A tear sheet, also known as a fact sheet, is a one-page document that contains key financial information about a company, including an overview of leadership and services. The name comes from an old practice where stockbrokers would tear a sheet out of their summary books to give to investors as a stock recommendation.
Venture capitalists create tear sheets about each of their portfolio companies and send them to their limited partners (LPs) on a quarterly or monthly basis to help them understand investment performance.
How to make a tear sheet
LPs want a tear sheet with basic information to help them run scenarios and figure out what the top deals are. The easiest way to get started is to build from an example or to use a tear sheet template.
Tear sheet example
We’ve created an example of a tear sheet you can download to give you a sense of what LPs expect.
Carta’s tear sheet example includes:
- An overview of the company
- Executive team
- History of investments
- Financials (revenue, cash burn, etc.)
- A section for your own commentary
Download an example tear sheet
Keep in mind that you don’t need every field we’ve included. In fact, you may want to pare down the information in the beginning and add more over time. If you’re a Carta fund administration client who subscribes to our Portfolio Insights feature, we’ll create customized quarterly tear sheets for your investments.
Tear sheet tips from Lightspeed Venture Partners
We talked to Catherine Chen, a partner at Lightspeed Venture Partners, to get advice for putting together a tear sheet.
Make it scale
Chen says it’s important to make sure your tear sheets are scalable. (Remember: you’ll have to create one tear sheet about each of your portfolio companies every month or quarter, which takes time.) “You don’t want to have to manually enter everything,” she explains.
To save time, Chen recommends starting small. Begin by offering the basic data you think your LPs want to see. “You don’t want to start with open floodgates that give them too much information upfront,” she says.
Finally, gather feedback from your LPs and make the necessary changes. “It’s easier to add later on than it is to delete.” Chen says. So start with a basic tear sheet, and build up over time. Certain industries in your investment strategy might have specialized KPIs, or some of your LPs might request data related to their ESG commitments.
Have additional questions? Reach out to learn more about fund administration at Carta. If you’re already a Carta fund admin client, you can request a demo of our Portfolio Insights feature.
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