We generally seek at least one seat on each portfolio companys board of directors; we usually serve on one or more board committees as well. Our representative is chosen based on the most efficient use of industry experience, business strength, and value-added networking opportunities. Particularly in smaller companies, our history confirms that our influence over strategy and operations can significantly improve a companys performance.
We expect to have weekly contact with our portfolio companies, and we are an instrumental part of growing their businesses. We do not, however, engage in any consulting arrangements or serve in any active management roles.
Based on our operational experience as well as investment experience, we understand how quickly a growth company can diverge from its plans, and how expensive such detours can be. From each of our portfolio companies, we require monthly, quarterly, and annual financial statements, including income statement, balance sheet, and statement of cash flows. At the same time, we realize that not all challenges can be quantified in financial statements. Our oversight of the company can include detailed product reviews, recruiting of key management, discussions with potential corporate partners, and even participation in sales calls and trade shows.
We know that each investment will encounter unpleasant surprises. Our goal is to uncover those surprises as soon as possible, before a solution becomes impossibly expensive.