Using Synaptic to run benchmark analysis on your portfolio
Hello! My name is Aya Spencer, and I am a senior analyst at Kapor Capital, an early-stage impact fund based in Oakland, California. Today, I’d like to share how you can utilize Synaptic to assess the health of your portfolio.
Note: I am not an investor in Synaptic at the time of this article’s posting, nor am I being compensated to write this post. I just like the platform lol.
A little bit about benchmark analysis and why it’s important
There’s a quote from this blog that summarizes what benchmarking is:
Benchmarking is the process of comparing your own organization, its operations or processes against other organizations in your industry or in the broader marketplace. Benchmarking can be applied against any product, process, function or approach in business.
Benchmarking your portfolio is crucial in the world of venture capital because it gives you a better understanding of how your investments are doing. If you work at an early-stage fund, benchmarking can become especially important because, often times, your portfolio companies do not have much revenue. Understanding a startup’s performance in relation to its peers (of a similar industry and stage) is a great way to gauge progress and helps to strengthen the conviction towards identifying a “leader” in a segment.
Benchmarking can be done both internally and externally. While external benchmarking compares a firm’s metrics to those of other companies, internal benchmarking compares measurements within a company.
Synaptic
Synaptic is a really cool tool for data driven investors. Although there are numerous ways to use this tool, I believe benchmark analysis to be one of the platform’s strongest points.
Comparing against itself [internal benchmarking]
When you have a large number of companies in your portfolio to keep track, it quickly becomes a challenge to be on top of their performance. Several funds arrange “quarterly reviews” and “annual reviews” to perform in-depth evaluations of their investments. For these deep dives, personal check-ins and conversation with the founders will almost always be valuable, but Synaptic makes it simple to keep an eye on the fundamentals. For instance, the Canva profile is shown below. You can look at measures like website traffic, staff headcount (and job opportunities), and Github activity, among many other indicators.
One standout feature is their “tech mentions” tab, which allows you to explore the frequency with which businesses mention “Canva” in their JD . This functionality can be particularly helpful if you are interested in, say, assessing the pace of corporate adoption of your recent B2B tech investment.
Comparing against competitors [external benchmarking]
Consider the scenario where you wish to compare some signals between comparable (peer) startups in the ecosystem of your portfolio. You can contrast comparable businesses using their “benchmark analysis” feature, which is also in beta.
You can also leverage the “screeners” and “discover” functions to see how well your portfolio stacks up against those of other firms in the ecosystem. I won’t go into depth about these aspects, but the key point is that they are two additional ways to compare a company’s standing against its peers.
Conclusion
Benchmarking your portfolio is a critical component of assessing the health of your businesses. A tool like Synaptic and others can be helpful in leveraging signals to measure company growth!
Thank you for reading. Feel free to check out www.ayaspencer.com for more of my writings!
