Why VC Firms need to hire a Head of Platform
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A Head (or Director) of a Platform role in the VC industry is something of a new, niche that’s becoming increasingly common over the last couple of years. We are seeing more and more job ads for these roles, as VCs strive to add more value to their portfolio companies. The last decade was the starting point for its formal adoption. And since then, it has grown at a phenomenal rate. A large number of individuals identify themselves as working in the VC industry in 'platform' roles. A private membership group named VC Platform Global Community has over 1,000 members worldwide.
A Head of Platform in a VC firm is someone who looks after all the platform services that a VC firm provides to its portfolio companies. Most VC firms are jumping on the bandwagon and introducing VC platform roles.
There are over 30 new job openings posted in the last month on the job board of VC Platform Global Community alone. Recruiters from Google, Notion, and B Group Capital are looking to hire for platform-related roles from that VC Platform Community. It shows the increasing demand for these positions in the VC industry.
A platform role in VC plays a pivotal role in developing and growing portfolio companies. It also enables the VC firm to stand out from the crowd as the competition gets fierce with each passing day.
Apart from the growth of portfolio companies and positioning of the firm, there are several other reasons and advantages of having a platform role (Head of Platform) in a VC firm. In this guide, we will educate you about the VC platform roles and their importance.
What is a Platform Role?
Before we move ahead, let’s define what are the VC platform roles in the first place. A platform role is a position in VC firms whose biggest responsibility is providing the portfolio companies with the necessary support after the investment. It can range from support in hiring and recruiting to vendor management.
A platform role in a VC firm is a position helping its portfolio companies access the platforms essential to their growth. These platforms can be in the shape of access to networking events, consulting services, and specific vendors.
The VC platform services are not limited to portfolio companies, but the Head of Platforms supports the VC itself. The competition in the venture capital industry has become fierce, and every other VC in town wants to set its firm apart from the competition. Therefore, branding/marketing the VC itself is also a crucial part of the VC platform strategy.
3 Reasons why a VC firm needs a Head of Platform?
There are countless reasons why VC firms need a Head of Platform - or a platform role in the firm. We have gathered a list of the 3 most important reasons why a VC needs a have a platform role (a Head of Platform) in the firm.
- Investors can not support every portfolio company
The first reason is that VCs can not provide individual guidance and support to every company on the portfolio. Every startup has different needs - and therefore needs access to a different set of vendors/platforms.
As an investor, it will become nearly impossible to connect every company with the right network. What if you have invested in startups from 7 different industries. How would you be able to cater to all their needs at the same time?
A startup can not succeed without getting non-financial support from the VC. Investment is crucial - but investment alone does not guarantee success.
It is where a platform role comes into play. VC platform services are the venture capital example of the Strategic Management department in a big organization. Since the Head of Platform will be focused only on providing all possible non-financial support to portfolio companies, the chances of failure are reduced to a greater extent.
- Rising expectations of founders
Another big reason a VC firm needs a Head of Platform is the rising expectations from startup founders.
The competition is getting fierce with each passing day. And companies need more than just investment to succeed in every industry. Startup founders want more from VCs than just money.
It creates a need for having a versatile Head of Platform in a VC firm. Someone who can provide “post-investment” support to startups helping them achieve great success.
- A competitive edge
It is by far the biggest reason why a VC firm needs to hire a Head of Platform in 2022. The VC platform roles are getting a lot of traction in the VC industry, and if you as a VC don’t have it - you’ll lose out on a lot of great startups.
Startup founders value the platform support to a great extent because of the breadth of support. Furthermore, non-financial “post-investment” support from a VC creates a sense of goodwill with the startup.
What does a Head of Platform do for a VC?
After establishing the fact that VC platform roles (a Head of Platform in most cases) are essential to the growth of VCs and startups - let’s define the core functions of the job.
A platform role (Head of Platform) is a very versatile job. Each company in the portfolio requires a different type of “post-investment” support. Some companies need help recruiting and hiring, while others can not manage their vendors.
As shown in the picture above, a Head of Platform in VC usually provides support in all or some of the following areas:
- Corporate Development - It includes everything that a company needs to grow into a corporate business. Corporate development support from the Head of Platform can range from help in managing external communications to business development. In this area, the Head of Platform also works on the business development for the VC firm.
- HRM - As stated earlier, the platform support from the VC can include help in talent acquisition, management, and HR consulting. Experts believe that creating a team (hiring and recruiting) is one of the biggest challenges that a startup has. Since most startup founders are not experienced in Human Resource Management, this turns out to be one of the most crucial services from a Head of Platform.
- Vendor Management - It is the most important area in which the startups need support from the VC. A new business does not have access to a network of vendors essential to delivering its product/service. While a VC will have very good connections with most of the vendors because of the experience. Therefore, vendor management is the most important and productive service that a Head of Platform provides to its portfolio companies.
- Events and Networking - A Head of Platform helps the founders connect with the right people by providing them access to events and conferences.
- Operations/Supply Chain - It is somewhat similar to the third area, vendor management. But, this is mostly exclusive to manufacturing/product businesses. It also includes supporting the startup in LPs/Fundraising and accessing platform tools.
- Marketing/Branding - Another most important area where platform roles add the most value is marketing/branding. Most startup founders have little experience in Marketing/Branding - and VCs hire the best minds in the fields to help portfolio companies in the area.
