Venture Capital Should Hire Project Managers
Editors note: I am not sure why the word “Manager” is spelled wrong in the title, it is correct here in the title.
The Project Management Institute “defines a project by its two key characteristics: it is temporary and undertaken to create a product, service, or result that is unique.” If we look at the definition of Venture Capital, via a quick Google search we get: “capital invested in a project in which there is a substantial element of risk, typically a new or expanding business.” Looking at those two characteristics, the Venture Capital industry could benefit from hiring more project managers.
The pain points that the Project Manager can solve for a Venture Capital portfolio can focus on the back office build out for the Venture Capital portfolio investments. The proliferation of Infrastructure as a Service and Software as a Service solutions, allows the Venture Capital firm to deploy a similar set of tools across their investments. The Project Manager employed by a Venture Capital firm would manage the vendors that will be providing the setup to the portfolio companies. This would allow the Venture Capital firm to create standard reporting and economies of scale in order to save infrastructure setup costs for their investments.
In addition to managing the back office setup, the Project Manager employed by a Venture Capital firm is also available on an ad-hoc basis to the portfolio companies. Instead of a portfolio company going out and hiring the Project Manager, the Venture Capital firm can offer this service to their portfolio companies. This gives the Venture Capital firm a liaison to the investment and can provide a homogeneous level of service across the portfolio. This service would be designed for the investments that are in the seed stage or incubator. A firm that has gone to Series A and beyond, has grown enough to support an in house team of Project Managers.
In addition to the deployments that the Project Manager will perform at the Portfolio companies, the Project Manager could also assist in the area of risk management. The Project Manager could research and maintain the risk list across the portfolio companies. This would span economic indicators as well as internal issues. The Project Manager would serve as the “independent” risk manager to the Portfolio Companies and report back to the Venture Capital firm. The adage that “Bad news does not age well” would assist all parties in recognizing issues and addressing them early on. While it is human nature to shield bad news from a higher up, we can know that transparency helps save companies.
I have been fortunate enough to have passed the PMI certification and have run large projects that are new and helped expand the business. These projects have required financing discussions along with a great deal of human resource management. If we ever have the chance to sit down, I can explain that challenge in person, but if you see my LinkedIn profile you may understand the challenges I faced. Combining my Project Management skills with my love of Product Management (Pragmatics training completion), I still have a desire to combine my skills into the Venture Capital business. It has been a dream for over 28 years.
Since 1992, I have wanted to work in the Venture Capital business. The traditional road for me to get to the Venture Capital business did not happen. I will spare you the details of my “Short sighted” applications to law and business school along with the lack of calculus fundamentals that were never learned in high school, but after 28 years of working in two startup companies and morphing into the project management world, I believe that the Venture Capital business could benefit from my skill set.
In addition to helping the Venture Capital firm run the “project” to turn the startup into an exit strategy, I can also use my background to help create the necessary back-office infrastructure. This includes the technology components and the processes required to scale a company. I see so many startup companies start with 2 guys in a garage and then they grow to double-digit people. Once that hits the enterprise processes are implemented, which become painful. For example, password change procedures are implemented late and now people complain “Why do we need to do this?” Work at home policies are implemented and people start to say “This place isn’t what it used to be.” If you have a project manager in place with these startup companies s/he can identify the risks with the startup and implement the required actions early in the lifecycle of the company. Thus creating less headaches down the road.
One of my favorite parts of Project Management which I believe the Venture Capital business could benefit from is the networking that occurs in Project Management. Project Managers need to have a deep Rolodex and continue to add to it. I enjoy the industry events, after work meetups and even more enjoyable to add the traditional Golf activity for networking. Yes, I know that nobody in Silicon Valley cuts a deal on a Golf Course any more, (See NY times article titled: Wheels and Deals in Silicon Valley) , but if they do then I am your guy to send out on the course. Furthermore, I do not have any children, therefore I can be sent across the world to manage a “deal/project” and save the partner from the wasted time that occurs getting to the location only for a short intervention. Regardless of who you add to your team, make sure they enjoy “working the room” to find the next deal or organically find the next risk occurring in your deal.
At this time in life, I now have solid Project Management skills, sales skills, and more street smarts than I did 28 years ago. Furthermore, my interest in Venture Capital has never waned. To this day I have tried to make the career decisions that give me an alternate path to the Venture Capital Industry. Now is the time to see if the Venture Capital industry sees the value of Project Management as I do.