How investors can build a great platform team: 6 tips

Helping the startups in the portfolio grow faster in a variety of practical ways is a no-brainer for venture capital investors. Marketing and hiring support as well as introductions to potential clients and help with landing pilot projects are among the many ways investors can boost a startup’s growth trajectory.

Around half of VCs now have a “platform” function which specifically helps portfolio startups grow their business. Research by the trade group VC Platform shows that these VCs have better returns on investment.

Shanna Hendriks, who heads business development on the portfolio services team at VC firm NEA, says having a platform team can be a great marketing and sales tool.

“NEA has been around for a long time but not a lot of people have heard of us, especially new founders. So when we can come in and help with talent or business development and make some potential customer intros, that can be really helpful in this competitive landscape that we’re in,” she says.

Corporate investors, on the other hand, often have an explicit mandate to find collaboration opportunities between their portfolio startups and the parent company’s business units. This makes the platform function even more crucial. Our latest GCV Keystone benchmarking survey shows that 34% of CVC units have a business development or platform team. This rises to 65% among the larger funds, those managing more than $300m.

A recent GCV webinar, Designing a winning CVC platform, brought together platform team specialists from both VC and CVC firms, with Geetha Dholakia, portfolio programme director at TDK Ventures, and Tjerk Joustra, global implementation manager at Shell Ventures, joining Hendriks on the panel. They gave us an insight into how their roles work and how organisations can get the maximum benefit from them.

This is what we learned:

1. The platform teams of VCs and CVCs operate differently

NEA, or New Enterprise Associates, is a 46-year-old firm with more than $25bn committed capital and some 370 portfolio companies. Although Hendriks is part of a team of eight people focused on helping the portfolio companies with functions like marketing, talent and business development, they are thinly spread. They also speak to a large number of different businesses to try to see where their portfolio companies could be a business fit.

In contrast, corporate venture platform teams have the luxury of being more focused on one business and tend to have fewer portfolio companies to handle. Shell Ventures has around 100 investments and a implementation team of around seven. At TDK Ventures, Dholakia leads a team of four platform professionals, who liaise with the unit’s 42 portfolio companies.

Between eight and 10 portfolio companies are about what a CVC platform professional can handle, says Dholakia and Joustra. Although it can depend on the stage of the company — new investments tend to need more handholding and support.

Joustra also notes the degree to which the business stakeholders like a portfolio company can also make a big difference.

“Sometimes we find that they’re so enthusiastic they’ll run away with it and there’s hardly anything we really need to do to support,” he says. In other cases, when the relationship with the startup has been imposed on the business unit by top management, the platform team must work harder to manage the relationship.

2. Structured ways of bringing the corporate and startups together can be helpful

Part of the skill of the platform team is getting to know the corporate business units and their needs well, so that they know exactly which ones might benefit from a startup’s technology.

“We know who to knock on the doors within the corporate. That’s the key in this job,” says Dholakia.

But some structured events can help raise general awareness about the portfolio, too.

TDK Ventures, for example, runs an annual event, where it brings together portfolio companies and TDK corporate leaders to facilitate in-person connections and learning.

“In these days of constant Zoom calls, having people in a room where they can talk to each other is extremely valuable,” says Dholakia. “So, for the last two years, we have been putting together the Portfolio Summit, where we bring all of our portfolio companies and TDK corporate leaders to spend a whole day talking to each other, looking at product showcases and having panels.”

3. Engage multiple stakeholders at the company

It’s not enough for a startup to find just one champion in the corporation, they need two or three at least, says Joustra.

“Once you’ve got the first person in the business that is enthusiastic about it and really wants to bring this forward, go and find the second one, because that will create that longevity, or at least the continuity that you need,” he says. Corporates have frequent personnel changes, so a startup’s contact at the a business unit may suddenly be transferred or leave. “You need to build in your own continuity” by building a whole team of advocates, says Joustra.

4. Keep clear separation between the CVC and the parent company

CVC platform teams work very closely with startups, and so need to be particularly vigilant not to betray any confidences or pass on proprietary information back to the parent company. It helps to be clear about the role as intermediary and facilitator and avoid getting involved in any commercial negotiations.

“Our mantra to the portfolio companies is: ‘share what you feel like sharing with the parent directly, not through us’,” says Dholakia. “There is also legal help on both sides. The portfolio has their own legal [advisors], and we have a legal counsel in-house. There are enough checks and balances in place to avoid or even preclude a conflict of interest.”

Joustra says Shell Ventures takes care to make sure it stays out of the commercial negotiations between a startup and the parent company. He also notes that Shell Ventures’ platform team members do not take board positions, to further avoid potential conflicts.

“We could take shareholder representative positions, but we’ll never take a board position,” he says.

5. Having a fund to pay for pilots is handy — even if you don’t use it

Sometimes collaboration plans between a startup and a business unit get derailed because there is no budget to pay for a pilot project to test the technology. Some platform teams are getting around this by having their own funds that can be used to help pay for these.

“Proof of concepts do inherently have some extra startup costs associated with that, so we try to cover that. We never pay the entire thing, the business does need to put some money on the table as well,” says Joustra. “But funnily enough, we seldom need to use [the funding]. We offer it, but when push comes to shove, we seldom need to use it.”

Not everyone takes this approach. TDK Ventures, for example, never pays for pilots and always asks for the funding to come from the business units.

6. Measuring success is essential but a challenge

Being able to demonstrate that a platform team is creating value for the company is essential. The function can be hard to understand and be at risk of being cut if it is not able to clearly show how it is useful.

“Corporate venture has a tendency to go through cycles where you are absolutely great, and then the next [CEO] comes in and starts asking if this is something we really need to do,” says Joustra. “Being able to showcase consistently year after year that you have been measuring and performing and delivering real value is an easy way to basically justify your existence.”

But metrics are hard to get. Shannon Hendriks says the NEA team tried several ways to measure efficacy but ultimately they found it was hard to quantify anything beyond the number of introductions they make for portfolio companies.

“Ten years ago, I thought we could prove the value of a intro — if this turns into this many millions of dollars, and then that returns this much to the fund,” she says. But anything that happens beyond the introduction is not in the platform team’s control so doesn’t serve as a reflection of team performance.

CVC funds may find it easier to measure impact as they can get more data from the parent. TDK’s Dholakia has a fairly wide set of measures. Like many CVCs they track the number of pilots they get started with the parent corporation.

“But we also have other metrics beyond these, like, was there any learning? Did the corporate parent enable the portfolio company to learn something because they work with a lot of customers and have a lot of technical knowledge?”

Shell Ventures takes the most quantitative approach, tying the platform team’s performance to the bottom-line impact for the corporate parent.

“We definitely try to measure the real benefits. There are cases where we have developed new revenue streams that are easy to measure, and there are cases where we see costs of certain projects go down,” Joustra says.

Watch the full webinar below:

This webinar is part of GCV’s The Next Wave series of webinars. We run a webinar on the second Wednesday of every month, alternating between advice for CVC practitioners and deep dives into specific investment areas. Our next webinar will be: Is now the right time to invest in autonomous driving, on February 19, 2025. Register for free here to secure your place.