Behind the scenes #16 | Portfolio monitoring
12.07.2021
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We recently talked about the investment process and why you have to meet with us so often and make so much contact before we arrive at a decision as to whether the time is right for us to start working together. Let us first consider however what happens after we cross that magic threshold of completing due diligence and signing a contract. Welcome to a new edition of Behind The Scenes, where we share our experiences and views of the world of VCs.TDJ Pitango Ventures team
Portfolio monitoring
Our contract signed, hands shaken – what then? We will now shortly outline one of the practices we apply in working with our portfolio companies: regular monitoring. We know some of you might associate this process with invigilation and an attempt to quash founders’ independence. Most of you would like to be left in peace once you receive funds from your investors and focus on that which matters most – chasing after the targets we have come to agree. Why do we need monthly reports and data from you?When deciding to work with a startup, we most of all want to add value to it. We have almost 30 years of experience in building up and developing companies – this has been plenty of time in order to learn how to notice risk in places one doesn’t think to look when running a fledgling startup. We analyze data with great care and check if everything is in order, all the time trying to support and teach you how to draw conclusions month by month, in order to relatively quickly introduce improvements in places which demand them. For example some companies grow rapidly straight away, without noticing that their client debt is also constantly on the increase.It is worth noting – our monitoring is regular, usually monthly, allowing us to quickly keep tabs on companies. We do not have to go through each department, each invoice and each spreadsheet. We then know where the critical points might pop up and focus our attentions on those.
Monitoring is normal part of a well-ran business, including investments. This is yet another layer of support for our founders, to look for signals: good ones, to reinforce them, and worrying ones, to work on possible remedies.<span class="su-quote-cite"><strong>Wojciech Fedorowicz</strong></span>
All procedures are completed and money transferred to the bank. Welcome to the portfolio! Of course, there are contractual requirements for information updates. But the key is the relationship is built on a personal basis. We usually have regular meetings with the CEO. This informal connection plays a key role in assisting the company make progress. Successful CEOs and founders know how to leverage the relationship and get active assistance from the fund ona n ongoing basis. Up to the CEO to take the benefit.<span class="su-quote-cite"><strong>Daniel Star</strong></span>
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