Building a company is hard. It's exhausting, it’s challenging, and above all, it is uncertain. 

No matter how many books a founder reads or blog posts they gobble down, nothing replaces bashing brains with peers who have walked the same path. This is why many VCs are drawn to the idea of creating scalable online communities for founders, executives, and portfolio members.

Online portfolio communities are by no means a new concept; they have existed in the industry for decades. VCs have experimented with building these communities on nearly every platform imaginable – from simple WhatsApp or Slack groups to sophisticated, custom-built solutions using tools like Circle or Mobilize. The common goal is to enable your portfolio leaders to gather virtually, engage, and serve as valuable resources for one another.

Some firms have effectively mastered this approach, using these digital hubs as a significant value-add for their portfolios. A notable example is Y Combinator’s Bookface, which provides a robust platform for founders to connect, share insights, and support one another. But for every successful example I can think of, there are a dozen more firms that have attempted this and failed.

So why is it so difficult to execute well? Why do so many founder communities never make their way from idea to execution? And when you do launch create one, why does it feel like an eerily quiet Slack group with the same two founders asking for niche assistance every few weeks only to be met with silence? 

The reason for this is that creating an engaged, valuable community is HARD. It only works if a ton of puzzle pieces come into place, and if even one is missing, the effort that goes into your community creation may not pay off. 

In this piece, we will explore what it takes to build a truly thriving community for your portfolio, the benefits it can provide to both the fund and its founders, and why in many cases your fund’s resources, be it time, money, or expertise, may be better spent elsewhere.

For your community to have even a fighting chance of survival, you need five components:

Let's dig in!

1) A portfolio ripe for community

A VC firm cannot simply create a community and expect enthusiastic participation from its portfolio. Many VC firms launch online communities for all the wrong reasons.  Some firms believe that they will serve as a great marketing tactic to entice founders or LPs.  Others launch them because they have a vague feeling that founders are lonely, struggling and need a community to turn to for help. And others launch communities because, well, it feels like every other venture firm has one, so they feel obliged to follow in the footsteps of their peers.

At its core, a portfolio community demands buy-in from the portfolio to be valuable. Without this buy-in, a community is nothing more than a collection of individuals who would rather be spending their time and energy elsewhere.

In the absence of having your portfolio begging for an online community, a way to determine if you are well positioned to have buy-in post launch is to assess the size of the portfolio, and the firm’s investment approach.

Let's break this down:

A large enough portfolio: A critical mass of portfolio companies sets the stage for diverse, meaningful interactions. I recommend a baseline of at least 50 active portfolio companies, which allows for a good starting point, assuming that not all of your companies will join the community, and only a small percent will be regular active contributors. This portfolio size factor also ensures a variety of perspectives, avoiding echo chambers and providing relevant responses to most queries.

An investment approach with high ownership stakes: The size of your ownership stake often correlates with the level of influence and engagement you have with a portfolio company. A large percentage typically means the founders are more likely to value your input and often correlates with companies that are more likely to actively participate in your community initiatives. If you hold only a small ownership percentage (say, 2% or less) then the founders do not usually have you as their top-of-mind investor and are far less likely to engage meaningfully with your community efforts.

2) A shared trait

For a community to provide authentic value to every member, there must be a shared trait – a common denominator. This doesn't mean all members need to be early-stage health tech founders; the common ground can be more flexible. Some examples include:

• Same industry (e.g., fintech, edtech)

• Same location (e.g., New York-based startups)

• Same stage (e.g., companies with $100 million+ revenue on track for an IPO)

The importance of this common denominator is twofold: firstly, it ensures members can contribute their know-how to common challenges or opportunities. With zero shared traits, the chances of members’ experience being helpful to others go down significantly.  

The second reason a common denominator is so vital is that it helps to create a sense of belonging, a feeling that “these are my people”. Members need to feel they're among peers in a safe space, in their safe space. This fosters trust and allows members to open up about challenges they are facing that they would not take elsewhere. 

Furthermore, the community needs to be balanced. Avoid situations where one or two far more seasoned professionals become default advice-givers to the rest. This can shift the dynamic from a community of value to all, to an unbalanced 'forum', which is unfair to those constantly sharing their expertise and is ultimately unsustainable.

3) Targeting the right audience

For a portfolio community to thrive, you have to ensure you are targeting the right people in your portfolio with the right offering. 

What do I mean? 

By portfolio community, we are not solely talking about founder/CEO communities. Many funds decide to focus their efforts on creating communities for other members of their portfolio that are more organic and align with the fund's DNA. For seed-stage funds, the emphasis might be on founders and early key hires, like the first head of marketing. Later-stage funds often benefit more from communities centered around functional employees. 

Remember, founders are busy and by the time you are leading a series B, the founder you're backing may already become embedded in the founder communities led by their earlier investors, so adding another slack community to their life is more of a headache than a value add. However, they likely have a strong executive team that doesn't have the same peer support that their founders have, giving a fund the opportunity to add differentiated value by supporting their leadership team with more focused communities to their needs and functional challenges.

Another kind of alignment is funds creating communities for those underserved in their portfolio. This approach involves identifying and supporting those functions within your portfolio companies that do not have as much support. This could mean supporting roles that are critical but often overlooked, such as Chief of Staff or Head of Operations.

These types of alignment directly impact the community's effectiveness and relevance. 

Consider your fund's strengths: A fund that has a deep focus on helping their companies with hiring and talent challenges might build a talent-focused community. Imagine you have a highly engaged investing partner who happens to be a recovering Chief Product Officer from a top tech company. Creating a community for your portfolio's product leaders to collaborate and receive guidance from this partner could be a powerful combination. 

This approach allows your team members to become natural champions within the community, leveraging their expertise to provide real value. This strategic alignment leverages your fund’s expertise to ensure that your community adds unique value.

4) Active management

The idea that you could add your founders to a Slack group and walk away hoping that they will willingly interact with each other and evolve into an independent thriving founder community is naive, to say the least.

It’s your founders and executives job to build their companies, not to help you build your community. You need to ensure that your community is instantly beneficial and value add to your portfolio. To do this, platform professionals must take an active, hands-on approach. This means actively managing the community, driving consistent engagement, maintaining a robust content calendar, and enlisting your investment team, EIRs, and advisors to provide timely, insightful responses.

In a world where founders and executives can get a helpful answer to nearly any question with a quick prompt to ChatGPT, the bar for uniquely valuable insights is higher than ever.  Ensuring that your community provides a wealth of honest, peer insights that cannot be gathered elsewhere is what will make your community a truly valuable asset for your portfolio.

Another crucial aspect of active management is organizing sporadic events. While these communities primarily exist as virtual groups online, creating valuable and well-executed events occasionally, both in-person and virtually, is a powerful tool that revitalizes your online community and ensures a boost in engagement. These events can range from simple founder dinners or expert webinar to summits or retreats, each serving to strengthen connections and reinvigorate participation in the online space.

To be clear: Building a thriving community requires a substantial commitment. A simple Slack channel won't cut it. To do this right, you're looking at a meaningful budget that would need to cover hiring a dedicated community manager, providing them with resources, implementing a suitable community platform, and allocating funds for ongoing community initiatives. 

However, the responsibility of a portfolio community cannot and should not rely on the community manager alone. Their job is to "manage" the community, but remember, they are not the subject experts. The entire team of the firm needs to be bought in and invested in the community's success. This ensures that when the community needs help, the community manager can easily find the right person in the fund to engage in a timely and valuable manner.

In essence, building a thriving founder community demands both effort and capital. It's an investment in your portfolio's success, not a passive add-on to your services. You need to be prepared to put in the work and resources to create an environment that community members find beneficial and worth their limited time.

5) Easy, hassle-free interactions

You can have all the right ingredients for a great portfolio community, but if it requires multiple logins to an obscure platform, it's dead on arrival. The key is creating a frictionless experience that adds value without adding burden. In short, you need to meet your community members where they already are.

I’ve struggled with this component of driving community success time and time again, and realize that solving this “last mile” problem for virtual communities actually does unlock real value. For those readers who know me, you know that two years ago, I launched Synchronize, which is designed to solve this problem for VC and non-VC communities alike.

I’ve observed firsthand that even if you perfect the first 4 steps, without easy engagement, your community won’t thrive.  My hope is that other community software platforms take inspiration from Synchronize, but for now it is the only solution I know that provides communities the opportunity to allow members to engage where they like - be it email, slack, mobile, or web.  And the data shows that this ease drives a meaningful boost in engagement.

(okay, shameless plug time) If you're a community manager who has mastered the initial steps but struggles with platform engagement, I encourage you to reach out. I’d love to share more about why I built Synchronize and how I’ve seen it work with the communities that we power today.

How do you know if your community is working?

Considering the effort that goes into building a portfolio community, it’s imperative to know if it's truly benefiting your portfolio, but how can you tell?

While quantitative metrics like post frequency, reply rates, and post engagement are important to track, they don't tell the whole story. The real measure of success lies in how your founders interact with the community.

The ultimate indicator is whether your founders instinctively turn to the community when faced with unique challenges. Do they seek answers there unprompted? Has it become their go-to resource for problem-solving or strategic support? This organic engagement is the true hallmark of a thriving community.

Beyond metrics, there's an intangible 'X factor' - a sense of magic that sets exceptional communities apart. You'll know your community has this when members feel a sense of home, surrounded by peers who truly understand them. When they proudly discuss the community and its benefits, expressing a feeling of being 'lucky to be there', you've achieved something special.

In essence, a successful portfolio community becomes an indispensable resource for its members, fostering a sense of belonging that goes beyond utility. When your community becomes so compelling that founders and entrepreneurs view it as a must-have network, where membership signals real value and meaningful connections, you'll naturally attract and win deals. At that point, you'll know your investment has truly paid off.

Conclusion

As I’ve said in every one of my newsletters, and will likely continue to repeat, a VC platform team can’t, and shouldn’t, try to do it all. The value you provide to your portfolio, whether it's talent sourcing, GTM support, or community creation, should align with the strengths of your team and the DNA of your fund.

What I hope this piece has conveyed is that building a portfolio community is not a task to be taken lightly. However, if your portfolio is truly ready, interested, and meets the criteria outlined above, and you're prepared to invest the necessary resources, a portfolio community can be one of the most rewarding initiatives you undertake. It has the potential to elevate not just your portfolio but your fund as a whole, creating lasting value for both your founders and your investment strategy.

Ultimately, a well-executed portfolio community creates tangible value through knowledge transfer. By accelerating a founder's ability to find answers, solve problems, avoid mistakes, or close customers, you're directly impacting their success. And in the world of venture capital, their success translates directly to your fund's returns. In this way, a thoughtfully crafted and actively managed portfolio community becomes not just a nice-to-have, but a strategic asset in your fund's arsenal.

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.