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The
Investment Strategy & Plan plays a pivotal role in
providing a certain amount of structure and focus to investment activities
and decisions. Such a plan should include a statement of the investment
goals, the capital available for investment, the markets for those funds,
the investment guidelines, the type of investment (i.e. seed, start-up
or intermediate), the preferred method of investment (i.e lead or secondary),
the portfolio management approach to be used, and the liquidity strategy
to realize value.Additionally, it is important for the investment strategy
to address the nature and type of risk and the related returns that
are acceptable to the organization based on its value accretion goals.
One aspect of managing this risk is to have as clear a picture as possible
of the minimum and maximum investment that the organization is willing
to make in each opportunity based on achieving specific performance
levels or targets. This up-front investment forecast provides a useful
tool in assessing the future draw on capital and provides a rule of
thumb to support portfolio valuation scenarios.
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