You’re starting a Venture Capital internship. What should you know about portfolio company management? (2024)

The investment thesis is the rationale behind why a VC firm invests in a certain startup. It outlines the problem, solution, market opportunity, competitive advantage, and expected return of the investment. As a VC intern, you should familiarize yourself with the investment thesis of each portfolio company, as it will help you evaluate their progress, challenges, and potential. You should also be able to communicate the investment thesis to external stakeholders, such as co-investors, partners, and customers.

The board of directors is a group of people who oversee the strategic direction and governance of a portfolio company. Typically, the board consists of the founders, the CEO, and one or more representatives from the VC firms that invested in the company. As a VC intern, you may attend board meetings as an observer or a note-taker, depending on your role and seniority. You should pay attention to the board dynamics, the key decisions, and the feedback given to the management team. You should also prepare and review the board materials, such as financial reports, metrics, and updates.

The value-added services are the additional benefits that a VC firm provides to its portfolio companies, beyond the capital. These may include mentorship, networking, recruitment, marketing, legal, operational, and technical support. As a VC intern, you may be involved in delivering or facilitating some of these value-added services, depending on your skills and interests. You should aim to build trust and rapport with the portfolio company founders and team members, and understand their needs and goals. You should also leverage the resources and expertise of your VC firm and its network to help the portfolio companies succeed.

The exit strategy is the plan for how a VC firm will realize its return on investment from a portfolio company. The most common exit strategies are acquisitions, mergers, or initial public offerings (IPOs). As a VC intern, you should be aware of the exit strategy of each portfolio company, as it will affect their growth trajectory, valuation, and exit timing. You should also monitor the market trends, the competitive landscape, and the potential acquirers or partners for the portfolio companies. You should also help prepare and execute the exit process, such as due diligence, negotiations, and closing.

The portfolio analysis is the process of evaluating and comparing the performance and potential of the portfolio companies. It involves collecting and analyzing data on various metrics, such as revenue, growth rate, profitability, customer retention, market share, and impact. As a VC intern, you should be able to conduct and present portfolio analysis, using tools such as spreadsheets, dashboards, and reports. You should also be able to identify the strengths, weaknesses, opportunities, and threats of each portfolio company, and provide recommendations for improvement or action.

The portfolio diversification is the strategy of investing in a variety of startups, across different stages, sectors, geographies, and business models. It aims to reduce the risk and increase the return of the VC portfolio, as not all startups will succeed or generate the same returns. As a VC intern, you should understand the portfolio diversification of your VC firm, and how it aligns with its vision, mission, and values. You should also be able to assess the fit and potential of new investment opportunities, and how they would complement or diversify the existing portfolio.

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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