Quarterly investor letter template for private equity: reporting a portfolio data license

In a private equity quarterly LP letter, report a portfolio company's data license briefly and conservatively: one-time, non-recurring, the company's own decision, no named counterparty, and no projected proceeds. Place it in the portfolio update section and have fund counsel and compliance review the wording first.

How should a sponsor report a portfolio company's data license in a quarterly LP letter?

Keep it short, factual and conservative: state that the portfolio company entered a one-time license of its operational records, that the decision and terms were the company's, that the proceeds are non-recurring, and that the sponsor makes no projection. Place it in the portfolio update section, not in the headline performance narrative.

This page gives wording for a sponsor whose portfolio company has actually signed a data license. It is not for pitching the idea to LPs before a deal exists. Check the wording with fund counsel and your compliance officer; the language below is a starting point, not approved copy.

This is general information, not legal, tax or financial advice. Confirm with your own counsel and compliance team before acting.

Where does it go in a standard quarterly letter?

Letter section	What goes there	What stays out
Fund summary	Nothing on the license unless it is material to the fund	Any projected proceeds
Portfolio highlights	One sentence per company with a notable event	Superlatives
Company update	A short paragraph, as drafted below	Counterparty names, terms and price
Valuation notes	Only if the license affects the valuation process, per the valuation policy	Run-rate treatment
Outlook	General statement on value creation levers	A promise of repeat licensing

Templates

Replace the placeholders in braces. Run each version past counsel.

Version A: short mention in portfolio highlights

Version B: fuller company update

Version C: for a license still pending

Version C should only be used if it is material and counsel agrees; many sponsors will say nothing until signing.

Wording rules

Say "one-time" and "non-recurring". Do not describe the proceeds as run-rate or recurring revenue.
Say that the decision was the company's. The company keeps ownership and approves scope and price.
Do not name the licensee, the buyer or the intermediary unless the contract and counsel allow it.
Do not project proceeds or describe the license as a value creation certainty.
Do not quote the price unless the fund's reporting policy requires disclosure of such amounts.
Match the tone to the rest of the letter: neutral, past tense, no marketing words.
Check confidentiality provisions in the license before any mention.
Align with the fund's valuation policy and auditor.

Who should review the paragraph?

The portfolio company CFO, to confirm the facts and the accounting treatment.
The sponsor's deal lead, to confirm the paragraph matches the board record.
Fund counsel, for confidentiality and disclosure.
The chief compliance officer, for marketing and reporting policies.
The auditor, if the license affects valuation.

The data license term sheet checklist lists the terms to check so the letter reflects what was signed, and the portfolio review agenda shows where to raise the topic with management before reporting. If you are still deciding which companies to screen, the guide to assessing portfolio company data opportunities and the pre-close quick-win list come earlier in the sequence.

How it connects to the sponsor's role

The sponsor's operating partners are the usual route into a portfolio company, which is covered on the private equity operating partner page. Rewards for the sponsor or a related party are a separate topic from the LP letter: Partners earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals, capped at $100,000 per referred company. The reward is paid only after the buyer pays and SourceX receives its fee; an introduction, meeting or signed agreement alone does not trigger payment, and no reward is guaranteed. Whether and how any such reward is reported to LPs, and whether it is permitted under the fund documents, is a question for fund counsel.

What not to say

That data licensing is a new revenue stream the fund expects across the portfolio.
That the license improves exit value by any amount.
Anything about the licensee's plans for the data.
Any statement that the company "sold" its data. Data is licensed, not sold.

Next step

If a portfolio company is ready to explore a license, run it through the company fit checker first, then register as a partner and make the introduction. Ask the CFO to start with the introduction email builder if a note is needed.

Step 1Share your linkSend your personal link to a company you know.
Step 2Company appliesThe company applies itself at /apply.
Step 3Buyer selects and paysThe buyer selects and pays for the data and SourceX receives its fee.
Step 4You get your rewardYour share of SourceX fees becomes payable.

Common questions

Should the LP letter include the price?

Only if the fund's reporting policy or fund documents require it, and only after counsel checks confidentiality terms in the license. Most sponsors omit the amount and describe the arrangement in general terms. Never project proceeds or imply the license sets a pattern for the portfolio.

Is the proceeds line recurring revenue?

Treat it as one-time unless the signed agreement and the accounting team say otherwise. Typically a company receives a single payment, so describe it as non-recurring. How it is recognized depends on the contract and the company's accounting policies; the CFO and auditor decide, not the letter.

Do we name the buyer?

Not unless the contract allows and counsel agrees. Many licenses restrict naming the counterparty. Use neutral wording such as a third party. A sponsor's letter should follow whatever confidentiality duties the portfolio company has.

Can we mention a pending license?

Only if it is material and counsel agrees. Nothing is binding until the company agrees price and terms and signs, so a pending discussion may never close. Many sponsors say nothing until signing, then report in the next regular letter.

What about a sponsor reward?

Whether a sponsor or affiliate may accept a partner reward, and how it is reported, depends on the fund documents, allocation policies and applicable rules. Raise it with fund counsel and compliance before registering. The reward is a share of SourceX's fee and is not deducted from the portfolio company's price.

Free resources

Due diligence checklist generator — A tailored document request list by deal type.
Cash flow calculator — A 12-month cash forecast with shortfalls highlighted.
Referral earnings calculator — Hypothetical partner earnings with the per-company cap.
All free tools · MCP resource center

By SourceX Partnerships Team · Published 2026-10-09 · Updated 2026-10-09

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