Institutional Investment Goes Fully Online

Feb 25, 2022

Announcing the Standard Metrics Series A

8VC is excited to announce that we’ve led a $23.7 million Series A for Standard Metrics, formerly known as Quaestor. As their first investor and first customer, we’ve enjoyed a front row seat for the company’s growth story — while reaping tremendous utility from their platform.

Standard Metrics was born from a problem we’ve experienced firsthand at 8VC. As investors, we need to know how our portfolio companies are doing across various performance metrics. This hardly seems newsworthy — yet, until recently, this was mostly accomplished through sticky notes and Excel. And if that sounds painful, consider that VC and PE combined have also grown around 3X over the past decade in terms of AUM (~10X in the case of VC). Leading up to board meetings, VCs would be running around like the proverbial headless chicken. And while investment philosophies differ firm to firm, we’ve yet to encounter any VC who enjoys being compared to a chicken.

When something should be much better than the status quo, that’s generally our clue to figure out who’s solving the problem — or take a crack at it ourselves. We were privileged to iterate with the help of a visionary founding team (more on them in a bit), and the result has been transformative: the first modern software platform to give investors a centralized, richly detailed picture of how their portfolio companies and investments are doing in the areas that matter. The kind of clarity that used to be out of reach, or require a costly and distracting fact-finding expedition, has gone from aspirational to table stakes. For the first time, the process of institutional investment has been brought fully online.

For portfolio companies, the value is the flipside of the investor experience — in other words, effortless investor relations. And for both sides, the groundwork is laid for board meetings to focus on accelerating the business, fine-tuning strategy, and making the best use of your joint network — not on presenting basic numbers for the first time.

The Standard Metrics platform is highly collaborative, reflecting the modern VC-portfolio company relationship. It takes advantage of workflow automation wherever appropriate, eliminating busy work and creating both the time and space for human expertise to flourish. Core investor features include automated data collection, centralizing business-critical information on investments, a fully integrated analysis/insight generation suite, rich visualizations of performance within and across funds, and one-click, elegantly constructed tear sheets. Exchange rates are built in and updated in real time, ensuring an easy, accurate picture anywhere in the world. Looking further ahead, products for LPs are in the works. Meanwhile, for portfolio companies, Standard Metrics provides all the tools to enable comprehensive company updates, automatically pipe select data to investors, dynamically respond to requests for information, and manage stakeholder relationships.

8VC’s Smart Enterprise thesis underpins much of what we do as a firm, and Standard Metrics represents an outstanding opportunity to continue harnessing these forces to create new value. It’s a simple, but far from easy, formulation: integrate data to solve a key, non-linear problem, and in the process, create a platform capable of solving broader classes of problems. “Non-linear” generally means “difficult”, but it also means there will continue to be compelling new fronts to conquer in Act II and beyond. We’re excited about the problems Standard Metrics currently solves because the need is acute and growing, and longer term, there is much more that can be done on the platform. As one small example, let’s say a fund wanted to provide liquidity for its LPs a decade in. The ability to show aggregate portfolio metrics, illustrate company performance, and accurately model the value being created would justify premium prices in the secondary market, benefiting the fund and LPs alike.

Through 8VC’s Build program, we got to work side by side with the co-founders to develop the initial proof of concept. It was (and remains) an exceptional team, individually and in concert, and it was an experience seeing each of them maximizing talent and experience to create something truly valuable. Kevin Hsu, who leads product and design, was an early employee and product manager at Carta, so he knew what it took to make a platform into the industry standard. As 8VC’s Director of Design, Deny Khoung played a pivotal role in spinning out a number of companies, including Affinity, and brought that diversified knowhow to his new post as Head of Operations. CEO John Melas-Kyriazi brought a deep understanding of the problem space as a former investor at Spark Capital and prolific angel, in addition to his experience as StartX CFO and an applied physics researcher’s intuition for how things work.

2021 was a banner year for Standard Metrics. One of the things that impressed us as early backers was how quickly the team scaled up from the proof of concept to something we could wholeheartedly recommend to fellow investors. Over the past year, more and more of those investors took notice, as dozens of paying customers signed up. The built-in network effect of marketing to investors is enormous, given their natural incentive to onboard their portfolio companies, and this concept was borne out as companies on the platform rapidly scaled to 1000+. Finally, the team more than doubled, and many more key roles are opening to continue the company’s aggressive growth.

A bit about the name change to Standard Metrics: as aficionados of all things classical, we were fond of the name Quaestor, an homage to the auditors of the Roman Republic. Yet the company was founded to modernize an industry that sorely needs it, and, as the platform achieves wide adoption, there is a tantalizing opportunity to standardize both the metrics themselves, and the technology used to make sense of them. In another sense, “standard” can connote “best in class” — and we certainly see a best-in-class company here. In short, “Standard Metrics” is straightforward and unfussy, but taken literally, it’s a bold claim — one that the team has backed up consistently.

It’s been an incredible journey thus far, and we’ve been honored to support and partner with John, Deny, Kevin, and the whole Standard Metrics team since their inception. And while a Series A is already cause for celebration, we consider it especially noteworthy that many of Standard Metrics’ investors are also customers themselves. We trust they will continue to be as happy with the product as we are, and we look forward to watching this next chapter of growth unfold.

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