managing vc portfolios for optimal return by shailesh vickram singh
DESCRIPTION
StartupCentral Venture Capital Masterclass, July 2012TRANSCRIPT
Investment Monitoring & Portfolio
Management
Shailesh Vickram Singh
e: [email protected] : @svickramw : fringenotes.in
1
Portfolio
PE / VC : Investment / Exits or Investment monitoring
Portfolio Management vs Secondary Markets
•Superior return through Value creation •Manage downside - bottom of the portfolio
Portfolio Management ...
• Manage Information flow
• Avoid surprises
• Maintain check & balances to take timely actions
Creating Value ?
• Board Seat
• Financial investors vs Subject matter experts
Can Investors really create value?
Creating Value : Board Seat
• Value creation or over rated monitoring exercise
Board Seat : Advantage
• Help in quarterly monitoring
• Great 30,000 ft view
• Updated with all important resolutions / observations
• Monitoring without interference
• Carrey weight to management & other executives
Board Seat : Pain points
• Limited & restricted insight about Operations
• Using internal audit etc costly and not viable for startups
• Innocent collusion
• Open to liabilities as per Indian legal system
• Not very effective in diagnosing problems early
Value Addition : Subject Matter Experts
•Theoretically shall create great value
•Bring best practices !! but what are they?
•Many times experts cross path with entrepreneurs
•Lee Iacocca syndrome?
Value Addition
Value Addition : PE Funds prespective
Designing MIS Sytems
•Sales
•Profit
•Product development ( in early stage / pre revenue)
•Speed
Or
•Action Points?
Signs !!! they are everywhere•Quality of Revenue / Expenses
•Board members - Not so independent
•CFO or third cousin
•Last quarter spike syndrome
•Information sanctity
Pain points !!•Management Comp?
•Budgeting ?
•ESOP
•Marketing budget ( in early stage)
•Associated companies / subsidiaries
Value Addition vs Back seat driving
•Intrusion or effective monitoring
Value Addition vs Back seat driving
•Communication, communication and communication but maintain formal reporting approval process intact
• Non personal reporting through centralized
•Its all business
•Thank You
•Shailesh Vickram Singh• t ~ @svickram
• w ~ fringenotes.in