Why The Best VC Platform Teams Are Focused on Outcomes
Tl;dr: the past, present, and future of Platform is rooted in delivering real outcomes that matter to Founders, to GPs, and to LPs.
This North Star has guided how we at FirstMark have built our Platform since 2008, which today represents the culmination of years of experimentation, hard work, focus, and the pursuit of outcomes.
If you study the history of venture capital, it is replete with examples of how the best venture funds have made pivotal talent, customer, or advisory connections for some of the most important companies in tech. (I would suggest you read The Power Law, a terrific history of the industry, as our entire team is doing right now.)
Any Platform professional who has asked for advice over the past 10+ years has heard a familiar refrain: in order to succeed, you need to distinguish between things that look impactful and things that are actually impactful.
Taking a step back, you see two very different postures across top funds. Some, like Benchmark, eschew the notion of in-house services. Others, like Sequoia, have maintained in-house services for decades. Each partnership chooses the path it believes in, and strives to be the best version of itself. But in both cases, the best firms are able to open doors that lead to company-defining moments.
So the question isn’t whether Platform works. It’s whether your Platform is working toward the right things.
The business of venture capital is a funnel: see, pick, win, accelerate. The best Platform teams are extraordinarily intentional about where and how their efforts ladder up to that effort. This means that, if an LP were to ask, “why is this effort valuable?”, you can clearly draw a line to financial returns.
Take customer development, for example. On one hand, you can build a network of CIOs that informs every aspect of the see/pick part of the business. You can walk early-stage companies into lighthouse customers as part of win/accelerate, which has the effect of pulling forward a company’s sales development, as subsequent buyers believe, “if this product is good enough for X… it’s good enough for me”. An intential customer development effort will help GPs make highly informed investment decisions, give access to company-inflecting customers, or both. That’s meaningful.
At FirstMark, we believe deeply in the power of Platform. We’ve seen and won Series A opportunities because of the ways our platform enables our General Partners. We have helped companies find their first and largest customers. We have recruited teams at the earliest stages and sourced critical C-suite hires for pre-IPO companies — and importantly, enabled access to a caliber of candidate that (especially early) companies cannot reach without the power of our brand and Talent team. We operate Guild communities that make founders and every member of their executive team better at their craft.
To give concrete examples: we invested in a post-product, pre-revenue data business focused on restaurants. We introduced them to multiple prospects, including a burrito chain viewed as the clear leader in digital. When a startup closes a deal like that, it makes every future customer conversation progress faster — which, in turn, drives both IRR and DPI for LPs. We have walked a portfolio company into the Federal government, for what has become a $10M+ deal. That single deal is large enough to show up in the company valuations we provide to LPs.
As an aside, if this sounds like the kind of outcome you can deliver for founders— we’re hiring.
And, yes, we have helped multiple companies find CFOs… something we excel at because we built a scalable recruiting engine on top of our unfair advantage: an authentic commitment to community.
Our CFO Guild — which is just one of eight different CXO Guilds we run — counts 400+ members across the unicorn and public tech ecosystem. By ‘giving away’ community as a product, we have built a network of extraordinary people, which serves as the foundational layer for our portfolio company services.
Leaders within the CFO Guild help each other, as they did in the midst of the SVB crisis earlier this year. This amazing community of people is happy to provide feedback on deals, which helps us reach highly informed investment decisions. They’re willing to take early pitches from FirstMark-backed companies which, for example, has led to a Series A company closing a half dozen customers that we introduced in rapid succession. And to bring it full circle, one of our Series C investments just brought on a CFO hire — someone we had known for years through the CFO Guild — without paying $150K+ to an executive search firm.
Finally to state the perhaps obvious: if you’re an early-stage founder who wants to work with a venture fund that can deliver these kind of outcomes… give us a call. We announced $1B+ of new funds last year. We are investing right now in outstanding Series A and Seed founders. We have a Platform team — and in fact, an entire firm — that prides itself on the ability to provide genuine company-building support to founders.
While FirstMark’s superpower is community, there are many ways to succeed in VC Platform — so long as a team is deeply focused on outcomes. In the years ahead, the best funds and Platform teams will continue the work of enabling founders in meaningful ways… and they will do it, as FirstMark has always done, with a relentless focus on the outcomes that matter to Founders, GPs, and LPs.
