Draft the quarterly LP letter

The quarterly LP letter is three days of gathering and an afternoon of writing. Someone searches the mailbox for every founder update, copies figures into a sheet, notices that four companies have not reported, chases them, reconciles what came back against the fund's own records, and only then starts drafting. The gathering is where the time goes and where the errors enter.

The updates are all in one mailbox and the fund's records are in one sheet. The join between them is mechanical, and so is the check that the quarter's totals still add up. What any of it means is not, and that is where a partner's afternoon should go.

Gathering portfolio updates for the quarter

The run starts at quarter end, once founder updates for the period have had time to arrive. It searches the mailbox in Gmail for each portfolio company's updates covering the quarter, matching on the company's domain rather than on a founder's name. Founders change, and forwarded updates arrive from whichever partner received them.

From each update it extracts what was reported and when: revenue, growth, runway in months, headcount, and any financing event. Every portfolio company with no update this quarter goes on a separate list, with the date of its last one.

The fund's side comes from its holdings in Google Sheets: ownership, cost basis, current carrying value, and any valuation change in the quarter.

What keeps an LP letter accurate

Every figure carries the date it was reported, not the date of the quarter it appears under. Founder updates arrive on their own schedules, and an update sent in the sixth week of a quarter contains numbers from the fifth. Presented under a quarter-end heading with no date attached, those become quarter-end numbers, and the letter drifts away from accuracy without anyone having decided anything. The date is a single extra field that keeps the whole document defensible.

Companies that did not report stay in the letter by name. The instinct is to carry last quarter's figures forward, because a gap looks like an omission and a number looks complete. But a company that stopped reporting is the one an LP most needs to hear about, and carrying its figures means it keeps appearing at a valuation nobody has revisited for a year.

Discrepancies are handed to a partner rather than resolved. A founder reporting strong growth against a carrying value the fund has not moved is either a stale valuation or an optimistic founder, and which one it is has consequences. A draft that averages the two, or silently prefers the fund's number, removes the question from view at the exact moment somebody should be asking it.

Fund-level numbers that reconcile

From the holdings, the run computes the fund-level position: total value, unrealised gains, realisations in the quarter, and remaining capital. It then checks that those totals equal the previous quarter plus this quarter's movements. When they do not, the letter reports the difference instead of a total, because a total that fails to reconcile is the one figure LPs will check first.

How the quarterly LP letter draft is built

The letter is written into Notion as a draft, in a set order: fund-level position, material changes this quarter, company-by-company notes, then realisations and outlook. Every figure carries its source and its reporting date. Companies with no update appear with their last reporting date and no old figures. No forward-looking claim about a company goes beyond what its founder stated, and anything a founder did state is attributed to them.

Before the letter, a partner gets a short work queue: the companies that did not report, the figures that disagree with fund records, and any fund-level total that failed to reconcile. That list is meant to be cleared before the letter goes out. The judgement about what the quarter means is left to the partners, which is the part LPs are actually paying for.