NVCA Today

Time is the most precious resource to the typical VC. It seems like there is never enough time to get through everything you want to do personally and professionally. Maintaining the current portfolio is a full time job. Sourcing new deals is a second full time job. Add to that LP communications, financing and exit transactions, and general operational matters and it's no surprise that VCs find themselves stretched very thin. In addition to all your job requirements, it seems everyone wants a piece of you. Charities want you to serve on their boards. Business schools and law schools want you to teach classes. Organizations want you to sit on panels.

The good news is that you already know where to find more time. You just may not have looked recently. VCs urge their portfolio companies to identify their core strengths and outsource or delegate most everything else. But, when it comes to managing their own businesses, the lesson is sometimes forgotten.

Despite the severe constraints on your time, you're probably still doing some things that may not be the best use of that very limited resource. For example, some VCs are still signing up to serve as the stockholder representative after the sale of their portfolio companies. While there are obviously circumstances in which this may make sense, taking the job means committing to a volunteer job that has unknown time requirements. It's also not a VC's core business. Is working through balance sheets to determine the final working capital adjustment amount or helping other stockholders who have lost their stock certificates really the best use of your time? Of course, not. LPs didn't invest in you because of your ability to manage post-closing administrative work and disputes. They invested in you because you're really good at identifying great companies and helping them grow.

This is one example of many things you may be doing that you could get off your plate. It just happens to be significant because of the unknown and often substantial time commitments required (and the job keeps getting harder with increased usage of earnouts, longer escrow periods, larger escrows and other similar complicating terms). While you and your team could do jobs such as being a shareholder representative (and probably do them pretty well), that doesn't mean you should. The real analysis should not be whether you can do these sorts of tasks, but rather whether that is what is the optimal use of your limited time. Analyze the costs and benefits of alternatives and think hard about what use of your time is really in the best interests of your fund and its investors. LPs want you to maximize returns on the fund. Taking you away from focusing on finding and growing companies is working against your LPs' best interests.

So, consider taking a different approach. Protect your time. Instead of using lots of hours on post-closing administrative work, use that time to read an extra hundred business plans increasing your chances of finding that next great company. Practice what you preach to your portfolio companies and focus on your core competencies and delegate or outsource the rest.

Paul Koenig is co-founder and managing director of Shareholder Representative Services (www.shareholderrep.com) , which serves as a professional shareholder representative following the acquisition of a VC-backed portfolio company.