A little over three years ago, we set out to change the way vendors, the venture capital industry, and VC platform teams interact. We wanted to create a platform where startups could get access to the best software discounts and perks, and investors could discover new deals and opportunities and give them to their portfolio companies.
We've seen big changes in the venture capital platform profession, and in the platform role, making it a top driver for value for the leading VC and PE firms. Platform leaders are relationship management pros and a great platform can help them to extend their network inside a VC firm.
Today, we're proud to say that we've helped give away over $50m worth of deals and discounts across all the communities that we work across. In this blog post, we'll share what we've learned about the VC Platform role in the past year.
To help you understand how we work, we typically partner with a VC Platform operator, or Head of Platform. To help you understand what that person does, the job description and responsibilities typically fall under a few key areas:
- Building a communications community and platform to support founders.
- Allowing founders to exchange ideas
- Creating a member community where founders and partners can exchange ideas without feeling like the VC is 'listening in' to their concerns or fears.
- build a positive NPS score from founders and co founders, which will help the fund attract capital.
- build relationships with recruiting professionals.
- build a strong communications strategy and network.
- managing deals, discounts and vendor relationships that vcs provide to portfolio companies.
-network operations events and activities.
Problem: You're a VC-funded startup, and you need to get your business off the ground. You've heard that you need to focus on building a great product, but you also need to be laser focused on marketing and sales, service, back-end infrastructure, customer success support software, and many other software platforms.
Solution: We offer a platform that offers discounts on the best software tools and services for VC-funded startups, so they can focus on building a great product without worrying about which products to use, and we make sure we get the best deals for them. We help VC Platform professionals to engage with vendors, suppliers, and founders in an easy way.
We love keeping track of how much money we've saved for the platform team and for startups, and to date in 2022, it's been over $50M. We work with some of the biggest (and smallest) VC Platform professionals on the planet, and we have learned a few things along the way.
Choosing between software vendors can be difficult for early-stage startups because they may not have the same resources as larger companies.
Startups may not have the time or money to do this kind of research, so they often end up choosing a vendor based on personal recommendations or simply the best deal they can find.
There's an old saying. You can bring a horse to water, but you can't make him drink. Well, the same goes for startups. As a VC-funded startup, it's important to be aware of the deals and discounts available through the your VC Platform.
However, you can't force startups to use discounted software or a marketplace. Sometimes startups just don't know these deals exist. That's why it's important for the platform team to share information about the deals with their companies.
Startups and VC platform professionals have complained to us about not being able to get in touch with some of the larger software vendors when they're trying to get discounts.
These vendors of software like to say they help small startups, and offer deals and discounts, but sometimes they just don't follow through on those offers, often ignoring requests from startups.
This can be frustrating for startups that are trying to save money. It's super frustrating for us, as a VC Platform provider, as well as for our VC partners when a vendor ignores a request for a deal or a discount.
As more VC firms get a platform hire, we think this issue will fall away as more business development teams in this large vendors learn about Platforms.
We can also encourage compliance through our reviews feature. Startups can always leave reviews of vendors which are shared with the rest of the community.
80% of startups choose the same 20% of software vendors. This means that the majority of startups will only end up using a small number of software vendors.
The typical vendors usually always come up on top: Hubspot, Stripe, AWS, Sendgrid, Carta and a few others are always in demand. So, it's kind of pointless offering thousands of deals. 99% of startups won't use them.
As the venture capital platform role has seen a huge increase in exposure and importance in recent years, more and more venture capital funds have been offering formalized post-investment support for founders.
For venture capital leaders, this means really digging in, and doing everything you can to help your portfolio succeed.
We've seen small funds do amazing work with founders and huge funds do very little. As platform roles have changed and evolved, we are really encouraged by what we're seeing in the industry as a whole.
More firms are investing in platform roles and these people are doing more great work to encourage post-investment support.
A successful platform strategy can be to help portfolio companies by giving them a forum by providing them with a place to connect.
This way, they can learn from each other's experiences and be able to reach out to each other to ask questions.
For vendors selling services to the venture capital platform profession, many startups will not buy from a brand unless they get a recommendation from someone they know and trust. In our case, the venture capital firm wants to know if anyone else in the portfolio has used that product or service before.
This really helps to increase brand awareness for the vendor. Having referrals inside the venture capital firm with portfolio companies makes it much easier to become a recommended vendor.
We see a lot of new business development roles in the venture capital industry, and these people are focused on increasing sales for the portfolio companies in the venture capital firm. They want to use our platform to encourage sales between portfolio companies.
This is a new platform role and it's been interesting to see it evolve over the last few years.
The venture capital industry is changing and their platform strategy is too. But not quite fast enough. In 2023 it's going to get a lot tougher. Portfolio and firm management is going to have to get serious about really adding value to portfolio companies after a firm invests.
As an investor, you will be more successful if you help your underperforming investees brainstorm solutions and strategies for the problems they face instead of giving up on them.
We crunched the numbers, and these are the tools that portfolio companies are demanding the most, across all of our VC partnerships