Identifying the Hot Startups in a VC’s Portfolio – Introducing the Portfolio Momentum Dashboard

“Can you tell me which startups are hot in a VC’s portfolio?”

While the word “hot” may be replaced by the term ‘outperforming’ or ‘trending’ or ‘growing fastest’, it’s been a frequent question from CB Insights’ clients.  Today, we’re happy to release our Portfolio Momentum Dashboard to help answer that question. Below is an excerpt of the Portfolio Momentum Dashboard (PMD) for Sequoia Capital.

We walk through the dashboard layout, how you can filter/identify relevant portfolio winners, and our future plans for this data below.

Portfolio Momentum Dashboard Layout

The Portfolio Momentum Dashboard looks at three critical dimensions that individually and collectively allow clients to assess the health and momentum of a portfolio company.

• Financing health – This dimension looks at how much the company has raised, when it last raised and how much it raised in that particular round.  Very crudely, a company running out of money or having difficulty raising money is not a healthy company.

• Industry health – Is the industry in which the company competes growing? Analyzing funding and exit activity in a space provides us with data that we are using to provide an algorithmic view into the health of an industry in which a company competes. By way of example, we’ve found (perhaps unsurprisingly) that companies in a hot industry (think payments or cybersecurity) are helped by the positive industry sentiment and general zeitgeist around the space. Yes – a rising tide lifts all ships. An industry which is healthy helps companies attract customers, talent, financing, and press among other things.  Conversely, being in the daily deals space now means a company, irrespective of its own performance, will find itself swimming upstream as sentiment on the space is negative.

• Performance metrics health – Finally, company specific performance metrics are analyzed to highlight the near-term momentum of the company on several performance dimensions. These metrics include hiring, web traffic, mobile app performance (if applicable), and news chatter among others. New performance metrics such as notable HR hires or executive departures or an increase/decrease in partner and customer signings are being added as well.

With the three health dimensions above, clients have a holistic view of an individual company’s momentum. They can also identify the emerging winners in an investor’s portfolio.

1. Is the company financially solid? CHECK.
2. Is the company in an industry showing momentum? CHECK
3. Are company-specific metrics showing an upward trend? CHECK

Clients, of course, may weight the importance of these factors differently based on their own priorities, but it is important to provide all three for them to make this determination.

Identifying Relevant Portfolio Winners

Given that some investor portfolios contain hundreds of companies, it was important to enable filtering of the portfolio based on criteria relevant to you – the client.  For example, let’s say you want companies who raised less than $10M of funding in a financing round in the last year.

The graphs at the top of the dashboard are interactive and enable this as can be seen below.  You just select your areas of focus on the graphs and the relevant companies on the dashboard are displayed.

Where is the Portfolio Momentum Dashboard Going?

There are two directions we’re going with the PMD.

• Integrate other performance metrics into PMD – The more data we can provide to give you a sense for a company’s and portfolio’s momentum, the better decisions you can make. In the coming weekends, executive and founding team hiring and departures and partner/customer signings along with several other performance metrics will be added to the PMD.  We’re also adding algorithmic data from our Investor Mosaic models, so financing health also implicitly considers the quality of an investor in a fund.

• Enable users to create their own portfolios – If you want to create a portfolio of payments companies or Silicon Valley seed investments so you can compare and evaluate them against one another to help you figure out who to sell to, invest in, acquire, buy from, etc., you’ll be able to do that as we extend the PMD technology we’ve built.  A portfolio is ultimately a collection of companies and so clients being able to create their own collections (aka portfolios) is coming soon.

If you’ve got feedback  or ideas on how you’d like to see the Portfolio Momentum Dashboard evolve or have questions on how it works, please email us at product@cbinsights.com or leave us a comment below.