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Strategy and Governance:

The startup's journey is made by experimenting and validating ideas, aligned with the company's purpose. Realizing the purpose depends on designing and operating strategies and actions, and monitoring them to ensure success, or pivoting to adjust them to the moment and the market. Strategy is made up of choices that can bring opportunities or risks. The required alignment and supervision require defining roles and responsibilities for the management team, bringing relevant governance practices to the moment of the journey.

Why are Strategy and Governance important?

A boat without a defined course does not reach its destination! The Strategy promotes the focus on the business, communicates the size of the ambition and guides everyone in the company towards the same objective. But, the Strategy has to be dynamic, like startup life. It needs to be revised, re-signified, redirected at each stage or cycle, which tend to be short with growth. And how is strategy linked to governance? Governance practices support the strategy in carrying out actions, with clear rules, structures and responsibilities among partners/founders, executors and other interested parties, providing the basis for the company's sustainable growth and increasing its value in attracting investments .

How do Strategy and Governance help growth?

The startup's growth/traction phase is full of pain, insecurities and anxieties for the founders and management team. Everyday decisions increase exponentially and you need clarity to make the right choices. Defining strategy requires understanding the startup's internal and external environment, using strengths to seize opportunities and understanding weaknesses to minimize risks. Once chosen, the strategy has to be operated via actions that require monitoring so that they bring the expected value.

Integrated Strategy and Governance:

  • Avoid dispersion of efforts;

  • Promote results within expectations;

  • Organize management to minimize conflicts and risks;

  • They pivot direction dynamically to reduce impacts on growth.

How do Strategy and Governance apply in the growth journey?

In each phase of the startup, the menu of practices and processes evolves. Some examples:

  • Operation / validation: contracts and agreements, strategic purpose and macro direction (Lean Canvas), separation of company and partner pockets, relationships with customers and suppliers, relationships with mentors, registration of intellectual property.

  • Traction: strategic direction with clarity of strengths, opportunities, risks and threats. Roles and responsibilities of partners and executive managers, budget planning and management, management practices, investor relations, board and mentors.

  • Scale: code of conduct, board of directors and external audit, evolution of strategy and risk management, maturity of controls and investor relations, and even leadership succession planning.

  • Monitoring: full maturity of reports and management and governance rites, full service to investors and other stakeholders in the company.

What are the benefits of Strategy and Governance for the startup?

  • They bring focus and structuring actions for the company's growth

  • They bring clarity to everyone involved, minimizing the risks of choices made during the journey

  • They organize the company and provide comfort to partners, investors and managers.

  • They increase the company's credibility for investors and other interested parties.

  • They explain and anchor the company's values, define actions and conduct, protect intellectual creation.

  • Prepare the company for new leaps with sustainability

How can DMS help?

  • Professionals with lived experiences in Strategy and Governance

  • Market and business vision to support startup growth

  • Adaptation and flexibility to the themes demanded by the company's moment

  • Team with proven experience and ability to apply to your context

Market View

The so-called “death valley” of startups is full of good ideas that didn't move forward for several reasons. The 90% rate of startups that fail is scary!

There is no silver bullet! Although looking at strategy as a necessity seems challenging in view of so many demands, understanding your business and using the best management practices in its various stages should not be overlooked. They are important tools to achieve defined goals and objectives, minimize business risks and obtain the expected results.

Camila Farani (shark tank Brazil) – “We need to have the entire strategic path of growth in mind. It's no use having a memorized text, because we can see if the person knows where the product or service is going.”

Governance is part of the strategy and is an important theme for accelerators and investors. The implementation of governance at the startup is considered a differential for attracting investments.

Because? Because investors value companies that have control over management processes, with well-defined internal responsibilities and capable of delivering the promised results. This structure brings efficiency and professionalization, in addition to being a great help to better weather crises, reposition itself and grow sustainably.

However, according to the IBCG survey in 2019, with responses from executives and partners from 150 Brazilian startups and scale-ups, respondents recognize the importance of corporate governance as a relevant factor to achieve their goals, giving this aspect average grade 9 , on a scale from 0 to 10. At the same time, they give an average grade of 6.2 in relation to self-knowledge on the subject.

Startups that want to grow sustainably cannot remain unaware of this view of the market.

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