The annual meeting looks simple, but the actual implementation is not simple. As a parent fund, we often have this doubt: how to hold a wonderful annual meeting? GP only attends one annual meeting (their own) , and LP attends more than a dozen meetings a year, how can we make the annual meeting meaningful?
So from the perspective of LP, what will happen to the GP Annual Meeting?
Before I elaborate, I would like to talk about the necessity and purpose of the annual meeting.
First of all, although some LPs may not agree that GP must hold an annual meeting, especially for small funds, it is even more unnecessary. Some LPs believe that other communication methods are equally effective. For example, the GP visits on a regular one-on-one basis. If the situation of the fund does not change too much, it is sufficient to meet once every 18 months. But as far as we are concerned, regardless of the size of the GP’s management or the length of its establishment, we believe that all GPs should hold annual meetings.
Second, when planning the annual meeting, keep in mind what the purpose is. In general, the annual meeting is to report investment progress and related situations to LP. The quarterly report and financial report are part of it, but the true value of LP’s participation in the annual meeting lies in networking and obtaining information outside the report. (Otherwise, should we not bother Easy Songzhai read the report at home?) Therefore, when you report the company’s situation and portfolio information, highlight the content that can’t be read in the form to show the strength of the organization and obtain LP recognition.
Here are the trilogy of the annual meeting: content, form, organization.
Content: Close to the investment theme, display key information
The annual meeting should be an open and frank conversation. The content of the annual meeting should be closely related to the investment theme and depend on the number of years held by the team, strategy, and investment portfolio. For example, for new funds or first-time funds, it is too early to discuss liquidity-related topics.
1. Portfolio. The situation of Portfolios is obviously the topic that LPs are most concerned about. After all, the situation of Portfolios directly affects returns. Because there is always a layer of veil between the LP and the underlying projects, the GP organization of the annual meeting is a better way to help the LP understand these projects. If the GP’s portfolios are more diverse, they can be classified according to categories.For example, invite teams, CEOs, and special guests to give speeches, increase the stove talk, Panel round table, video links, etc., but make sure these forms are meaningful. For example, in the group discussion, don’t just repeat the clichés or general issues. You should set challenging issues to encourage everyone to think.
1. GP team. It is a good choice for the guests to hear different voices from the GP team. The sharing guests can be the partners who lead the transaction and the new investors involved in the transaction, or the CFO responsible for financial reporting. For LPs, they do listen to what the sharing person says, and they also think about the meaning behind the sharing guests. If the GP emphasizes an equal partner culture, but one of the three partners accounts for 95% of the share, it is difficult to say that it has an equal partner culture.
2. CEO. I like listening to the CEO of Portfolio very much. The CEO’s speech can often directly point to the main points of the project, and can better understand why GP is so excited about this investment. However, due to the diversified asset types of LP investments and the large geographical span, their knowledge of professional fields may not be as good as that of GP. Therefore, the CEO who is best invited must have a good overview ability and the language should be concise and direct.
The general CEO’s speaking time is controlled within 10-20 minutes, and the remaining minutes are used for Q & A. If there are multiple sub-funds, the CEOs invited should be diversified. Some CEOs come from previous funds and some of them have great potential in new investments.
Do not invite too many CEOs, generally not more than 10, but not just one. After the speech, try to invite the CEO not to leave immediately. If you can drink a few cocktails with the LPs and talk about the company’s progress, it will be more helpful for the LP to understand Portfolioos.
3. Information. Preparing relevant materials for the annual conference in advance can better improve the event experience:
(1) The content of the annual meeting on the LP seat allows the LP to focus more on sharing the content, rather than picking up the scratchy note of the pen.
(2) Usually only some people in the LP team will participate in the annual meeting, so the electronic version of the meeting materials is sent to the LP ) , it will be more convenient for the LP team to share these updated information.
(3) Sometimes the GP can be included in the materials before the information shared at the meeting. I was impressed by a GP who only shared information about the source of returns and new investments at the meeting.Relevant content, but provides a comprehensive one page overview, including the proportion of equity in each investment, investment cost, current value, current business, new progress, revenue and other growth.
Organization: schedule time in advance and plan the details reasonably
1. Schedule / attendance. High attendance can bring positive energy and represent more potential connections and opportunities, which is what LP wants to see. In addition, if all work of an annual meeting is performed by the GP, good attendance can also encourage.
To ensure attendance, the GP can agree on the timing of the annual meeting in advance. Some GPs we cooperated with even released the time and place of next year at the end of this year’s annual meeting, which is convenient for later planning and arrangement of LP.
In addition, since the LP may cooperate with multiple GPs at the same time, it is not excluded that the two GPs hold the same annual meeting. At this time, it is necessary to coordinate time with each other to ensure that the LP can participate in different annual meetings at the same time. We have even encountered different GPs in the same area who arranged the two annual meetings together, so that the LPs invested in the two companies can merge their trips and be considerate.
2. Location. LPs have different opinions on location. Some LPs prefer tall locations, while others prefer simplicity. I have had a good experience with both types, although in the end I often win “conveniently first”. Compared to the cramped feeling of putting a computer, coffee, and water cup on your legs, arranging your desk is an extra bonus. If there are many participants, it is recommended to stay at the hotel and negotiate the price in advance. If the hotel and the venue are not together, a shuttle bus can be arranged or a special car can be provided.
3. Duration. The length of the meeting should match the content of the meeting and allow enough time for discussion. Most people ca n’t always stay focused during the 8-10 hour lecture, so the GP does not have to plan a full-day meeting. Instead, a banquet can be set up the day before the meeting and scheduled in the morning, noon or afternoon Lecture and finally prepare a cocktail party. If your LP is small or the fund is new, meeting times can be shorter and more flexible.
4. Food. When planning the annual meeting, GP can combine different flavors to prepare food, either fried chicken or vegetable juice. Sometimes LP may say that he likes fruit juice and turns around and swallows fried chicken. A short lunch break or tea time can also be used to build connections. I’ve heard all kinds of feedback about the formal banquet. Some said that the discussion at the dinner was very meaningful and interesting. Others said that it was difficult to sit down and talk to many people. Therefore, if you decide to sit down and eat, GP may have to think twice about seating arrangements. After all, there are teams,CEO, and LP.
5. Gift packages for the annual meeting. LP knows that it is himself who pays for the annual meeting package, but always likes to pretend to forget this at the annual meeting, but instead looks forward to what is in the package.
The gift bag can be around the GP brand of its own cooperation, such as hoodies, sports goods, etc. LPs often take pride in wearing the GP’s periphery; of course, it can also be a sample of products from the Portfolio company Especially physical samples of consumer goods companies. But this is not so friendly for software and technology companies.
If you plan to give something heavy or large, but LP is unfortunately far away, you can ask to send it back. Others may disagree, but most of the gifts I receive make me like it … except for those wide T-shirts that can only be tied to the high shelf, after all, I am only 1.6 meters tall.