Venture Platform: New developments 2023–24
Since the very beginning of our Venture Platform, we have consistently and continuously evolved our Platform offerings and how we work. We listen to our portfolio companies: we directly ask for feedback after each engagement, and receive numerous requests each quarter that we then assess, to see how we could support. Based on the requests we receive, and the trends we see in what is most valuable, we evaluate and move forward with developing new offerings.
Alongside the development of our content, we also continue to improve our operational model to gain efficiencies and ensure we can service all of our companies. This evolution is vital as we continue to invest and grow our portfolio towards the 50th investment and beyond.
Scaling our Venture Platform
Prioritization
As our portfolio grows, scaling our Venture Platform effectively is critical to our continued success as investors. We know that companies and founders have different needs and capacities when engaging with us, and are at very different stages along their growth journeys. To account for this, we have developed structured venture engagements that can be easily adapted to the needs of any given startup. We also prioritize the level of post-investment support we offer to each of our companies by considering several factors. For example, is this the founder’s first experience as an entrepreneur? Does the company have limited access to support (other investors, grants, advisors, or internal team)? To allocate our resources to support our growing portfolio, we developed a weighted scorecard that analyzes these factors and results in a three-tier categorization of our portfolio companies.
Our tech stack
Providing easy-to use resources and support alongside our deeper tailored engagements is a key part of our continued journey towards scale. This year, we launched several tech initiatives which contribute towards this aim:
- The MCV Venture Platform Notion page, which provides an introduction to MCV and our Platform function. On this page, ventures can find key resources for each of our four focus areas as well as our constantly-updated Consultant Roster — a vetted list of experts across a broad range of topics including finance, IT, marketing, and legal and additional resources.
- Our new partnership with Builtfirst, a vendor marketplace providing discounts on the most used technology solutions for startups. Offers include Amazon Web Services, Microsoft, Hubspot, Google Cloud, AirTable, and more. We have already saved our ventures $180,500 in tech solutions since launching the partnership in August 2023.
Self-serve resources: Governance 101
Part of scale is providing easy-to-use resources that require less hands-on work from our team. We know from our work with very early-stage startups, having gone deep into the due diligence with hundreds of companies, that many founders struggle to put in place right-fit, governance structures to set their businesses up for success. Following requests for board advice from portfolio companies we decided to put our experience into practice and build a “Governance 101” toolkit that outlines best practice for startups at this early stage.
The toolkit can be used by founders on their own as it contains key principles and templates (e.g. founders’ agreement, board of advisor agreement, outline of slides for a board meeting). These mechanisms for reflection, reporting and discussion can help prevent founders from becoming too stuck in the weeds, instead providing them with a space for strategic thinking, expert advice, and building good habits around reporting and investor relations.
We understand that there is no one-size fits all solution to setting the right governance structure. Hence we are also taking a hands-on approach to support companies in this journey, and are currently testing this offering with two companies.
You can explore our light-touch toolkit here.
Climate
To us, climate resilience means more than investing in new companies with a climate adaptation angle. It means recognizing that our current portfolio companies, climate-focused or not, will face climate-specific impacts on their markets, business models, and end users.
“Many impact investors face the issue that companies (and other investors) see impact as separate from business growth. But they are one and the same. So the challenge for embedding a climate lens in our Venture Platform will be similar — we will need to work hard to integrate climate resilience into the mindsets of all founders we work with, and develop relevant support mechanisms for them.”
Hebe Foster — Platform Associate, Mercy Corps Ventures
In 2022, we started investigating how we might design climate-specific offerings within our Venture Platform. As a first step, we sat down with portfolio companies, peers, and other investors to better understand how their customers, businesses, and products could be better supported to respond to climate risks and opportunities. For example, climate risks for an emerging market startup could include the physical geography where their customer base is located and related environmental risks from climate shocks. It could also mean potential business continuity risks such as supply chains, staff availability, regulatory risks around climate requirements, and consumer preferences such as divestment.
In response to what we heard, and as part of our broader Fund work on climate resilience, we have developed a series of initiatives to apply a climate resilience lens to our different functions. We outline our approach and outputs in this series.
Diversity, Equity, and Inclusion (DEI)
We know that diverse teams build better, more impactful, more innovative, and more inclusive products. Building on our work to create a robust DEI approach for our Fund, our Venture Platform supports companies in developing and implementing a DEI strategy. As a baseline, we use the 2X Global Criteria to encourage companies to assess their diversity in four business areas: ownership, leadership, workforce, and consumers. We’re working to expand these beyond gender, to a more holistic understanding of diversity that is right-fit to the emerging markets we work in.
Lessons learned
Pre-investment
One of the early elements we developed in our Venture Platform was our pre-investment support offering. We know that by and large, the venture capital system is set up to miss or exclude local and female founders. These founders are often close to being investment-ready but are missing the networks, feedback, and support to get over hurdles to funding.
Our pre-investment support aimed to support ventures with great potential for impact even when they did not fully fit our investment criteria, reaching ventures that aren’t already favored by the impact investing community. It allowed us to support nascent solutions in non-financial ways, such as our Investment Readiness workshops for female founders in Francophone Africa.
Over time, we have come to realize that this kind of pre-investment support is not how we are able to differentiate our offerings, nor where we can have the most impact on underrepresented founders. There are many highly effective convenors, service providers, accelerators and incubators who focus on this pre-investment stage. Instead, in recognition of the role we play as investors in a system that is traditionally biased against underrepresented groups, we actively seek to understand and challenge systemic biases by deploying capital towards such groups. Alongside this, our Platform function works directly with startups to spark their awareness of diversity, equity and inclusion considerations, and to develop inclusive team cultures.
Supporting underrepresented founders remains central to our approach, and we’re continuing our journey to embed DEI across all of our work.
Insights
Our Insights function brings valuable power to our Venture Platform, giving us the opportunity to conduct action-oriented research that generates valuable insights for the ecosystem. Previous series have taught us a lot about our investments, such as how customer insights engagements can generate deep insights into the impacts of climate change on MSMEs, and been well-received by the ecosystem.
However, while large-scaled research pieces are incredibly valuable, we increasingly recognize the value of more regular, iterative reflection on our Platform offering and how our work is improving outcomes for businesses and their users. Like the Fails and Lessons Learned section of our Impact Report, we think it’s important to share more transparently what we’re working on and what we’re learning about engagements with our companies.
In the last year, we’ve started to undertake quarterly reviews of our Platform work, seeking to understand both the value we’ve brought to startups and where we could have done better. We’ll be exploring different ways to share these insights in the coming months.
Find out more about how we built our Venture Platform, tools for running engagements, and what our portfolio thinks.
Reach out to Head of Platform, Natalie, for more information.
