By leveraging Hockeystick's intuitive asset management technology, Plaza Ventures is optimizing critical elements of its back office operations.
Plaza Ventures is a venture capital firm that was founded in 2008 by a group of former entrepreneurs who wanted to help growth-stage technology companies scale faster.
Recognizing the need for sound, consistent data to track their portfolio’s growth, leaders at Plaza Ventures sought out a software platform that could automate their data collection and reporting process. Listen to Matthew Leibowitz, a Partner at Plaza Ventures, talk about how that search led them to Hockeystick.
Plaza Ventures provides between $500K to $3M in Series A and B funding to portfolio companies and has invested in over 20 companies, with prior angel participation in over 60 companies. With no plans to slow down, Plaza Ventures is committed to automation and believes that other venture capital firms should embrace this modern approach to portfolio data collection and reporting.
Hockeystick: Tell us a bit about Plaza Ventures.
Matthew Leibowitz, Partner at Plaza Ventures: Plaza Ventures is a growth-stage focused venture capital firm that was established in 2008. Our portfolio companies are typically B2B with $3M+ in revenue at the time of investment, and most of our LPs are entrepreneurs.
We’re known as value-added investors because we help solve problems, accelerate growth, and deliver liquid outcomes. Moreover, we often co-invest alongside an esteemed group of private angel investors and BDC Capital in a series of micro-funds.
Hockeystick: Plaza Ventures adopted Hockeystick early on. What was the key challenge that encouraged this?
Matthew: I’d say it was data consistency.
Quantitative portfolio analysis needs to be fed with sound data, but getting that right isn’t easy. Sourcing data in a consistent structure from multiple investments, spanning several years, is very challenging.
The importance of data consistency naturally depends on standardized, long-term data collection and we recognized that wasn’t achievable with manual tools.
Hockeystick: Did you try any other tools before Hockeystick?
Matthew: We tried using other solutions, but nothing worked. We moved from Excel to another third party platform and found that there was still a lot of manual labour involved. It was a huge time suck for us and for our portfolio companies.
What we liked about Hockeystick was its ability to automate and standardize data collection and reporting for us and our entrepreneurs — completely eliminating those pain points.
Hockeystick: Was security part of your decision criteria for a third party platform?
Matthew: Security was a primary concern when we started looking at platforms like Hockeystick and we thoroughly reviewed your security and reliability before committing to it.
Hockeystick: Plaza Ventures has a unique approach to portfolio reporting. Can you tell us about it?
Matthew: At Plaza, we set reporting expectations early on and have an open dialogue with our entrepreneurs about which metrics will be tracked, so everyone is on the same page. This also allows us to define KPIs with portfolio companies, which I think helps with governance, makes future financing rounds easier, and leads to more impactful datasets.
So, that means that we don’t have a one-size-fits-all KPI structure.
Implementing such a structure doesn’t lead to accurate portfolio monitoring and reporting. Ideally, you want to track whatever is driving value for the company, which will vary from one company to the next.
Just like portfolio diversification, the concept ought to be simple: Don’t put all your eggs in one KPI basket.
Hockeystick: What do you consider to be the most valuable portfolio KPI?
Matthew: One of the most important KPIs I consider is a company’s speed of adoption, or what I termed 'intra-company virality'.
Here’s an example.
Let’s say that you’re a software company selling to a large corporation. At the beginning of the POC, only 10 people are using your product. But, after 6-months, 100 people are using it. To me, that indicates widespread, sticky adoption.
From there, Plaza can drill down and gather additional data points — how long are users spending on your platform? What are they using it for? What are the forecasts?
You could say that the acceleration of startup growth is complemented by the increasingly sophisticated use of data in venture capital decision-making.
Hockeystick: Why do you think automated reporting is useful for your industry?
Matthew: Canada’s data on private equity and venture capital is relatively poor when you compare it to other countries. This is partially because of the private aspect, but there also hasn’t been a very robust effort to produce a thorough dataset on private capital deals in Canada.
With more funds turning towards automated data collection and reporting, I believe that our industry will be able to tell our story much better in terms of the impact we’re making.
At the VC level, automation allows houses to stop spending so much time requesting information from portfolio companies, chasing late filings, and cleaning and collating data. The time saved on these processes alone proves automation’s usefulness.
Hockeystick: Would you recommend Hockeystick to other venture capital firms?
Matthew: If they’re willing to commit to it then I would recommend Hockeystick to other firms. Hockeystick makes analysis and reporting more efficient, allowing funds to get more insights and value out of their data, while increasing the amount of time that they can spend supporting their portfolio companies.
This means lower costs, more revenue, and a better bottom line.
Hockeystick: What are your top recommendations for funds that want to implement a system like Hockeystick?
Matthew: You have to bite the bullet. Switching to a platform like Hockeystick will result in some effort up front, but it pays for itself in the long run.
During the initial onboarding, I challenge other funds to do an audit of their current portfolio reporting processes. Ask yourself, “what is the data telling me?”, “is there anything that I’m missing?”, and work through these questions with your portfolio companies.
If you allow it to, Hockeystick can completely overhaul and improve your data. But, it’s up to you to challenge your current practices to make it happen.