Lesson: Picking Winners with Ullas Naik

Step #5 Post Investing: After investment what is next

Post investment, again, it comes back to there are people who can add value in a variety of different ways. In order to increase the odds of success for any company, especially a startup, all the investors as well as other ecosystem members have to be adding value.

The way to add value is certainly helping recruiting. It’s hard to find good technical talent and business talent in the Valley these days, so help with recruiting, help with business development, help with just strategy and tactics. Don’t create too much overhead for the entrepreneur, but at the same time, hold the entrepreneur accountable, which means that you should almost always be getting monthly reports from the entrepreneur, monthly updates from the entrepreneur. If somebody’s not sending that, then that’s bad practice, so ensure and have a conversation with them respectfully, that they should be sending those to you.

A monthly communication is often just an email from the founder or the CEO at that point in time. It’s most of the key performance indicators for any business, which is, “Here’s how we’re doing on sales.” In some cases it might be too early for that, then just give me an update on product development and also on sales pursuits because they may not have actual sales but at least you have to be communicating with customers in order to make sure there’s a feedback loop going on for the product. Those KPIs are important — sales, product.

Recruiting is the next one. It’s very hard to recruit in the Valley these days, so what is the recruiting strategy. That has to be included in there as well. “This is what we’re looking for over the next three to six months. These are the recs that we’ve filled.” That’s another important thing to fill in. Cash, what is your cash balance? How many months of cash do we have left at the current burn or on the projected burn?

Development on operating plan is critical, and that doesn’t go into the monthly updates, but it informs a lot of the inputs into the monthly updates because you have to work with somebody on an operating plan at the beginning of the year that then becomes the operating plan for the business on account of which then you can measure how you’re performing against what you’ve got planned for the business. All of that factors into what’s included in the monthly updates.

I think those are things that I look for for the most part. I’m sure there’s things that I’m missing. Marketing is another thing. You can break down marketing as well in terms of lead generation and all that, but that goes into the sales piece that I mentioned earlier.