Real Mission Critical Numbers

It's time for the next wave of VC partnership transparency. Here's what Valor is doing about it.

ValorVC is committed to leading our industry in VC partner transparency. To do that, we need mission critical numbers. They go far beyond the basic financials into equity ownership, diversity and inclusion, and risk.

Valor’s purpose is activating real-world innovation through financial discipline and entrepreneurial empowerment. We serve for returns-driven investors interested in transformational results. To serve our purpose, we’re diving deep into creating a systematic approach to risk, equity, diversity and inclusion in addition to the standard financial reporting strength you’d expect from a quality VC. One example is our work with the Long Term Stock Exchange. We’re helping to shape and provide feedback on their set of tools that  make it easier for founders and funders to visualize their:

  • Captable
  • Cap table equity by gender and race
  • Hiring diversity and inclusion practices by race and gender

(The photo at the head of this blog post is Marcus Gosling, VP Product at LTSE, and developer Pavitra Bhalla at LTSE, who recently hosted me in their SFO office for a product review.)

Venture capital is a shared risk model, but over time as the industry has matured, many of the largest partners (called LPs) have become increasingly disenfranchised from the mission-critical information that helps them manage risk and project returns.

Many of the largest limited partners are universities, retirement programs, foundations and nonprofit endowments. It’s time organizations like these were treated as full partners by the venture capital industry. At ValorVC, we’re committed to that.  We know an aligned, informed investing partnership is more competitive, more agile, and more opportunistic.

ValorVC is actively working to create a digital platform that supporters our partnership for building transformational, real-world innovation companies, from founders to funders. This will take time and is a committed, ongoing effort –not a “sprint” or a short-term project. On the journey, we’re compelled by these truths:

  • More symmetrical information can create more informed decisions.
  • Lack of cap table transparency/accessibility and diversity and inclusion numbers are diligence killers that often aren’t called out but linger in the background, harming valuations and the founder’s ability to convince quality capital to join their table.
  • Better identification of true outperformance earlier in the cycle—so less wasted capital and human energy. Diversity and inclusion on teams, including investor teams, are associated with higher performance metrics.

Ultimately, this means better and more efficient returns and opportunities for everyone involved.

We’re at ground zero of the next wave of financial accountability, transparency, and ultimately, performance.

It’s a privilege to help shape it and be at the front of the charge. Let us know if you have a tool, an approach or a platform we should know about as we continue to shape this effort.