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Increasing VC returns by understanding Talent -
The first sign that a management team is not performing at optimum is when market conditions are blamed for loss of productivity.
The questions that investors should ask their management team is whether the competition was able to monetize on the opportunities in the given market conditions.
Lesser experienced management teams have a tendency to fall prey to confusion when they see a decline in orders, leading to chaos.
Our research suggests that of 64 management teams facing a financial crisis, 36 companies had line managers who reported a lack of corporate direction. From a standpoint of human behavior, this can be attributed to dissent amongst the management team.
In such times, possible
opportunities are missed as the team is preoccupied in solving personal differences. At this crucial time, if the VC has prior knowledge on the behavior of the team, the VC can use preventive measures ahead of time to secure their investments....