While the investment decision is critical to portfolio performance, VCs spend more than 60% of their time on post-investment activities in order to grow investments for lucrative exits. These activities can be separated into monitoring (protecting the interests of the investor) and value-adding activities (strategic influence, mentorship and access to networks).
It should be noted that because of the many different VC management styles, VC involvement post-investment vary greatly — ranging from informal interaction to stringent control.
Building a Trust Relationship
Let’s face it. If an entrepreneur could do it on his own, he would. It is a major inconvenience having strangers involved in your business that you’ve been conceptualising for ages and nurtured to life. The due diligence exercise is a distant memory, negotiation tactics lead to both parties having to compromise and you’ve gone from sitting on opposite sides of the table to being part of the same team with a vested interest in mutual success. If things work out, the money invested will be of much less importance than the value-adding activities of the VC.
To read the full, original article click on this link: What happens after Venture Capital funding is secured? | memeburn
Author:Keet Van Zyl
