As a venture capitalist, you invest in promising startups and help them grow into successful businesses. But how do you help your portfolio companies achieve their goals? In this article, you will learn some of the key ways that you can support your portfolio companies and maximize their potential.
The first step to help your portfolio companies is to understand their vision and strategy. What problem are they solving? Who are their customers? How do they differentiate themselves from competitors? How do they plan to scale and monetize? By having a clear picture of their goals and challenges, you can provide relevant and constructive feedback, as well as connect them with the right resources and partners.
At Endeavor Life Science Venture Fund and Venture Studio we make long term, multi-year commitments to our CEOs and portfolio companies to help support them with strategic and financial networks to grow, scale and commercialize. At the core of this process is alignment with the vision and mission of the company from the perspective of the CEO. Our role is to use our deep ecosystem to provide long term guidance and financial assistance to that the vision can be achieved efficiently and effectively. At the core of this is a continuous iterative process of workshops that bring real world feedback from strategic and financial investors to the CEOs so that the company can provide the most relevant solutions to patients.
In my experience it's crucial to ensure that support is there not only from the funding and related decisions (such as choosing investor entities wisely, timing of investment etc.) aspect but also leveraging the power of social media to market the portfolio companies and play a role in expanding their revenues by helping them get business. In short, be there for them at each and every step.
O melhor foco nesse come?o é entender bem as expectativas e necessidades dos founders. Elas diferem. Todos esperam crescer, mas o que geralmente precisam é de valida??o do produto ou canal. Tendo isso em mente, fica mais fácil mapear e agrupar os desafios que eles possuem. Geralmente vai ser relacionado a ter mais acesso a matéria-prima do crescimento: clientes, investidores ou pessoas.
Even though the strategy and, mainly, the vision should not be changed frequently, it is very important to revisit them frequently, either to reinforce and communicate or to adapt them in light of the organizational and market context, keeping them in line with the business reality and challenges.
The second step to help your portfolio companies is to provide capital and guidance. As an investor, you have a fiduciary duty to ensure that your portfolio companies use your funds wisely and efficiently. You can also offer advice on how to manage cash flow, optimize pricing, raise follow-on funding, and prepare for exits. Additionally, you can leverage your network and expertise to introduce them to potential customers, mentors, advisors, and co-investors.
Capital and guidance is vital for the growth of emerging companies. The ecosystem in this environment that is needed for growth is different than in the past 20 years. With decreased liquidity and inflationary forces the cost of capital is higher and the risk tolerance of investors is less. At Endeavor Venture Studio we believe that a multi-year sustained commitment is a key component of longterm success for companies. Endeavor’s Venture Studio is designed to support seed and Series A emerging companies, often acting as a bridge from accelerators to help companies grow, scale and commercialize. In this process we believe that the Venture Studio model is best at optimizing the efficient growth of companies and helping them prepare for exits.
Be rigorous in understanding what the business needs are. The investor's role goes beyond providing capital, as injecting money outside of the initial planned course, when there is no clarity on the problems and/or solutions, will only accelerate a problem.
O uso do capital de uma forma eficiente vai ser alocado quando for para resolver problemas reais da startup. Para evitar o desperdício, é preciso que o público-alvo esteja bem definido, os diferenciais e vantagens competitivas também, e os canais de aquisi??o bem amarrados com a melhor estratégia dependendo do ticket, seja marketing led growth para um ticket intermediário, sales led growth para um ticket maior, e product led growth para um ticket menor.
The third step to help your portfolio companies is to support their talent and culture. As a venture capitalist, you have access to a pool of talented and experienced professionals who can join or advise your portfolio companies. You can also help them recruit, retain, and develop their teams, as well as foster a culture of innovation, collaboration, and diversity. By supporting their human capital, you can help them build a strong and resilient organization.
This is where small things may make a difference. Helping your entrepreneurs gain exposure to your network, some KOLs that they can have access to, will likely have an impact on the roadmap of the companies.
Em talentos estar próximo de centros de ensino pode ser fundamental, principalmente parcerias com projetos de extens?o. Depois, para posi??es mais sêniors, pode ser bacana buscar indica??es dos próprios colaboradores, ou procurar parcerias com escolas especializadas em produto, vendas, cs, growth e afins.
The fourth step to help your portfolio companies is to monitor their performance and progress. As an investor, you need to track and evaluate how your portfolio companies are performing against their key metrics and milestones. You can also help them set realistic and ambitious goals, as well as identify and address any issues or risks that may arise. By monitoring their performance and progress, you can help them stay on track and achieve their desired outcomes.
Absolutely crucial to regularly monitor progress and to mutually agree on KPIs to track company performance. Ideally monthly but quarterly works too as with regular meetings not only do you see the growth but can also modify or adjust targets based on market conditions and company situation
As a CVC we prefer getting monthly (or quarterly) updates from our portfolio companies. We also ask the founders to keep us posted on the strengths and weaknesses peculiar to that time frame, and how they may affect what lies ahead. Whether the startup has shown stellar performance, or has struggled to meet its target for the period, we believe it's crucial for the entrepreneurs to give an account of why things have been better (or worse) than anticipated.
Aqui o crescimento consistente vai vir de um produto que alcan?ou PMF, que tem ótima capacidade de reten??o. Um produto bom, é quando o cliente volta para usar. Usa mais vezes. Indica o uso. Compra mais produtos. Esses indicadores como referreal, WAU DAU MAU, NPS, CES, CSAT, etc, s?o ótimos para explorar isso.
The fifth step to help your portfolio companies is to celebrate their wins and learn from their failures. As a venture capitalist, you know that entrepreneurship is a journey full of ups and downs. You can help your portfolio companies by celebrating their achievements, big or small, and acknowledging their efforts and contributions. You can also help them by learning from their failures, providing feedback and support, and encouraging them to pivot or persevere.
Aqui momentos de troca para celebrar os cases de sucesso podem ser verdadeiras inspira??es. Assim como ter empatia e escuta ativa para os casos que n?o deram certo, mas muitas vezes é melhor estimular o founder procurar o próximo desafio, do que insistir algo em um mercado que já esteja saturado ou n?o deu para criar uma real vantagem competitiva.
The sixth and final step to help your portfolio companies is to respect their autonomy and decisions. As an investor, you have a stake and a voice in your portfolio companies, but you are not their boss or their parent. You can help them by respecting their autonomy and decisions, as long as they are aligned with their vision and strategy. You can also help them by trusting their judgment and expertise, and empowering them to lead and execute.
This is crucial and as investors evolve this happens. the ability to ZoomIn and ZoomOut is crucial for the founder muscles to kick in. And they should need less of you (for the same things) as the business and they evolve. And this should be welcomed. Operator partner to shareholder partner often is a journey not for all but rewarding for those who are able to manage it.
Human relationships as a key to successful VC- portfolio cooperation. As an investor, developing strong relationships with the founders of your portfolio companies is foundational for their success; it is what will drive them to trust you, accept your advice, and much more. The thing is, every human relationship is bound to have conflicts: starting with different priorities, opinions through ego battles. So next time conflict arises, ask yourself, what is the outcome I’m seeking to achieve? What is more important: winning the conflict or preserving the relationship? You might be surprised by the shift in your own perspective and response.
Be available and interact informally with founders, avoiding acting only when necessary or called upon. This creates relationships of trust and openness to insights on how to help the business more effectively.