Launching a Portfolio Acceleration Platform at a Venture Capital or Private Equity Fund

This post is by David from David Teten's blog

I’ve recently advised a number of emerging private equity and VC funds who are wrestling with the question: What are the highest impact steps they can take to support their portfolio companies? 

Almost every private equity and venture capital investor now advertises that they have a platform to support their portfolio companies. The popularity of the model can be judged by the fact that the U.S. VC Platform community has grown approximately 120% in the last 3 years. Similarly, its European counterpart, the EU VC Platform, has tripled in the same period. 

However, most of us don’t have the budget of an Andreessen Horowitz to support almost every major need of emerging companies. You could spend an unlimited budget on all possible company-building resources.  Maria Palmer of RRE summarizes: “You can’t pick a platform strategy that’s unique, but you can pick a platform strategy that your firm can uniquely execute.” 

I propose here a framework for prioritizing your platform buildout. Once you have assembled the right core team, I recommend prioritizing as follows:

First, meet with your portfolio company management. As an agenda for each meeting, I suggest:

– How can we most add value, in addition to helping with financing? (This is an open-ended query and the most important question.)

– What are your fundraising goals?

– What is the profile of people whom you are most interested in meeting?  

– From which service providers have you received the most value?

Nick Kim (Read more...)