Tear sheets

Tear sheets

Author: Adam Lewis
Read time:  2 minutes
Published date:  1 March 2024
A tear sheet helps LPs understand how their investment is performing. Download our tear sheet example to get started today.

What is a tear sheet?

A tear sheet is a one-page summary document that contains key financial information about a company, including an overview of the company, leadership, and services. Also known as a “fact sheet”, the name “tear sheet” comes from an old practice where stockbrokers would tear a sheet out of their summary books to give to prospective investors as a stock recommendation.

Venture capitalists create tear sheets about each of their portfolio companies and send them to their limited partners (LP) on a quarterly or monthly basis to help them understand investment performance.

How to create 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 of a tear sheet or to use a tear sheet template.

Tear sheet example

We’ve created an example 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, balance sheet, liabilities, etc.)

  • A section for your own commentary

tear sheet example illustration

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

We talked to Catherine Chen, a partner at Lightspeed Venture Partners, to get advice for putting together a tear sheet.

Make your tear sheet scalable

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.

Start small

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.

Incorporate feedback

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 and benchmarks, or some of your LPs might request data related to their ESG commitments or market capitalization.

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.

Adam Lewis
Author: Adam Lewis
Adam Lewis is a former writer at Carta who covered the private markets. Prior to Carta, he spent five years as a reporter at PitchBook writing about dealmaking, fundraising, and industry trends within the wide world of private equity.
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