Exit Strategy: Insights from Monica Dodi, manager of the Women's Venture Capital Fund
Yesterday, we had an opportunity to visit the United States consulate in Hamburg for a special event about women and entrepreneurship. The keynote speaker was Monica Dodi, founder of the Women's Venture Capital Fund.
The insight (and jargon-filled) evening was delightfully rounded off by drinks and pretzels.
Ms Dodi brainstormed a variety of key points which venture capital funds look for when deciding on whether or not to bestow their financial largesse and managerial expertise. The result was a whiteboard completely filled with a variety of important terms:
A major distinction discussed was between companies whose founders are looking to continue owning and managing what they create and those whose founders are comfortable pursuing a strategy designed to bring their company to market for cash. If the goal is not ultimately to cash out, venture capital is probably not the right instrument.
Besides obtaining a return on their investment either through an initial public offering or through a merger or acquisition, venture-capital funds are highly interested in mitigating their principal risk and focusing on a 7 to 10 year investment cycle.
So, besides the management having largely women involved, what does the Women's Venture Capital Fund look at when it is making decisions about investments?
Here is the list you've been waiting for!
(1) Management expertise
(2) Customers & the Total Addressable Market (TAM)
(4) Value proposition of the product
(5) The Business Plan: Revenue projections, plan to go to the market, assumptions (worst/best), review the constraints (e.g., supply chain risks)
(7) Ability to pivot/change
(8) Goodwill & Management track record
(9) Competition (direct, indirect)
(10) Business/strategic partners
(13) Capital needs