Michael Brown of Bowery Capital and Kelli Fontaine of Cendana Capital discuss trends and themes using Cendana Capital manager data.
“Week 7 of VC School: Venture Platform Portfolio Mangement” is part of a seven week series from the interns at Bowery Capital. The series will cover lessons learned and concepts covered during the weekly “VC School” meeting, a program taught by the Bowery Capital team designed to teach interns the fundamentals of the venture capital space. This summer, we want to open our doors and share these lessons with the broader community.
Last week we covered the first half of portfolio management from a fund level perspective. This week’s discussion focused on how VC firms add value to their individual investments through venture platform portfolio management. Some of the earliest versions of platforms started to formally pop up around 10 years ago. These original platforms were mostly focused on offering product help and building a general community for portfolio companies. As platforms continued to gain popularity we began to see the rise of specialized platforms fully focused on verticals such as talent or sales. Today, many platform roles tend to be more horizontal across the fund and can assist in anything from fundraising to deal flow. When thinking about the role of the venture platform in portfolio management its important to remember the venture power-laws from last week’s discussion (20% of companies will power your returns while 80% will fail). The role of the venture platform is to help improve companies to be value drivers and help the best companies continue to be value drivers. As the state of VC gets more and more competitive, platform teams also serve as a differentiator that gets involved in the process in order to win deals. In this week’s discussion, we focused on discussing Bowery Capital’s acceleration team which is singularly focused on growing revenue by assisting with Growth, Business Development, and Talent.
1. Growth. Our acceleration efforts often begin with growth which is focused on building a company’s go-to-market infrastructure and processes. These efforts include guidance on setting up the sales stack, creation of marketing and sales collateral, sales narrative and pitch feedback, and assistance with initial product pricing and sales process. Our Growth team works on 100+ projects per year for founders and has helped our companies save countless hours on setting up sales, marketing, and customer success infrastructure.
2. Business Development. After successfully setting up go-to-market operations our business development team helps companies acquire their first customers. Our team works to introduce founders to prospective clients through our robust network of IT buyers. Business development work includes substantial weekly prospect introductions, designing “lighthouse” proof of concept programs, inbound marketing generation, and late-stage deal work including pricing, legal, and negotiations.
3. Talent. The final segment of the Bowery acceleration platform is the talent team which is focused on helping founders find early hires. Our talent team engages in hands-on sourcing, interviewing, and closing of individual contributors, managers, and executives. Additional talent projects include compensation planning, training for internal recruiting teams, and onboarding and growth coaching. Not only does our talent team save our founders hundreds of hours but they also help them save thousands of dollars in fees that would be paid to recruiting agencies.
4. Measured Goals and Quantifiable Results. We track the success of these different acceleration team activities and hold quarterly business reviews with our portfolio companies to ensure we are on the same page as our founders. Many teams are also tracking things like NPS scores with founders, and successfully matriculating founders to their next round.
1. VC Platform Global Community. The popularity of VC platforms is evident in the growth of communities built around supporting platform professionals. The VC Platform Global Community offers learning events, platform job boards, platform centered content, and a directory of all platform professionals. The Bowery Acceleration Team also serves as co-chairs of this community, with 700+ people it is the largest of its kind.
2. The Rise of the VC Platform. This article from Forbes details why VC platforms have gained in popularity and explains different platform functions such as talent, business development, and community.
3. Impact of VC Platform. This blog post from Bethany Crystal at USV discusses the role of the venture platform and the different ways you can measure its impact on the performance of portfolio companies and venture funds.
If you liked “Week 7 of VC School: Venture Platform Portfolio Management” and want to read more content from the Bowery Capital Team, check out other relevant posts from the Bowery Capital Blog.
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