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Post Funding Mistakes That VCs Can Avoid

Post Funding Mistakes That VCs Can Avoid

There always remains a debate about whether the valuation of companies remains an art or a science. The predicament of this scenario has always derived valuable insights from leaders in the industry. But the job doesn’t really end there, does it?

The past decade has seen the highest investments made in the field while simultaneously witnessing a common pattern of failures in most of their investments. Although each company’s reasoning may differ, there always remains a point of commonality that helps us join the dots.

The main goal of the funded companies is to scale efficiently - while this remains the common pathway, the journey is often myopic. Obliteration of alignment while scaling has ensconced the comfort of failure in most start-ups. When VCs were questioned on how they tracked their portfolio companies; they referred to the vintage solutions such as KPIs and “Excel sheets” to track their companies. Failing to excel despite using “excel” is quite an irony!

  1. No standard goal-setting framework.
  2. Transitioning tracking methodologies from tasks-based monitoring to outcome-based tracking.

How Can You, as a VC, Avoid Making the Same Mistakes?

By venturing into OKRs. It is the best decision you can make for your companies. Being able to monitor the growth of your portfolios on an outcome-based practice rather than a task-based approach such as KPIs and ‘Excel’. All teams are aware of what should be done - but are they aware of how much they have achieved? And, based on what has been achieved - how much has necessarily contributed to the growth of the organization?

All of this is possible with just a click of a button using Fitbots OKRs. Real-time updates! It remains as ubiquitous as possible. Believe me, it’s easier than tracking your S&P 500s and DIA.

How Do I Implement OKRs in My Portfolio Companies?

With the increase in adoption and use of OKRs among startups around the world, it is

imperative that VCs begin to familiarize themselves with the concept of OKRs. How

Can OKRs help drive strategic focus across their portfolios?

OKRs help you bridge the gap between strategy and execution. By choosing to pick

the right set of metrics, startups can go beyond focusing on company growth at an

operational level and head in the direction of showcasing solid growth potential to

VCs. On a parallel note, keeping a regular track of your portfolio’s OKRs progress

gives you a clear and specific view of the real-time business progress.

This empowers VCs to discern the high-performing portfolios from the ones that

need more attention. The ROI of having the ‘right view’ on your portfolio companies is

multifold.

 1. Introduce the Value of OKRs

Speak to your portfolio(s) on the importance of OKRs and how it drives alignment and

clarity across the company. Run a thought experiment helping your portfolio Founders

visualize ‘What would they be on Dec 31st, 2022’.

These case studies explicitly showcase how startups built business velocity by

driving alignment and connecting the entire company to a primary goal which led to

achieving the top priority business outcome.

2. Track on Software and Gain Real-Time Insights

While we understand that the initial urge to manage OKRs on excel sheets is high,

once team sizes cross 20, it is highly advisable to switch to intuitive platforms which

can minimize the time taken to analyze OKR progress in excel sheets. Platforms like

Fitbots provide intuitive dashboards which allow alignment and showcase OKR Progress alongside the week-on-week progress of your teams. This gives you and your founders much-needed control over the key decision-making metrics.

Get OKRs right with Fitbots OKRs_OKR software free trial

Providing your team with clear perspectives and guidelines will help them grow and follow their pathway to long-term growth and success. Effective implementation of Fitbots OKRs takes you a step closer to your goal.

About the Author:

Varun Nankani is a finance enthusiast and a part of the Fitbots family as an OKRs Catalyst. His never-ending love for venture capital provides him with the zest to compare scenarios to the VC world and answer the questions based on “What would a VC do?”

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