managing vc portfolios for optimal return by shailesh vickram singh

Investment Monitoring & Portfolio

Management

Shailesh Vickram Singh

e: svs@seedfund.int : @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