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.
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.
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.
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.
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.
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.
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:
In spite of these challenges, and regardless of what the 2024 economic temperature and marketplace volatility have in store for the business world, your firm can take proactive steps to address them and greatly improve the overall efficiency, compliance, and cost-effectiveness of the vendor relationships your firm and portfolio companies deal with.
There are many ways your private equity firm can improve vendor relationships. From setting clear KPIs to implementing vendor management software, the right strategies can help you make informed decisions and rise above the competition in a changing market.