Business metrics and reporting are vital to building transparent and constructive private equity partnerships, but new reporting demands can be daunting for portfolio businesses at the outset. However, it usually doesn’t take long before founders see the enormous value of surfacing and tracking new insights and perspectives to accelerate growth. And at Copilot Capital , our B2B software focus and operational know-how give us an extra edge in understanding the most important metrics, spotting trends, and knowledge sharing across our portfolio.

The B2B software businesses we invest in are sitting on mountains of data, but rapid scaling has often made it increasingly difficult for founders to maximise this information. Operating with around 50 to 100 people, and around £5m to £15m ARR, they have a great product and strong sales, but a lack of time and resources to surface, report, and track key metrics. When we start working with them, we often find data has become siloed and their analytics and reporting engine isn’t ready to support the next growth stage, or the comprehensive reporting we’re looking for as investors.

Accelerating growth through analytics and reporting

As a result, one of our core priorities when we start working with founders, is filling this analytics and reporting gap. As specialist B2B software investors, we have deep knowledge of the most important metrics to the business models we invest in, we know the right questions to ask, and how to spot opportunities in data. In fact, we specifically seek out businesses where these visibility gaps provide an opportunity for value creation.

For example, one of the key metrics we look for, which founders often overlook when scaling quickly and overstretched, is net retention, which goes beyond customer numbers to show who is using the product, renewing their subscription, and increasing spend beyond the initial contract. Whereas some large software investors won’t invest unless a business has a net retention figure of over 100% (which indicates growth via a consistent customer base and low churn rate), we take a more flexible approach as we understand this isn't always a focus for founders when scaling their business to £15m ARR.

Hampered by siloed data, and systems and processes that have fallen behind the rate of growth, these businesses have a fantastic opportunity to add value by unlocking data and business trends. So, when we start working with founders, we provide our standardised reporting pack, outlining the metrics we look for (tailored to B2B software businesses), and we proactively work with them to surface the right numbers, reformat where necessary, and start sharing these insights across the business, so they can influence decision-making.

Having this information and visibility helps founders look at their customer base in a new light, and make strategic changes, such as investing more in customer success, better filtering prospects, or rebalancing marketing spend.

Identifying the real ICP at PriceShape

A great example of where the right analytics has made a difference is at PriceShape, the smart pricing tool for retailers and brands. Following our investment in the business, one of the first things we noticed was that while the retention figures were decent, there was room for improvement. We wanted to understand why.

By segmenting their customers by size, it quickly became apparent that their most loyal and profitable clients – their ideal customer profile (ICP) – were larger than previously thought, and their retention metrics were being negatively impacted by smaller businesses paying upfront, and then not fully utilising the platform.

This new insight enabled the founders to make strategic changes to improve retention metrics, including commissioning their sales teams to prioritise these larger, higher-value customers, rather than focusing purely on customer wins.

A holistic, cross-portfolio approach

Another way the right metrics and reporting enable Copilot to add value is by comparing data trends and patterns across our portfolio to share insights, lessons, and ask better questions to accelerate growth. I've always been fascinated by comparing businesses I'm working with, and again, this is an advantage of Copilot’s specialist investment focus, as we’re able to draw clear lines across our portfolio.

We regularly sit down as a team to analyse and discuss our companies’ financial accounts and KPIs, to spot trends or key differences we can learn from. For example, if we see sales accelerating in one business, we will analyse the reasons why to see if the same approach can be applied across our other companies. If one business excels at new sales or upselling, we’ll share the key learnings with our other founders - a valuable way of informal benchmarking, which non-PE-backed founders would struggle to access.

A valuable Copilot for strategic finance

Beyond the benefits of cross-portfolio insights, founders often find we provide extra strategic finance firepower that helps their team at critical times such as budgeting and the rolling forecast. The diligence process often reveals new insights previously unsurfaced, but it’s important to keep going after a deal has been signed. Finance teams are sometimes the last to get fully built out in a fast-scaling company, and we can step in to give them the extra analytical boost needed.

Evolution, not revolution

Private equity is a partnership that demands a high level of transparency between founders and investors, and reporting on key metrics is a vital part of that. But we’re also very sensitive to the pressures management teams face, which is why we focus on evolution rather than revolution in approaching the data challenge; gradually digging into what is available to build a clearer picture, while minimising the workload for the team. And if the data isn’t quite right, we’re happy to get stuck in to bring it to where it needs to be – and ensure finance drives valuable insights and is more than just reporting.

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