Private Market Insights

Building a Competitive VC Platform Strategy for Emerging Fund Managers

Per VCStack: VC Platform teams have the unique responsibility of handling a firm’s pre and post-investment services, ranging from managing the operations of a firm’s due diligence process to providing services like recruiting, product development, and marketing to portfolio companies.

In recent years we’ve seen a significant rise in the size of these teams, in 2022 over 52% of firms reported having Moderate or Significant platform teams, with one in eight core employees at a venture firm focused on Platform exclusively (13.1% of core team members).

Building a robust platform strategy can provide a competitive edge to emerging fund managers in today’s market. But with limited resources, GPs have to get creative when it comes to delegating responsibilities and building their platform teams.

Let’s dive into some of the ways emerging fund managers have historically handled their platforms strategy, where things stand today, and how we can think about VC platform in the future.

💦 Deliciously Juicy Takeaways

🕰️ Past

Historically, emerging fund managers have focused on building a strong founder-investor relationship, leading to a more personalized experience when compared to larger legacy funds. GPs would typically hire 1 or 2 associates (either interns or recent college grads) and together provide support for their portfolio to the best of their ability. Key aspects of this relationship included:

• Providing founders with access to the investor’s network.

• Offering value-added services such as assistance with recruiting.

• Building corporate partnerships with vital service providers for payroll, operations, and project management

🔎 Present

Today, firms have to reach a much higher bar to remain competitive. Legacy firms have leaned into community as a core component of their platform strategy. This has expanded the platform team’s responsibilities to include:

• Hosting events to bring their founders together

• Providing direct support for operations or product development

• Assisting with sourcing follow-on capital for future rounds

Emerging fund managers must lean into their network and build a strong cohort of venture partners, advisors, and mentors who can share the workload, allowing smaller funds to offer a similar range of services.

🔮 Future

In the future, we may see VC platform teams expand even further. With the recent innovations in ML and AI, platform teams have access to a wider range of tools they can leverage to streamline a firm’s internal operations. Additionally, as rounds become more competitive, we may see a rise in emerging fund managers building scout programs to increase their reach for new deal flow.

LP News & Insights

• Pitchbook: The Risks of Letting your LPs Ride Shotgun

• VC Stack: Deep Dive: Understanding the Venture Studio Model

• Venture Capital Journal: San Jose Police boosts its VC exposure for their $5BN pension fund

Curated Deal Flow

Featured Startups of the Week

Each week we highlight several highly-promising early-stage startups actively seeking investments. If you’d like to request a warm introduction, click the “Request Intro” button and complete the form.

Note: We use a double opt-in system to ensure warm introductions; you will only receive a reply if a founder has accepted your request.