From the Scales of Justice to Value at Scale
How we built Ampliphy, a startup within Aleph, to provide sustainable value to our portfolio
There are very few lawyers who actually love their job (or admit they do). I was one of them.
Five years ago, I was working as a tech lawyer at one of Israel’s leading law firms. I supported startups in closing their funding rounds and establishing their initial legal infrastructure. I found it interesting, dynamic and diverse, providing me with the opportunity to meet with and learn from the best founders and their legal advisors. But one day, while mindlessly scrolling my Facebook feed after the closing of a super intense deal, I saw a post that Eden Shochat was looking for an executive assistant.
I know — you’re probably wondering why being an executive assistant would appeal to a lawyer working at a leading law firm. But I was curious to experience a different atmosphere and understand the environment where my clients — startups — operated. Though it was not a trivial decision for my career development, and it was risking a secure career path to partnership and stability, I knew I would always regret not exploring a new direction. I believed that my professional development and the broadening of my network was worth the risk.
As Eden’s executive assistant, my primary responsibility was enabling him to perform more of his work: both finding the best deals to invest in and providing concrete value to the portfolio companies. Aleph had less than 10 companies in its portfolio back then, so when a company wanted an intro to a potential customer, or a reference for a potential executive hire, I could enlist Eden or Michael as needed. But after a few weeks it was clear that these types of tasks could not be performed efficiently or in a timely manner as our portfolio continued to grow. Today, we have over 45 portfolio companies, and the only way we can continue to service them is with technology.
Our goal was to build a PaaS (Partner as a Service), a term coined by Tal Bussel, an Aleph developer. We were set on building a platform that provides access to our partner’s networks to quickly and effectively leverage them to address the portfolio needs, at scale, without having to rely on the partners’ memory or availability. Rather than ask a partner whether he/she has a connection to, say, the VP Digital at Walmart, we wanted an organized system that could access this information automatically.
The first step in this process was to structure all of the partners’ networks and most of the data and contacts in their heads into a CRM accessible to everyone at Aleph. That way, when a portfolio company reaches out with a request, we can address it quickly and thoroughly using our network. This was the very beginning of building the startup within Aleph called Ampliphy. After two years as Eden’s executive assistant, I moved on to lead and manage the Ampliphy platform.
Today, when a portfolio company that is currently in stealth mode recently asked for an intro to an SVP at Zenefits, we were able to easily use Ampliphy and see that one of our LPs (Limited Partners) had a unique connection there. We were then able to quickly reach out to the LP, resulting in an introduction and a conversation. This is just one example of why providing all team members with the ability to effectively and quickly query our network enables quick and systematic support for portfolio requests. This is a real power multiplier for a VC.
As a former lawyer at a leading tech law firm, I understood firsthand the value of structuring networks, because our firm had no organized client list with information (e.g. size, field, geo) that our clients could leverage for their own growth. We interacted regularly with startups and enterprises, but we never worked to introduce them to each other despite the potential business value. Law firms could in theory support their clients with benchmarks for salaries and investment terms. Furthermore, having such a large and varied basis of clienture allows access to many networks, resulting in the ability (if leveraged) to navigate large corporations and industries for the potential benefit of their clients.
As a VC, mapping and maintaining such networks means portfolio introductions to customers, follow-on investors or top talent. The challenge, however, is to leverage these exponentially growing networks for the benefit of dozens of portfolio companies in an effective, timely way. We understood that in a dynamic environment like Aleph, this could only be achieved by leveraging technology.
In addition to the value of mapping our network, we realized there were repeated workflows which, if automated, could be a further power multiplier. The most common example is finding a pathway to a certain target individual or corporation. This task is a building block in the VC industry, regularly used to reference candidates for portfolio companies, find an intro to a potential customer or facilitate an introduction to a strategic investor. So we built an automated reference tool. With a simple Slack command, it generates a list of potential introducers or referrals to the target, prioritized by a formula based on the strength of their connection to Aleph and the strength of their connection to the target. Now, when an entrepreneur asks for help with introductions to commodities industry leaders, for example, all we need to do is click it, rather than think it.
This reference tool within Ampliphy became a vital part of Aleph and is utilized regularly by the entire team. It’s what makes our PaaS approach a reality. A manual process that once required the direct attention and recollection of a partner is now automated and systematically run at scale by the entire team. Remember the intro to the SVP of Zenefits mentioned earlier? It’s hard to believe any human would remember or even know that one of Aleph’s LPs happens to have a connection to Zenefits.
Based on similar methodologies, we developed other tools and services — from talent recruitment to sales enablement and follow-on funding. This is Ampliphy: a platform developed by our team to leverage our unique global network in order to provide meaningful services and value at scale to our portfolio companies.
In 2013, Vinod Khosla, one of the co-founders of Sun Microsystems who later went on to create Khosla Ventures, argued that 70%-80% of VCs add negative value to startups. Eight years later, in an environment with even more money, more investors and more startups, the only way VCs can even think about providing positive value at scale is by effectively leveraging their unique networks. We’re still only 1% done, but confident that through Ampliphy, providing real value is becoming more sustainable.
Five years ago, I never would have guessed that I would be building a platform (within a VC!) to support Israeli startups. Leaving my legal career behind was not an easy decision. I’m grateful that I didn’t let my fear of leaving my comfort zone and being downgraded in title and prestige prevent me from making this huge career move. I enjoy the quick feedback loops resulting from the proximity to Ampliphy’s clients (Aleph’s partners and portfolio companies) and the ability to constantly create new products and tools that not only boost the fund’s productivity, but contribute to the success of our portfolio companies.