresses and we are looking forward to what shows up in the mail.

We are all looking forward to being back together again in person at annual meetings. Between now and then we will all continue to live and learn the remote life and do the best we all can do. If you have other best practices from remote annual meetings to share, I’d love to hear from you . See you all in person as soon as we can.

Disclaimer:Nothing presented within this article is intended to constitute investment advice, and under no circumstances should any information provided herein be used or considered as an offer to sell or a solicitation of an offer to buy an interest in any investment fund managed by Sapphire Ventures, LLC (“Sapphire”). Information provided reflects Sapphires’’ views as of a time, whereby such views are subject to change at any point and Sapphire shall not be obligated to provide notice of any change. Nothing contained in this article may be relied upon as a guarantee or assurance as to the future success of any particular company. The content and views contained within this article represent those of the authors presented, which do not necessarily reflect the views of Sapphire. Such views are subject to change at any point and do not in any way represent official statements by Sapphire. While the authors have used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein, which is subject to change. Past performance is not indicative of future results.

Originally published at https://sapphireventures.com.


#OpenLP: Virtual Annual Meetings are Here to Stay: Best Practices for Re-Imagining the AGM for our… was originally published in Sapphire Ventures Perspectives on Medium, where people are continuing the conversation by highlighting and responding to this story.

Unpacking the Sumo Logic S-1 filing


This post is by Alex Wilhelm from Fundings & Exits – TechCrunch

Setting our dive into Palantir’s gross margins aside for another day, Sumo Logic filed to go public this morning. The Redwood City-based, former startup raised around $340 million while private, according to Crunchbase data.


The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


Sumo Logic parses information collected from its customers’ enterprise apps and integrations to help them pinpoint operational and security issues and lets them dashboard additional elements as they wish. The company claims in its S-1 that its code is “continuous intelligence,” which it brands as “a new category of software.”

Our own Ron Miller summarized Sumo Logic as a “cloud data analytics and log analysis company” when it raised a $110 million Series G last May. At the time, it was valued at north of $1 billion, making it a unicorn.

Sumo Logic’s IPO has been in its plans for some time. We can see this in a 2017 TechCrunch headline noting that Sumo had then raised $75 million, and was “on path” to a public offering. So, how healthy is the company, and what have its investors bought with about a third of a billion dollars in capital? Let’s find out.

Sumo Logic’s financial performance

Up top: Sumo Logic operates on a fiscal calendar that ends January 31 of each calendar year. This is super standard for SaaS companies as it allows the firm to not wrap its year during the holiday period. This is good for sales teams and so forth.

#OpenLP: The 4 P’s of Fundraising for Emerging Managers


This post is by Hillary Cook from Sapphire Ventures Perspectives - Medium

Raising capital as a first-time venture capital manager (or “VC”) is always challenging — primarily due to a lack of track record and performance coupled with not knowing or having access to prospective limited partners (those entities or individuals who invest in venture funds or “LPs”). This dichotomy can become more pronounced and exacerbated when capital becomes tighter, and events or other in person means for meeting people go virtual, further limiting access, for example, during the COVID-19 pandemic.

However, even a pandemic doesn’t stop all new managers from securing capital. Despite the fact that recent fundraising has been dominated by established funds, some capital is still directed to new managers who can prove their value and differentiate themselves to LPs. Looking back further in time, even when limited partner capital was scarce due to economic recessions, first time funds continued to be raised then too.Sapphire Partners engages with dozens of emerging managers every year, and those most successful in raising capital traditionally follow these four P’s of Fundraising.

1. Patience

Fundraising as a first-time manager almost always takes longer than you anticipate, and it’s likely to take even longer in a capital-constrained market, where you can’t meet LPs in person. Keep this in mind when speaking with LPs about your fundraising timeline, and with entrepreneurs about your ability to invest.

In general, we believe LPs move as slowly as they need to get excited about, and comfortable with a VC. Also, unlike a VC who has a certain time frame to deploy their capital into new portfolio companies, LPs do not typically have the same legal construct obligating them to make new VC relationships. Instead, LPs have the option to continue to invest their capital in their existing portfolio. As a result, fund managers need to have patience and focus on building relationships over a long period of time, anywhere from months to years. This process may be even longer for emerging managers and first-time funds who do not have a track record that helps LPs get excited.

We know that emerging managers are eager to start investing as soon as they can. However, since LPs are looking for a relationship that will last years if not decades, you should view the fundraising process as the dating period before jumping into marriage.

For LPs, it’s essential to build trust and understand the character of an emerging manager. Ideally, LPs like to see you in action — observe your strategy and how you perform over a period of time before investing. Further, when an LP invests in a fund they are mentally also assuming they will be with this VC for a number of funds. LPs look to make relationships with VCs that will last decades, this is also different from how a VC invests in a portfolio company. For that reason, LPs often prefer to get to know a VC across cycles. That’s one reason so many of your fundraising meetings may be relationship building rather than capital accumulating. That means you have to be patient, but also…

2. Persistence

As an emerging manager, be prepared to hear “no” a lot.

Unless you’re a manager coming from an established firm, with a strong, transferable track record, and a following of LPs waiting for you to break out and start your own fund, you will likely have dozens if not hundreds of LP meetings.

While hearing “no” all the time can be demoralizing, it’s important to recognize how small the LP world is. LPs talk to each other and run references as part of their diligence process. As an emerging manager, character references are one of the more concrete data points an LP can grasp given the lack of track record. But even if you get a “no” this time around, that does not mean it’s a “no” forever. You need to be persistent in building and maintaining those relationships as you develop your reputation. Find opportunities to remain top-of-mind for LPs and think of each touchpoint as building toward the next fund.

There will be a lot of passes and it will be psychologically discouraging, but you will find LPs become interested at some point in the future. Take advantage of these meetings and use them as an opportunity to receive constructive feedback. Every LP has different preferences and is looking for different attributes in a VC at different points in time. Or in other words, each LP you will speak to will most likely have their own portfolio construction and return objectives which could be very different from the next one with whom you speak. LPs just need to know that you fit their portfolio needs, which is when you need to be…

3. Persuasive

Being persuasive means refining your message to be absolutely convincing in the shortest period of time possible. After all, your years of relationship building may come down to a single 30-minute Zoom call that seals the deal with an LP. The market is overflowing with venture capital firms, and you need to clearly define what differentiates you and why this LP needs to use one of their few bets this year on you.

Your deck needs to be tight — concise and compelling. To minimize the amount of work that you have to do in LP meetings, do the legwork upfront. Make sure your deck is so comprehensive yet succinct that an LP can look over it and know who you are, what you’re going to do, your edge, and so on.

Do not waste precious meeting time going through items that are better read in a deck. Make sure all the most crucial points are conveyed in the deck.

Where you want to focus the meeting is your story, the way you pitch the LP, and the ensuing conversation. Present the right details at the right time and reference the supporting evidence in your deck. Manage the pitch to make sure you get through everything you need to. Here are a few things I will want to understand for the single VC starting a fund:

  • Your background and track record (or lack thereof)
  • Why you’re starting the firm
  • How are you qualified to manage and run your own fund?
  • How are you going to find your deal flow?
  • How are you going to win?
  • Why would an entrepreneur pick you?
  • What’s your edge over another GP?
  • What’s your approach to portfolio construction?
  • Are your aspirations and vision for the future great enough for me to be interested, but also grounded in executional potential?

If you’re a team of multiple venture investors coming together to form one VC, you’ll have a few more questions to answer, especially if you’ve never worked together:

  • Why did these people decide to come together to start this firm? How do they know each other? Can these people work together successfully for multiple funds in the future? What do each of them bring to the table?
  • Are they going to break up after this fund?
  • Is the team capable of seeing a fund through to liquidation?

Identify all the potential risks and find a way to mitigate them for LPs. Don’t have your potential LP sit there and wonder how they’re supposed to be comfortable with those issues.

All of this should be communicated in that short window of time, keeping in mind that all the traditional qualitative components of diligence — where a fund gets to know the partners and can see the dynamics of the partnership at play — are a bit more complicated in the current virtual environment.

References are even more crucial in times like this. Having a list of LP, VC, and founder references identified and ready to share will help tremendously. If you don’t have references or a track record, as many emerging managers don’t, focus on what you can control, such as your strategy and fund construction.

As you pitch, you’ll naturally become better at refining your message as you get feedback and practice. Focus your efforts on clearly articulating your strategy and differentiators.

Don’t be afraid to follow up with LPs and try to move things forward, but don’t forget that LPs move at our own pace. You want to be persistent but not pushy, and ultimately, you’ll need to be…

4. Pragmatic

Your approach to fundraising and your differentiators need to be pragmatic.

For first-time managers, LPs might want to write smaller checks to reduce their risk. Take the money — the first fund is hardest to raise and LPs tend to be more loyal to existing managers. You want to take that first step, even if it’s not as large of a step as you were hoping.

You also need to know when to call a fundraise “done,” have a first close and start investing. Know what your ‘minimum viable fund size’ is to execute your investing strategy and when you hit it — go for it. As an emerging manager, your reputation won’t be made during fundraising, it’s made with investments, and you want to start doing that as soon as you can.

Finally, remember that your fund size should be contingent on your strategy, and based on fund math rather than vague ambition. Demonstrate that you’re not just picking $100 million as your fund size because it sounds great. Showcase the math behind why, and how, you arrived at the number. Simply put: X# of companies with X% ownership to produce $X return.

Applying the Four P’s

The current environment has accelerated a number of trends that could make it more challenging for emerging managers to fundraise. Realistically though, the fundamentals of which LPs will invest in shouldn’t change too drastically. We don’t expect VCs to have a crystal ball that sees into the future, which is why we want to be comfortable and excited about your approach, team and differentiation. Being Patient, Persistent, Persuasive and Pragmatic will help you convince LPs to come on this journey with you.

Best of luck.

Originally published at https://sapphireventures.com.


#OpenLP: The 4 P’s of Fundraising for Emerging Managers was originally published in Sapphire Ventures Perspectives on Medium, where people are continuing the conversation by highlighting and responding to this story.

How to Build a Prospect Risk Assessment Model for Q2 and Beyond | Sapphire Ventures


This post is by Rico Mallozzi from Sapphire Ventures Perspectives - Medium

In our recent post on ways B2B companies can build revenue resiliency, we wrote about the importance of rigorously assessing the risk of your current and potential customers based on the recent shocks they are experiencing. What makes this economic disruption and the impact it is having on businesses unlike any other is the uneven and global effect it is having on companies. In some instances, companies are experiencing a tailwind from these events and as a result have seen a surge in demand for their product or service, while many others are facing detrimental headwinds.

Many of our portfolio companies are in the process of assessing existing customer and prospect risk — something they’ve been doing since the onset of the pandemic, but has now become much more difficult because of it. With the new quarter upon us, we know many CROs and sales leaders are once again taking a look at the next three months and are mapping out how best to navigate what’s ahead.

That’s why the Portfolio Growth team at Sapphire Ventures pulled together the Prospect Risk Assessment Model. This model is a framework for CROs and sales teams to leverage so that they can better measure and understand how potential customers are being affected by the crisis. By utilizing the following framework, which looks at four key factors, teams can adjust their GTM motions across a continuum of potential changes for each prospect rather than making a binary choice that will be less effective:

  • Location: Evaluate how your prospect has been impacted by COVID-19 based on their geographic location.
  • Size of Business: A prospect’s size (via employee count and/or revenue) is a relevant indicator of financial strength and how IT budgets may be impacted by COVID-19.
  • Industry: COVID-19 has created a wide range of business impacts across industries and sub-industries. As we know, some are being hit more than others.
  • Solution Relevance: COVID-19 is causing businesses and IT organizations to look for technologies to solve time-sensitive pain points.

View the Risk Assessment Model Here:

https://www.slideshare.net/RicoMallozzi/sapphire-ventures-prospect-assessment-model

Our hope is that this framework provides a model that you as a CRO or sales leader can use to understand how this disruption may impact your business relationships, sales discussions and commercial opportunities. We believe that those that respond quickly with tailored GTM motions will be able to continue to strengthen their relationships with prospects, preserve ARR and identify new revenue opportunities.

Disclaimer: Nothing presented herein is intended to constitute investment advice, and under no circumstances should any information provided herein be used or considered as an offer to sell or a solicitation of an offer to buy an interest in any investment fund managed by Sapphire Ventures. Information provided reflects Sapphire Ventures’ views as of a particular point time. Such views are subject to change at any point and Sapphire Ventures shall not be obligated to provide notice of any change. Sapphire Ventures does not solicit or make its services available to the public and none of the funds are currently open to new investors. Past performance is not indicative of future performance.

Originally published at https://sapphireventures.com.


How to Build a Prospect Risk Assessment Model for Q2 and Beyond | Sapphire Ventures was originally published in Sapphire Ventures Perspectives on Medium, where people are continuing the conversation by highlighting and responding to this story.

The VC Fundraising Environment and COVID-19


This post is curated by Keith Teare. It was written by Elizabeth“Beezer”Clarkson. The original is [linked here]

It’s only Tuesday morning and already it’s been a tough week and while it’s too early to know exactly how #COVID19 will impact the #VC fundraising environment. All of us at Sapphire Partners are getting questions from folks on our perspective, including being sent this article in Trusted Insight on the environment #endowments might be finding themselves given the current market crisis.

Here is my perspective: it feels like a slow down and potentially triage as LPs reconcile their situations is more likely than not, unfortunately. As tough as this might be, it is prudent for GPs to think about this now and not assume that all sources of capital will be there now or post crisis. In the meantime, I suggest GPs:

  1. Talk to your portfolio and see where they are, how you can help. Make sure they’re thinking about burn rates and contingencies.
  2. Re-visit your reserve math and portfolio construction. Your portfolio is likely going to need help, and you’ll want to support them and make new investments.
  3. Reach out to your LPs. We’ve had multiple of our GPs send us notes with how they are doing personally, as a firm and how their portfolio is doing. We love this and so appreciate them taking the time.
  4. Consider doing a Zoom update call with your LPs. We’re all #WFH, and a little visual check in can be a nice way to feel connected and provide for expedient many-to-many communication. Let your LPs know if they can help, or just share a virtual #quarantini: https://thenovicechefblog.com/quarantini/
  5. Ask your LPs how they are doing as people. And while it might be too soon — it could also be worth asking if the current environment has impacted any of their investment considerations going forward in the near term. It’s better to start the conversation now.

#COVID19 is unprecedented, and it’s going to take time for us to sort out the impacts. In the meantime, any other suggestions from GPs on how to engage your LPs right now?

#openLP #venturecapital #fundraising #vc


The VC Fundraising Environment and COVID-19 was originally published in Sapphire Ventures Perspectives on Medium, where people are continuing the conversation by highlighting and responding to this story.

The VC Fundraising Environment and COVID-19


This post is by Elizabeth“Beezer”Clarkson from Sapphire Ventures Perspectives - Medium

It’s only Tuesday morning and already it’s been a tough week and while it’s too early to know exactly how #COVID19 will impact the #VC fundraising environment. All of us at Sapphire Partners are getting questions from folks on our perspective, including being sent this article in Trusted Insight on the environment #endowments might be finding themselves given the current market crisis.

Here is my perspective: it feels like a slow down and potentially triage as LPs reconcile their situations is more likely than not, unfortunately. As tough as this might be, it is prudent for GPs to think about this now and not assume that all sources of capital will be there now or post crisis. In the meantime, I suggest GPs:

  1. Talk to your portfolio and see where they are, how you can help. Make sure they’re thinking about burn rates and contingencies.
  2. Re-visit your reserve math and portfolio construction. Your portfolio is likely going to need help, and you’ll want to support them and make new investments.
  3. Reach out to your LPs. We’ve had multiple of our GPs send us notes with how they are doing personally, as a firm and how their portfolio is doing. We love this and so appreciate them taking the time.
  4. Consider doing a Zoom update call with your LPs. We’re all #WFH, and a little visual check in can be a nice way to feel connected and provide for expedient many-to-many communication. Let your LPs know if they can help, or just share a virtual #quarantini: https://thenovicechefblog.com/quarantini/
  5. Ask your LPs how they are doing as people. And while it might be too soon — it could also be worth asking if the current environment has impacted any of their investment considerations going forward in the near term. It’s better to start the conversation now.

#COVID19 is unprecedented, and it’s going to take time for us to sort out the impacts. In the meantime, any other suggestions from GPs on how to engage your LPs right now?

#openLP #venturecapital #fundraising #vc


The VC Fundraising Environment and COVID-19 was originally published in Sapphire Ventures Perspectives on Medium, where people are continuing the conversation by highlighting and responding to this story.

Where top VCs are investing in open source and dev tools (Part 2 of 2)


This post is curated by Keith Teare. It was written by Arman Tabatabai. The original is [linked here]

In part two of a survey that asks top VCs about exciting opportunities in open source and dev tools, we dig into responses from 10 leading open-source-focused investors at firms that span early to growth stage across software-specific firms, corporate venture arms and prominent generalist firms.

In the conclusion to our survey, we’ll hear from:

These responses have been edited for clarity and length.