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What Changes as Company Grow Operating Characteristics |
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By Terry Collison, Blue Rock Capital. Used by permission.
TERRY COLLISON is a co-founder of BLUE ROCK CAPITAL. Previously, through 11 years of work as an advisor to entrepreneurs, young companies, and investors, Terry helped a wide variety of companies develop commercialization strategies, management teams, marketing programs, formal business plans, and new financing. BLUE ROCK CAPITAL makes venture capital investments in high-growth seed-stage and early-stage companies from New England to the Carolinas.
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The Start-Up
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The Growing Venture |
The Mature Company
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Cash Position |
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Limited financial resources ... need to address basic capital and cash-flow issues |
Increased cash-flow and requirements... some borrowing capability ... need to generate additional capital |
Financial stability, slower growth, bankable Sellable? |
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Organization |
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No specific organizational structure |
Organizational structure forms around individual personalities |
Formal organizational structure defined by functional needs |
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Communications |
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Direct communication ... "one-on-one" style |
Increased demand for lateral communication (geometric growth in need for information) |
Increasingly formal communications – various methods |
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Definition of the Business |
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Few, if any, stated policies |
Policies evolve from practices (and are often conflicting) |
Policies get documented for consistency and fairness |
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Strategic Focus |
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Emphasis on reaching the market and generating revenue |
Emphasis on growth and raising capital to create and sustain growth |
Emphasis on spending and cost control, less emphasis on R&D and growth strategies |
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Compensation Program |
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Compensation based on need (and availability) |
Compensation based on need but often administered according to personal or subjective factors |
Structured compensation based on internal and external equity considerations |
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"How things are around here" |
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Organizational culture mirrors the founder's style and values |
Organizational culture becomes ill-defined as new people join the company |
Organizational culture gets redefined and is set as foundation for strategic planning |
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"Roles & Holes" |
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Duties and responsibilities are loosely defined -- everybody wears multiple hats |
Duties and responsibilities are defined by the incumbents ac-cording to current priorities as they are perceived |
Duties and responsibilities are officially defined according to current and future organizational needs |
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"Center" |
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Clear sense of organizational purpose |
Duties and responsibilities are defined by the incumbents ac-cording to current priorities as they are perceived |
Organizational purpose is formally redefined through strategic planning |
