CONTENIDO Y ESTRUCTURA DE UN MANUAL DE PROCEDIMIENTOS

This phase is both concerned with the monitoring and the mentoring of the portfolio companies. In typical cases, monitoring and mentoring is realised by investor’s board representation and associated with financial information on a regular basis (Mitchel et al. 1995; Nathusius 2001). According to research results for the VC market in the UK, Mitchel et al. (1995) mention that core financial statements include the balance sheet, the profit and loss and, furthermore, the cash- flow statement. Approx. 25% of the survey respondents expect an additional performance summary. The majority of these sample members receive the reporting package on a monthly basis (Mitchel et al. 1995). Brinkrolf (2002), who was research active regarding VC firms' management support in Germany, agrees with the results from Mitchel et al. (1995). He reports that 81% of the survey respondents expect a monthly reporting package and only 7% on a quarterly basis. Hummel (2011b), who examined the German PE and VC market, inter alia, during 2006 and 2009, mentions that approx. 75% of the survey respondents expect monthly reporting packages. Thus, he agrees with the research results of Mitchel et al. (1995) and of Brinkrolf (2002). In that context, board representation obviously plays a significant role in the interaction between investors and entrepreneurs. Kranz (2008), who examined the management support of PE and VC firms in Europe, reports that almost every survey respondent is represented in the board of the portfolio company. Moreover, the survey respondents have informal contacts or participate in management meetings. Moon (2006) argues that PE investors are represented in the board in order to interact with the executives in a close relationship and an open discussion level. This strong link between investors and portfolio companies is also required to intervene immediately in the case that the portfolio company does not perform accordingly (Brinkrolf 2002).

With regard to typical mentoring areas of venture capital firms, Brinkrolf (2002) refers to strategy, finance, organisation and operation, networking and cooperation, and finally human resources. The literature base shows that market members are most concerned and involved in financial monitoring and strategy development. This applies both for VC firms and for universal PE investors and regardless of the examination perspective. The examinations in that respect are either based on an investor or an entrepreneurial perspective (Brinkrolf 2002; Pankotsch 2005; Sobczak 2007; Wexlberger 2011). Furthermore, Klier et al. (2009) supplement that investors would be also focused on selling non-core assets and on the optimisation of the working capital.

Nevertheless, the degree of involvement in the PE and VC market varies even though the market members are overall strongly connected to their portfolio. In that respect, Brinkrolf (2002) distinguishes six different influence intensities from no involvement, information related requests, the consultation of portfolio companies, decision making, full decision making, up to the full management responsibility. With regard to the support extent, results in the literature base are not consistent. It is overall rather difficult to determine reliable support durations of equity investors, which obviously differ according to different examination perspectives. In that respect, Röper (2004) calculates an average support duration of 26 hours on the level of lead investors and 14 hours on the level of co-investors per month. According to his survey, these periods compromise support regarding strategic planning and networking, the role as a confident and mentor, and additional activities regarding operations, product development and crisis management. On the other hand, Brinkrolf (2002) calculates an average support duration of approx. 16 hours on the level of lead investors per month. These different results could also be dependent on the different examination perspectives of the research studies, either investor or enterprise-owner based. In addition, Wexlberger (2011) calculates an average support duration of approx. 29 hours per month on the level of CVC firms, approx. 22 hours per month for independent investors and approx. 13 hours for public investors. These different results show that it is rather difficult to determine a reliable average support duration in the market. These durations are obviously not only differing according to the particular examination perspective but, moreover, are dependent on the particular type of investor. Overall, these results should be considered in relation to the specific sample and perspective. Thus, they are not valid for the entire PE and VC market.

In terms of a simplification, the market is divided into hands-on and hands-off investors. In that respect, the research results of Zimmermann and Fischer (2003) show that approx. 50% of the survey respondents support their portfolio companies hands-on between 1999 and 2001. A more detailed view shows that approx. 58% of the independent investors are supporting hands-on beside a proportion of 10% in the case of the MBGs. Interestingly enough, 65% of early-stage investors are actively involved beside a proportion of 35% in the case of later-stage investors (Zimmermann and Fischer 2003). Early-stage investors obviously try to minimise the comparatively large default risk by an intensified support. Achleitner et al. (2006) report a similar involvement between 2002 and 2004, followed by an increasing number of actively involved investors between 2007 and 2009 (Achleitner et al. 2010). Hummel (2011b) supplements these research results and refers to the remarkable development in the case of the

MBGs. Their support effort increased significantly from approx. five hours in 2004 to 19 hours in 2009. This development was accompanied with both an increasing number of personal contacts and an increasing awareness regarding portfolio companies strategy. Even though back- financed by public institutions, MBGs obviously reacted according to their dramatic loss proportions of 38% in 2008 (BVK 2009a) and 53% in 2009 (BVK 2010b).

The investment period of equity investors is finalised by the so-called exit. By selling the equity share, the PE investor tries to realise sufficient profits (Thum et al. 2008). This issue is presented in the subsequent section.