👋 I’m Cory welcome to my very first newsletter, I'm so glad you've subscribed!

This first piece runs a bit longer and more detailed than most as we are tackling a huge topic, but I promise- it's worth the read! Let's jump in…

Every venture capital fund shares the same overarching goal at its core, to drive outsized returns.

There are five stages in this quest, as laid out by Nikhil Basu Trivedi in his newsletter next big thing: find, decide, win, help, exit.

Whether it’s selecting companies with exceptional potential or helping portfolio companies connect to the right customers, mastering each of these stages is vital to bringing a fund towards its end goal.

Yet, given the artisanal nature of VC and the limited resources inherent to the business model of venture capital, it’s impossible for an investing team to be exceptional at all five stages. That is, unless funds get creative. 

Platform has become that creative way for VC funds to provide the kind of bespoke strategy that leads to exceptional returns, at every single stage of the investment journey.

With the task of leveraging and activating their firm’s network and expertise, platform professionals are the modern “growth hack” for VC funds. It’s the reason that the VC platform function has emerged as the fastest-growing career path in venture capital, with 53% of VCs now having platform teams; more than double the proportions in 2000, according to a research report I co-wrote for the VC Platform Global Community.

For my first newsletter, I aim to provide a concrete framework of the role platform plays in each of the five stages of investments, with examples of how they contribute to realizing outsized returns.

But word to the wise, not every platform team can or should do it all. The first step is figuring out where your fund needs the most help or where your top priorities lie, and focusing your efforts there.

For example:

• If you’re in a new fund without a long record of success, you’ll likely want to focus your platform efforts in the ‘find’ stage.

• If you’re a smaller fund with just a handful of investors and a large portfolio that needs support to accelerate their growth, it likely makes sense for platform to be focused on the ‘help’ stage. 

• And if you have funds 10+ years into their investment period and are eying liquidity for more mature companies, you may want to over-index on a platform that can support the ‘exit’ stage.

By laying out all platform possibilities in the framework-driven and digestible way below, you will be able to establish where your fund needs support, and how platform can effective support your fund’s needs.

Platform’s Role in Finding

Finding the best companies in the ecosystem is the first step VCs take toward their end goal. 

Even at this outset, platform can play an influential role by 1) ensuring their fund is exposed to quality deals earlier than their competition and 2) empowering funds to proactively source deals at scale. 

Let’s break it down:

Branding and marketing

One of platform’s roles is to help the fund identify compelling investment opportunities and capture those founders’ attention, ensuring they are already interested in and engaged with the fund before they are ready to raise. 

This is often led by a firm's head of marketing, head of content, or CMO (whose functions fall under the platform umbrella). This includes efforts such as crafting a quality website, creating valuable and creative content targeted at the fund’s target companies, distributing content effectively, PR initiatives, social media and more. These efforts are arguably the most scalable method to earn external credibility and drive inbound deal flow.

Some funds with standout marketing efforts include First Round Capital, whose publication First Round Review has become something of a bible to founders that are looking for high-quality tactical content, Atomico whose annual State of European Tech report is one of the most insightful and anticipated industry benchmarks each year and, of course, Redpoint Ventures where, under the creative leadership of Josh Machiz and Rashad Assir, they have completely pushed the needle on what VC content can look like with a highly accessible and engaging strategy using TikTok and Instagram short-form videos.

Events and programs

Hosting well-curated events for founders and the ecosystem is a scalable way for platform teams to build relationships and ensure their fund remains top-of-mind when founders look to raise. 

From Australian VC fund Blackbird, which goes all out with a Coachella-like Sunrise Festival each year that features more than 50 speakers across three stages, to Upfront’s annual Summit which hosts more than 1,000 top investors, entrepreneurs, and leaders in LA. These large-scale events, led by innovative platform geniuses like Joel Connolly and Kerry Bennett, bring their fund’s ecosystem together, bolster the fund’s brand, and are a strong source of future deals.

Programmatic data-driven sourcing

Recently many VC funds have been adding product and data science experts to their platform teams who help drive forward a fund’s data-driven sourcing strategies. These individuals can build proprietary platforms and tools that allow their funds to find companies to invest in before their competitors by looking at signals such as a company’s traction, growth, or talent trends. 

An example of a fund that has heavily invested in this strategy is EQT Ventures. Their team built an internal data and machine learning platform, Motherbrain, which helps the investment team in their efforts to find and invest in compelling companies. Another is Fifty Years who has built a number of tools, including Paper Scraper to stay on top of the latest scientific research to surface investment opportunities before the inventors even start a company.

Network driven sourcing

Incentivizing a fund's network to support sourcing efforts is another responsibility often tasked to platform folk. Most funds do this informally, showing their appreciation for great introductions by sending gifts or swag, but some funds have decided to adopt a more structured approach, providing cash rewards and sometimes even allocating carry for successful intros. 

For years, many of these ‘scout programs’ have remained in the shadows. Funds like Sequoia and A16Z are known to have secret incentivized scout programs for well-connected individuals, but today we are seeing more transparency around sourcing economics. Newer funds like Baunkunst have established programs such as ‘Bankunst Collective Investments,’ which openly share on their website that all those who source an opportunity that Baukunst invests in, “will receive financial upside in the form of deal-by-deal synthetic carry on that investment to honor their ongoing contribution to the collective.” This approach enables a fund to benefit from exponential exposure coming from a network with strong incentives.

Platform’s Role in Deciding

Selecting companies with the greatest potential for growth and profitability is the next step in amplifying a fund’s chance of achieving outsized returns. 

Here, platform can have a powerful impact by providing leverage for the investment team to execute better and more comprehensive diligence. 

Let’s break it down:

A community of experts

A highly effective way that platform teams can optimize the selection process for their firms is by establishing a community of trusted subject matter experts and entrepreneurs. This community acts as an extension of the investment team, providing market insight on prospective investment opportunities. 

Some platform teams that shine here have established vetted proprietary networks akin to GLG. These networks can be instantly mobilized for input during due diligence, streamlining the process and eliminating reliance on individual memory for network connections.

Standout examples include Eniac VC, who have built out a strong network of domain experts and senior executives across the Fortune 5000, and Primary VC who established the Primary Expert Network, a group of vetted functional leaders from across NYC tech. Some funds, such as Pillar VC, take this model a level further and invite these individuals to be limited partners in their fund.

Founder & executive assessments 

An emerging role that platform plays during the diligence stage is conducting assessments, both formally and informally, of founders and executives who are leading companies that the fund is considering investing in. The leadership team is often hailed as the most critical component to a company’s success, and the capacity to conduct leadership-specific assessments equips a fund to identify and invest in the most resilient founders and executives, increasing a fund’s odds of betting on the right team.

What historically was a tool just for growth equity and PE funds such as Vista’s CCAT and expensive assessments such as ghSMART is now being led by talent partners who are part of the platform teams at funds of all sizes. Talent partners come from a range of backgrounds and those with a background in psychology, such as Franzi Hunger at Kaya VC and Noa Matz formerly at F2 Venture Capital, can provide real expertise and leverage to support their investment team with this critical piece of the investment decision process.

Speeding up diligence processes and efficacy

Many platform professionals act as the operational glue at their firms and are responsible for creating more efficient and effective ways to execute investment processes. For many platform folks, their north star is to provide their GPs with leverage to scale their time. From building and maintaining better internal tools and collaboration platforms, to rethinking the way a firm approaches diligence and deal voting, platform is often focused on using the firm’s internal and external expertise to drive the right investment decisions.

For example, one of the many features of Seven Seven Six’s Cerebro platform, designed by Alexis Ohanian and Cristina Apple Georgoulakis, is that it serves as the fund’s operating system and allows the team to optimize the tracking of notes, contacts, meetings, time tracking, document management and more. 

Tools such as this demand creativity and initiative from platform teams, but have the potential to streamline a fund’s diligence process, resulting in faster and more informed investment decisions.

Benchmarking 

In the diligence stage, several funds have found ways to integrate their platform team when digging through robust data rooms to drive insights on a company’s performance with higher accuracy and objectivity.

Often, funds sit on troves of historical data around company performance and have called on their platform teams to make sense of this by creating benchmarking tools to more effectively utilize when deciding on prospective investment opportunities.

VCs whose platform teams have created impressive internal benchmarking tools include SignalFire, whose end-to-end real-time data platform, Beacon, is used to benchmark metrics of companies as part of their diligence process. Another best-in-class example is Scale Venture Partners, which built out an internal platform, Scale Studio, with data from over 1,000 private companies that they use to benchmark the growth and operating metrics of companies to assess their potential success.

Continue reading….

Click here to continue exploring platform’s role in the Winning, Helping, and Exiting stage.

🌎 Where in the world is Cory?

Hello from Buenos Aires! For those of you who know me, you know my fiancé Paulina and I are digital nomads. This section of the newsletter is to keep you updated on where on earth I am as I’d love to meet up with readers if we overlap in the same cities.

Next week I’ll be in Miami for the VC Platform Summit where I look forward to catching up with many of you! Come say hi!! 🌴 

PS: When I’m not writing newsletters, my day job consists of consulting and coaching, if you’re interested in working together, here’s how to get started:

• Consulting — I work with some of the top VC firms in the world to design and level up their platform strategies. Reply to this email to learn more.

• Coaching — I offer 1:1 platform coaching for current platform folks looking to grow in their role and aspiring platform professionals looking to break into the VC industry. Book a call with me here.

Enjoyed this post? Help out and spread the word!

This post is brought to you with the help of Yaffa Abadi of Abadi Brands, a premier personal branding firm for leading executives and VCs.