The second stage of the VC fund lifecycle is the growth stage (investing is the first stage).

In the growth stage, the fund’s portfolio companies are working hard to build out their operations and create significant revenue streams. While some companies will fail in this phase, others will successfully acquire customers and build scalable businesses.

The challenge that VCs face in this phase differs from that of the investing stage. A VC’s focus shifts from identifying winners to managing growth. Managing growth means making sure that the company has the right resources at each stage of its development. By resources, I’m referring to both capital and people (e.g., advisers, executives and staff). What complicates matters is that the resources required for one phase of a company’s development may not be the right ones for another, requiring the management team and the staff to constantly evolve.

Furthermore, the best VCs also continue to make important introductions at this phase. If the management team needs to connect with a key customer, partner or potential employee, the board should leverage its rolodex to help.