Reflections on 3 years of finding a product/market fit inside a venture fund

  • Portfolio Operations is still a terribly misunderstood term. For me, it signals our commitment to giving our all to help our hyper-growth portfolio companies like Swappie and Insurello, by having a structured function, team and a product, that is separated from our day-to-day investment activities. That way we can remain laser-focused on helping the portfolio companies with solving meaningful problems in the most efficient and enjoyable way. Our daily work consists mostly of giving strategic advice and sparring, sharing more practical know-how, or connecting our entrepreneurs to the best people we have in our network.
  • My first 3 years of doing Portfolio Operations has had awfully a lot in common with finding product/market fit and trying to get to the intersection of what our entrepreneurs need the most and where we can genuinely make the most impact for them.
  • That just like in startups, saying ‘no’ and being relentless about focusing on just selected things (for us, mostly things related to expansion and talent), makes all the difference when it comes to delivering just the right things at just the right time.
  • Portfolio Operations should probably take a page or two from the playbooks of Customer Success Management, because that’s what we’re ultimately trying to do: make our customers — the very best Nordic and Baltic entrepreneurs — succeed in the crazy hard and ambitious mission they’ve taken upon.

1. Onboarding (the startup into our portfolio)

I’ll start the process with this step, but truth be told, Portfolio Operations at Inventure often starts even before the companies decide to join the portfolio. We think it’s only fair that the entrepreneurs considering partnering with us have a good understanding of what it will mean to work together and where they can expect our help and support. It’s crazy to think VC used to operate without a structured sell process and a general selling point of “take our money and this person on your board”. I believe no modern top-level entrepreneur would or should settle for that.

2. Execution and expansion

This is the most important part, yet the hardest one to describe if you don’t go into the nitty gritty. This is where planning stops and talking turns into walking, which we’ve seen to be surprisingly hard for parties and people mostly geared towards high-level planning. But as an ex-operator myself, I know and appreciate the reality that actually happens in startups after all the fancy strategic buzzwords are thrown around sufficiently in big board room meetings. That’s why I believe an ok plan executed to perfection is still light years ahead of a perfect plan barely executed at all. The more concrete and trackable the actions to be taken are, the easier it is to gently remind people to focus more on walking, and less on talking. This is usually also the part where the best individuals and teams separate from the rest.

3. Fundraising and renewal

During the final stage of the process, if all has gone as planned, we again sit down with all of the relevant parties. We take a look at the journey thus far, both before the last round and after it, and start building the narrative for the next round. I’ve written a separate article on Soaked by Slush on how to run a fundraising process, so feel free to check that out for my more in-depth thoughts on the matter. To summarise the gist of it, we 1) build a long list of all semi-potential investors 2) make initial contact with some just for the sake of having practice rounds 3) we focus the follow-up discussions with the most relevant ones and iterate based on the feedback 4) we secure a couple of pending term sheets from which to help choose the one to continue to DD. If the plan we made after the last funding round has been executed to perfection and showing clear signs of growth, it’s much easier to present a new plan and a narrative for the next round.

Reach out:

Finally, I do believe that the way VC work is changing and we at Inventure would rather be at the forefront of this trend. I would be happy to spar with fellow VCs and hear your feedback on what we are building.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Andrea Di Pietrantonio

Andrea Di Pietrantonio

European of Italian nationality. VC at @inventureVC @a_adp