The odds are stacked against entrepreneurs, founders, and startups in today’s world of venture capital. For starters, statistics show that “more than two-thirds of startups never deliver a positive return to investors,” according to Harvard Business Review.
Founding a company that survives requires a level of grit and determination that doesn’t always come by so easily. Beyond venture capital, founders also need access to talent that can foster effective business development, marketing, and operations.
But in recent years, one nice-to-have has become a must-have in the venture capital industry: a VC platform team.
Post-investment, the success of your portfolio companies can hinge on guidance, mentorship, support, and knowledge exchange from seasoned stakeholders and trusted advisors. These are all things a VC platform can provide.
In today’s competitive marketplace, there is strong evidence that hiring a platform team can catalyze your portfolio companies’ success. Read on to learn about VC platforms and how to build a winning platform team for your venture capital firm.
Table of Contents
- What Is a VC Platform?
- 3 Important Reasons Why a VC Firm Needs Platform Roles
- Typical Roles On a Platform Team in a VC
- Don't Forget: 3 Key Tips To Consider When Building VC Platform Team
- Hunt Club: Talent and Network Solutions For Venture Capital
What Is a VC Platform?
This relatively new term is rapidly making its rounds in the venture capital industry, and Platform roles are the fastest growing: An impressive 13.1% of core employees at venture firms were focused on Platform in 2022 — compared to just 6.4% in 2000.
In short, a VC platform is a value-added resource that refers to a set of support services VC firms provide to their portfolio companies, increasing their chances of success and long-term profitability.
The real work begins after a startup raises capital.
There are many challenges, hurdles, and complexities on the journey to growing and scaling a business. A VC platform can offer a range of post-investment support, access to networking opportunities, seasoned expertise, and customized guidance at each growth stage.
3 Important Reasons Why a VC Firm Needs Platform Roles
As your VC firm and its portfolio grow, you need a way to scale the support you deliver. In order to do this, you have to establish platform roles that allow you to offer a broad range of specialized support in a repeatable and reliable way.
VC firms that offer no or limited post-investment support services risk losing out to their competitors and potentially undermining the growth potential of their portfolio companies. It’s in a VC firm's best interest to prioritize developing a high-value platform team to help them grow a trusted industry reputation, stand out in a competitive landscape, and ultimately, share success with its portfolio companies.
Here are a few more reasons why VC platform roles are so critical.
Value-Add to Portfolio Companies
Time is of the essence for startup founders, and having quick and reliable access to a pool of experienced professionals and trusted advisors across various domains is invaluable.
A VC platform adds value in these key areas a portfolio company needs to succeed:
- Strategic support and operational efficiency.
- Financial advising, compliance, and risk mitigation.
- Recruiting and attracting high-performing teams.
- Branding, marketing, and enhanced reputation.
- Community building, peer support, and collaboration.
- Crisis management and personnel support.
- Strategic partnerships and access to deep networks.
Enhance Deal Flow and Attract High-Quality Startups
By leveraging a robust platform team, portfolio companies gain access to invaluable networks that foster fruitful business connections and collaborations. This network effect not only enhances their visibility in the market but also accelerates the flow of potential deals and opportunities.
The platform team's experience and industry knowledge can help startups make informed decisions, refine their strategies, and overcome obstacles quickly. High-quality startups will recognize the benefits a strong platform team can provide and will take that into account when choosing the VC firm they’d like to partner with.
Portfolio Company Success and Returns
Early-stage startups typically face low and slow cash flow, struggle with budget constraints, and have limited teams. A platform team, however, can help fast-track a company’s success by filling the typical gaps in knowledge, industry contacts, and bandwidth.
This level of support can significantly boost their chances of success and expedite their path to growth, creating a thriving ecosystem where both parties achieve mutual success.
This allows the startup to tackle various operational, marketing, and talent-related challenges more efficiently and effectively, benefitting both them and their VC firm.
Typical Roles On a Platform Team in a VC
A platform team works synergistically in a VC ecosystem to provide the tailored support and timely resources that are instrumental in growing and scaling startups.
Here, we’ll explore the various VC platform roles and how to hire for them effectively.
Head of Platform
As a key leadership role, the Head of Platform manages and oversees the platform team, strategy, operations, and execution. They collaborate with the investment team and other stakeholders to align the platform's initiatives with the VC firm's overall investment strategy and goals.
This position, which can also be called Director of Platform or Platform Manager, is seen as the most critical and should be your first hire. Shaping the direction and impact of all the essential functions is imperative for success because it acts as a bridge between the VC firm and portfolio companies.
Talent Partner
Attracting, sourcing, and retaining top talent is vital for the survival of your portfolio companies. Platform support enhances these companies' overall capabilities, performance, and growth by ensuring they have the right people in key positions.
Beyond hiring, talent management also creates an environment where employees thrive and contribute effectively — a must in today’s employment landscape.
Hiring — and conversely, turnover — costs startups time, money, and resources, which are already stretched for them. According to StartupNation, attrition rates for the average startup are 25%, nearly double the national average.
Talent partners on a platform team provide invaluable support for talent acquisition, development, employee engagement, and retention strategies. By addressing employee needs and nurturing a supportive work environment, platform teams enhance job satisfaction, reduce turnover, and foster long-term commitment.
Furthermore, having a robust network paired with strong talent management support creates a value proposition for a VC firm as startups compare their options.
Business Development Manager
Whether it’s deal sourcing, expanding into new markets, facilitating strategic partnerships, or identifying investment opportunities, business development is the lifeblood of a VC.
Marketing and PR Specialists
Marketing and public relations (PR) are valuable resources for VC firms and their portfolio companies. Startups, especially early-stage, need as much visibility and credibility-building as they can get.
Marketing and PR activities can promote portfolio companies and their achievements. By highlighting success stories, announcing milestones, and sharing unique value propositions, the platform team enhances the visibility of portfolio companies in the market.
This exposure creates a buzz and can attract potential customers, strategic partners, and investors, creating even more added opportunities for growth and business development.
Additionally, marketing and PR efforts help build the brand identity and visibility of the VC firm itself. The platform team can enhance the firm’s reputation and credibility within the startup ecosystem by establishing a strong reputation for support in this area.
This, in turn, attracts high-quality founders and portfolio companies that recognize the platform as a valuable resource for visibility and reputation by association.
Events and Networking Manager
Events and networking are also opportunities for platform teams to foster community building, knowledge sharing, collaboration, brand visibility, and investor engagement.
By organizing workshops, panels, and conferences, platform teams facilitate opportunities for founders, industry experts, and other stakeholders to share insights, best practices, and experiences, as well as build relationships.
Plus, getting people together in person creates a sense of community, creativity, and energy exchange of like-minded folks, which can lead to sparks of innovation.
Operations Specialists
Operations Specialists liaise effective communication and coordination between the platform team, portfolio companies, and other stakeholders. Suffice it to say, they are critical on a platform team.
Platform teams ensure that information flows smoothly, tasks execute efficiently, and expectations are met. They work to establish clear communication channels, documentation processes, and project management frameworks. Operations Specialists play a pivotal role in exactly this, enabling efficient resource allocation, scalability, data-driven decision-making, continuous improvement, compliance, and risk management.
Financial Advisor
This role provides crucial financial insights and strategic support to both the VC firm and the startups it invests in. They act as the financial go-to, analyzing financial data and market trends to identify investment opportunities and potential risks.
Their expertise helps guide investment decisions, ensuring the firm invests in promising startups with strong financial prospects. Additionally, they work closely with portfolio companies, assisting them in financial planning, budgeting, and forecasting.
A Financial Advisor’s goal on a VC platform team is to maximize the financial performance and growth potential of the startups, ultimately leading to successful exits and returns for the VC firm's investors. Their financial expertise and business acumen make them a key player in driving the overall success of the VC firm and its investments.
Technology Consultant
Tech Consultants provide expert guidance and support to portfolio companies within the firm's investment portfolio.
Their primary responsibility is to help portfolio companies leverage technology effectively to enhance their operations, product offerings, and overall performance. They help develop and refine technology strategies, assess and select appropriate technology solutions, and assist with digital transformation initiatives.
Technology Consultants also provide guidance on IT infrastructure and operations, data analytics, and cybersecurity.
Don’t Forget: 3 Key Tips To Consider When Building a VC Platform Team
A platform team plays a critical role not only in a VC firm, but also in its portcos — so it’s imperative to get it right. Here are three important factors to consider when building a VC platform team.
1. Nurture a Diverse and Inclusive Platform Team
Building a diverse platform team is beneficial because it will bring in a varied range of expertise, perspectives, and experiences, fostering creativity and innovation.
The firm should proactively seek out diverse yet skilled team members with targeted recruiting strategies, including partnering with organizations that specialize in sourcing talent in the tech and startup industries, like Hunt Club.
Leadership should also consider establishing professional development opportunities tailored to underrepresented groups within the platform team. For example, pairing a team member with very little experience in the VC industry with someone with several years of experience through an established mentorship program.
2. Design a Comprehensive Onboarding Program
A well-designed onboarding program is crucial to acclimate new platform team members to their roles and the company culture. Smooth integration of the platform team encourages collaboration and cross-functional cooperation, maximizing the value they can bring to portfolio companies.
3. Cultivate Retention and Growth That Resembles Their Own Work
Prioritize fostering a culture of continuous learning, growth, and innovation with professional development opportunities, mentorship, and employee recognition initiatives.
Why?
Because platform specialists do this themselves for the portcos they work with.
Hunt Club: Talent and Network Solutions For Venture Capital
Successfully supporting your portcos comes down to more than just VC funds.
It comes down to people.
From designing and deploying an effective hiring strategy to onboarding and cultivating a diverse team, we partner with and empower VC firms to focus on what matters most: fueling the growth and success of their ventures through innovative talent.
