Grove Street Advisors Case
Grove Street Advisors
Grove Street Advisors, should shift its approach to a mainstream funds-of-funds. They have already proven themselves to be widely successful with selecting the right funds to invest in with their customized funds of funds approach. By slightly altering its approach Grove Street Advisors will be able widely increase its success in the venture capital industry. With David Mazzas ability and experience in executive search practice in the venture capital industry and the companys great track record, the company seems to have a great shot at selecting the correct emerging fund managers to back. By selecting the correct fund managers Grove Street will have access to the best funds in 10 years and will then be able to provide its clients with even more significant returns. Once Grove Street has gained access to these top funds they will be able establish a long lasting relationship with them and continue to enjoy the rewards of high returns. This option give Grove Street some risk, but a high return, along with a sustainable model of growth and profit.
This choice seems superior to the other choices for a variety of reasons. First of all reviving direct investment seems to be to risky of a proposition. Grove street advisors had already attempted to establish itself in this market and backed out. In addition they would have to open up a separate organization and hire more staff. Direct investment would require to much of a change in their company structure, with little guarantee of a return.
Another option for Grove Street Advisors was going small. This option while including limited risk, seems to provide a limited return. Here while Grove Street is all but guaranteed clients, they also will have trouble with the scalability of their model. It is unlikely that with its current staff GSA staff they will be able to keep track of a large number of smaller clients.