#7 The Agile Venture Capital Fund

How to apply agile methodologies to manage your VC

Apr 07, 2023

Ever since my cofounder Luiz F. Takano taught me and Tueri’s team to use agile methodologies to organize and manage the workload, I haven’t stopped using it. I must confess that it was a little hard for me to get used to it at the beginning and Luiz had to suffer his share of frustration caused by me not updating my tasks on the Trello board. However, after a while, although I can’t say I’m an expert in Agile, I must confess I really enjoy working with it.

After the experience with Tueri, I started my MBA at IE Business School. A good chunk of the MBA grades was group projects. Groups were created randomly at the start of each term with 6 or 7 people all from different countries and cultures. Organization was definitely a challenge and key for success.

I remember that the first week of the term, I had just met the people that would be my team members for the quarter and after a couple of team workshops I thought the year could be a disaster. We all had so many different work cultures and experiences that it was hard to even agree on the simplest things. In this environment I thought it would be great to suggest using Agile methodology to organize all group projects.

Basically at the beginning nobody wanted to use Agile, but I prepared a Trello board with all the classes projects and used it as a demo to show the team how we could work, creating very small, defined tasks each week with a person responsible for each, having a product owner for each of the classes, allowing anyone to decide what they want to contribute to and having weekly meetings (sprints) to show progress and organize the next sprint.

Well, not only it worked perfectly and smoothly, but we were the group that had their work done first, and while many groups where panicking right before the project deadlines (which were at the same time as final exams) my group was free and happy to have a team-building dinner and study.

And it even had a bigger impact, during the second term, all groups were rearranged mixing everyone with new people and starting again the process of organizing work. All members of my previous team implemented the agile methodology in their new groups!!

So, this was just an example of how agile methodologies could help in many different environments. Now to the topic at hand!

2. For VCs:

How can we apply agile to Venture Capital investing and team management:

So, although it is thought for tech project management, I believe its principles can be applied also for Venture Capital.

1st: Goal Setting

A regular Venture Capital has the main goal of investing a particular amount of money in a particular number of companies in order to make around a 2-3x return.

Once invested, the VC will want to help its companies grow and, at some point sell to make the profit.

Oh, don’t forget, most VCs need to keep fundraising, so a good marketing strategy is essential to create awareness and be at the top of mind of investors.

Finally, VCs have to report to their investors (LPs) about the performance of the funds companies and of course administrate the fund (employees, legal, finances, etc).

So, first step would be to set the yearly/quarterly goals for each department. For example:

Venture Street Fund (an imaginary VC) has these objectives for 2023:

Investment: Investing 20 Startups with proprietary GEN AI in the US Market
Marketing: Being the most recognizable VC in NY
Portfolio: Adding at least a x2 yearly value to all portfolio company
Finance and admin: Optimizing Venture Street’s return on investments

Now, to manage the team, we would create a column on the left with these objectives so that everyone is aligned.

2nd: Sprint Tasks

Sprints are periods of time to get tasks done. Every task should be done in order to get closer to the main goal. So, first thing the team must do is define the tasks to be done during the sprint. Those tasks must be small, well defined and achievable.

For example, in order to invest 20 companies in a year, an VC must scout and interview multiple startups right? So a sprint task could be interviewing 4 startups.

I like to have weekly sprints every Tuesday, but they can be any day of the week and biweekly. The point of sprints is to divide the big tasks into very small and achievable tasks and so to avoid the team from accumulating workload at the end of a deadline and progressing little by little but without stop. It also allows for quick change if something is not working.

A typical sprint to accomplish those objectives could include something like this:

3rd Agile Dynamics: team roles for VC

What I love about Agile is the collaborative and flexible nature of it. Agile allows to work in very horizontal teams, in which collaboration is key.

In Agile, there would be a product owner responsible to define all the tasks that must be done during a project and the scrum master would be in charge of overseeing sprints and removing obstacles.

What’s great about this is that, once the development team knows the project necessities, team members will self organize every sprint to get the tasks done, dividing them between themselves (this is why tasks must be super well defined).

For VC, this can work just the same. The different teams can set the tasks that are needed every sprint and then divide between the team members. There one product owner for each department (investment, portfolio, etc.) as well as a per main objectice or project. The rest of the team then works as a development team, deciding which tasks to pursue during each sprint and the scrum master helps to make sure the team can deliver and get their work done.

This is an example created by Michael Morosi in his blog https://www.linkedin.com/pulse/applying-agile-method-equity-portfolio-management-michael-morosi/

4th Portfolio Companies:

Create a board for your portfolio companies to update any detail about them. This allows all information to be centralized for the team as well as updated by any member of the team. It works exactly as a CRM but being linked to the main board the team members don’t need to be changing platforms which creates an extra difficulty.

3. For founders:

Be ambitious and think BIG

I’ve come across several founders that have great companies with great business metrics but are not great communicating them or showing the value and undersell what they have.

If you are a founder, one of the most important skills to have is communicating how good your company is and thinking big about the future possibilities. Please don’t forget to tell that you have a big contract on your pipeline or that you expect to 10x your sales next year!

About next article: SILICON VALLEY BANK AND BITCOIN…

Fun fact: Tome raised $43 Million at a 300M Valuation Prerevenues!

Check full story: https://www.forbes.com/sites/alexkonrad/2023/02/22/storytelling-ai-startup-tome-raises-43-million/?sh=19d205b574f1

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