VDP-102 [Governance] Portfolio Management Process

One liner

An ongoing process to manage the growing portfolio of the VitaDAO projects in an effective and efficient way, helping to execute them and to support all decision-making required.

Motivation

Since its foundation, VitaDAO has organized itself to source and assess opportunities to fund longevity biotech ventures with deal-flow processes spanning from the entry of an opportunity into our funnel to on-chain vote on our platform and decision to fund. Thanks to these processes, VitaDAO has funded (directly or with partner organizations like Vitality Healthspan Foundation, VHF) about 20 projects, including startups, spinoffs, and academic projects developing some of the most promising interventions in longevity. As the number of projects in VitaDAO’s portfolio increases, so does the importance to track and control their execution and provide value to founders thanks to VitaDAO’s wealth of expertise, with a structured portfolio management process.

Details

This proposal aims at initializing this process with a few best practices and practical tools.

The following tools are proposed:

• Project Portfolio Register (PPR)
• Quarterly Project Reviews (QPR)
• Milestone Tracking File (MTF)
• Budget Contingency File (BCF)
• Project Portfolio Dashboard (PPD)
• Project Portfolio Mapping (PPM)
• Projects Summaries (PS)
• Portfolio Repository (PR)

The following staffing profile is proposed:

• Project Portfolio Administrator (PPA)
• Steering Committee

These items are detailed in the next sections, as well as:

• Tools implementation
• Budget
• Success metrics

Importantly, because this process is new, it has not been explicitly taken into account in already agreed term sheets. Thus, the level of implementation of the process will be discussed with each project taking into account agreed information rights. This dialogue will build experience to include in future terms investor information rights covering the portfolio management process in a way that is mutually beneficial for both VitaDAO and the funded entities.

Project Portfolio Register

This is a list of the funded projects, with all their relevant features, useful to have a view of the full portfolio at a glance. Each line in this file shall include the following objective information:

• VDP number
• Name of the project
• PI/CEO
• Type
• Entity
• Country
• Funding Amount
• Payment: whether it has been made, or if is committed
• Deal: whether the terms are IP-NFT or equity
• Application: therapeutics, diagnostics, digital health
• Indication: go to market indication
• Hallmark of aging: DNA repair, metabolism, …
• Mechanism of Action (MOA): how it works in one line
• Product: small molecule, mab, cell therapy, supplements, app, …
• Stage: preclinical in vitro, preclinical in vivo, clinical phase 1, …
• Start date
• End date

Subjective information can also be useful:

• Opportunity class: high, medium, low
• Risk class: high, medium, low
• Lifespan extension potential: high, medium low
• Healthspan extension potential: high, medium low

These subjective assessments could be asked and extracted from senior reviews.

Each shepherd is responsible to fill in this file once her/his project is funded.

This file is already available here.

Quarterly Project Reviews

This review takes place at the end of each quarter.

A representative from each funded project is invited to join and present their progress according to an agreed agenda, where each project is assigned 15-30 minutes.

Each funded project shall provide a minimum of two slides, according to a VitaDAO template:

• 1 summary slide including
  • Budget allocated, budget spent
  • Achieved milestones, and upcoming milestones forecasts
  • Any outstanding issues to be discussed
• 1 results slide with
  • Recap of achieved results
  • Achieved results since the last QPR

The format includes a 10-20 minute presentation followed by discussion.

A steering committee composed by VitaCORE members (see below) is invited and empowered to make decisions during the meeting, within limits, in particular in terms of budget (see below).

A panel of senior experts is also invited to join the review and provide recommendations. This could be VitaDAO senior reviewers and people from a future VitaDAO advisory board.

The number of people should be sufficient to have relevant feedback and decisions but not too high as to hamper the process and burden. A ballpark figure is 5 to 10 people.

Key decisions, including scope changes, and recommendations are tracked in minutes of meeting. Actions are registered in the MTF, described below. Budget changes are tracked in the BCF, described below.

For scheduling simplicity, the QPR could be divided into 90 min sessions based on the type of projects, for example:

• Startups session
• Academic projects session
• Spinouts session + anything else An alternative approach could be based on the scope of projects, for example:
• Small molecules
• Cell and gene therapy
• Diagnostics

A different cadence, for example 6 months, or different level of information could be considered based on projects’ specific constraints. Indeed, while the objective is full coverage of the progress of the VitaDAO portfolio across all its funded projects, it is important to take into account their specificities, including differences between startups, spinoffs, and academic projects, such as:

• mature startup, requiring less guidance
• stealth startups, having stronger confidentiality constraints
• some projects not seeing the value of this process and not having any contractual requirement to follow it

This process is coordinated by the PPA.

Milestone Tracking File

This file includes all the milestones of all projects in one place.

Each project typically includes at least three milestones, kickoff, mid-term progress, and closure.

Each milestone shall be identified with:

• Project name
• Milestone name
• Milestone criticality (from minor to go / no go)
• Due date
• Forecast date
• Actual completion date
• Status: whether work towards the milestone is not yet started, or is ongoing, or completed, or canceled.
• Status: including any blocking point and outstanding action to unblock

This file can be used as an input to produce portfolio planning KPIs, such as number of milestones completed vs forecast or average delay.

This process is taken care of by the PPA.

Budget Contingency File

The budget needs of each project might evolve as it is executed. One project might run into issues, which require extra funding in order to reach the targeted inflection point to raise the next tranche. Another might fail a critical go / no go milestone, and therefore be canceled, therefore freeing funding that can be used for other projects.

Therefore it is useful to foresee a portfolio contingency pool of order of 5-10% of the total reference budget of all projects in the portfolio.

Each quarter, as projects report their status, or occasionally when major budget events, as in the above examples, require attention, the funding available in the portfolio contingency pool needs to be updated. This can be done with a file where each line includes:

• Project name
• Reference budget
• Delta budget
• New budget
• Reason for delta
• Approved by who

Large project budget delta, for example above 25% of the reference budget would need to be governed. Medium deltas, for example between 10% and 25% would need approval by VitaCORE, which meet weekly. Small deltas, for example below 10% could be decided with lower-level mechanisms.

This process is taken care of by the PPA.

Project Portfolio Dashboard

This dashboard should be available to the broader community to engage with. Ideally, anyone within the DAO should be able to a) see what's going on; b) find projects they think they can contribute to; and c) reach out to whoever(s) is leading that project. Here are two examples:

• Each project is associated with green/yellow/red status color flags along the classic project management dimensions of budget, planning, results. Each of the color flags should be motivated with a one-liner, based on the outcome of the latest QPR.
• See https://media.licdn.com/dms/image/C4D12AQEj_rfukzIsmQ/article-cover_image-shrink_423_752/0/1648203957593?e=1692230400&v=beta&t=ebrIZyOFfPyr187foV2VWH4-cSmmD04i1YHMg-Fm6kQ

Project Portfolio Mapping

This includes graphics that synthetically represent the portfolio composition based on key variables. For example:

• Risk/opportunity mapping: is the portfolio balanced or skewed?
• Longevity/healthspan potential mapping: is the portfolio balanced or skewed?
• Hallmarks of aging coverage: do we have a balanced coverage or are some areas over/under represented
• Companies vs. spinoffs
• Geography

This mapping is based on information from the Project Portfolio Register.

It can be made available to token-holders to help inform their decisions on new projects, for example to rebalance the portfolio, or to focus on an area of interest.

Project Summaries

Each funded project shall have a non-confidential project summary that can be shared publicly. This already exists for many VitaDAO’s project, as a project webpage, which should be generalized: https://www.vitadao.com/projects

In each of these webpages, the “Latest Project Updates” section gives information on project progress. The slides from the quarterly reviews for a given project can be tapped into to populate this section, or the slides themselves could be uploaded, pending confidentiality constraints.

These web pages could also be converted in a VitaDAO portfolio booklet, for example in PDF format, downloadable from our internet site.

This task is already partly covered by the Community and Awareness WG

Portfolio Repository

A dedicated ““Project Portfolio Management” folder on VitaDAO’s G Drive in order to:

• Store / manage the above proposed tools
• Store deliverables and relevant ontology This folder already exists (under a different name) here and it is partially populated with several project folders.

Project Portfolio Administrator

The Administrator is a very well organized person with a strong focus on execution and quality, accountable towards the Steering Committee, see next paragraph. Initially, Eleanor Davies is proposed for the Portfolio Administrator role, with the support of Paolo Binetti, both already with VitaDAO.

• Eleanor has demonstrated project management skills in the VitaDAO Dealflow Working Group, and has experience operating high-performance start-ups, fund operations, and consulting for healthcare and biotech transactions
• Paolo has about 20-year industry experience in project/program/portfolio management in research and development and is a certified project management professional (PMP)

Other VitaDAO contributors are welcome to support specific tasks.

After a 3 month period starting from the snapshot approval, these roles will be confirmed or not based on process deployment status.

Steering committee

Another important component is the Steering Committee who will make decisions based on projects’ progress, including but not limited during quarterly reviews. This is a small committee of people who know the projects well, have competences and experience, have sufficient time availability, and are empowered: this could be an uneven subset of VitaCORE members, for example 3 or 5.

The Steering Committee will seek advice from senior experts from the VitaDAO senior reviewers pool and from a future VitaDAO advisory board, on a need basis.

Tools implementation

These tools can be implemented using Google Workspace, or the equivalent free software. Concretely:

• PPR, MTF, BCF, PPD can be done with Sheets (for data) and Slides (for data visualization)
• QPR can be done with Mail and Calendar (for meetings organization), Slides (for the presentations), and Docs (for MoMs)
• PS are web pages, or equivalently Docs or Slides

This requires a little work to prepare templates, but otherwise no software development or licence costs.

Some tools could also be implemented with more modern software, such as Asana, which might be more efficient but require licences.

People in the organization are familiar with different options, so we can quickly select the best options and deploy.

Budget

Performing portfolio management administration will require an initial and a recurring effort.

There are two main initial (non-recurring) cost items:

• Setting up the tools
• Training the people involved These costs are estimated to be minor with respect to the recurring costs below.

There are three main recurring cost items:

• Administration could have a yearly cost of about 1% of the budget of the running projects. For example, assuming 15 projects with an average budget of 200k for an average duration of two years, therefore a total budget of 3M, that would mean about 30k per year. This budget excludes the management activities for each specific project, which are the responsibility of their dedicated Project Managers, EIR or CEO, whose cost is already covered by their specific project budget.
• The contribution of senior experts involved at quarterly reviews. Some of them would come from VitaCORE members, who already have a general compensation, but others would need to be specifically compensated, representing an additional cost item, estimated at another 1%.
• Software licences, if any (see above).

Note: assuming Eleanor Davies for the administrator role, this proposal does not require allocating an extra budget on top of the compensation that she already receives from VitaDAO.

Success metrics

These are of two types:

• Effectiveness KPI, covering the classical OTOCOQ (on time, on cost, on quality) project management expectations in aggregated manner, such as achieving milestones on time, staying within budget, successful project completions.
• Efficiency KPI, covering the portfolio management process itself, such as its actual cost, stakeholder satisfaction (ensuring that we do not uselessly burden project managers or entrepreneurs), etc.

Return on investment is another important portfolio KPI, although it does not only depend on project execution, but also on project choice and structuring.