Our Portfolio Management Secrets

Now it is time to get down and dirty. In this blog entry (and several that will follow), I will describe in detail the process we use to monitor the portfolio companies and help the management teams achieve our common goals.

Tools: Slack and Company Canvas

First of all, we use Slack within Nexit. We have a dedicated Slack channel for each portfolio company for keeping links to materials and discussions about portfolio companies in one place and easily accessible.

The main tool for keeping all relevant company information is our Company Canvas – an in-depth spreadsheet that contains the history and key information about each portfolio company in a standardized format.

We will return to the contents of the canvas a little later (and rest assured, we will also share a sample Canvas with you in due course).

The Weekly Partner Call

Each week, our partner call features one portfolio company in depth (we schedule the featured companies usually for several months ahead so that everybody can prepare properly). Other companies are also discussed but usually in less detail – the depth of an update is based on company situation and needs.

The partner responsible for the featured company (partner-in-charge) has updated the Company Canvas and shared it with others in good time before the call.

We also nominate two other partners as opponents (you might also call them devil’s advocates) to challenge the assumptions of the partner-in-charge and pose hard-hitting questions about the status and plans of the company (although the questions might be tough, the tone is positive and constructive, as our common goal is the success of the company).

Sometimes we also ask the CEO of the portfolio company to come and present his/her views of the company’s position. The CEO is present typically once or twice a year or when major decisions like further funding, strategy, exit, etc. are approaching. The partners typically prepare questions for the CEO and the discussions are often lively.

Once the partner-in-charge or the CEO has answered the questions and any decisions have been discussed in detail, we record action items and tasks (complete with owner and schedule) in the canvas. Sometimes we find out that more information is needed and discussions are tabled for fact-finding and further discussion is postponed for the next week partner call.

The action items are reviewed when the company is featured next time in the partner call: good material for the opponents which also helps make sure both the partner-in-charge and CEO are held accountable for what they do (and sometimes don’t do).

The Structure of the Company Canvas

The Company Canvas consists of ten main sections, one for each portfolio company area that we closely monitor:

1. CEO – The most important success factor
2. Team
3. Board – Resource or burden?
4. Governance
5. Business & Product
6. Market & Competition
7. Strategy – Where to play and how to win?
8. Funding
9. Exit – Preparing for the battle
10. Exit Process

In the coming ten blog entries, we will make a deep dive into these sections and what they cover and what kind of things we follow. These are based on our long experience from working with high growth technology companies and also on best practices from elsewhere in the startup and venture capital scene. We think these covers quite widely the success factors and tracking them closely (and making changes when necessary) can improve company performance significantly.

And rest assured: after the last entry we will share a sample company canvas with you so that you can use it if you wish.