How Chingona Ventures Thinks About Post-Investment Support (Platform)
Recently, I attended the VC Platform Global Summit and the Emerging VC Summit. Both events provided great opportunities for in-person relationship building and discussions about how to better show up in our roles. See below for a list of takeaways from both summits and how that ties into how we think about platform at Chingona Ventures!
Emerging VC Summit Takeaways
While sourcing deals and getting them approved by an investment committee are often the most discussed aspects of the venture role, a less discussed part of an investor’s role is what happens after a deal is made and the many ways that relationships can look between a founder and the investors on their cap table.
Panelists discussed how the relationship between a venture fund and a portfolio company begins during the due diligence phase, where junior members are usually most involved. As such, junior investors should consider whether their diligence processes are mutually valuable to founders and the investment team. One way to accomplish this is by developing sector specializations or making relevant and beneficial introductions pre-investment.
Ultimately, the emphasis was on the quality of interactions with founders rather than the quantity, and understanding that each relationship must be unique to the needs of the portfolio company at that time, aligned with the investors’ skillsets, and centered around respect.
VCPlatform Global Summit Takeaways
Meanwhile, my takeaways from the VCPlatform Summit were more tactical. The working sessions I was most drawn to involved how to augment your work with technology, balance competing priorities, and integrate data into your firm’s strategic decision-making.
My two favorite moments sessions involved a peer-led discussion group about how individuals at venture firms juggle various priorities and another session about change management within venture firms. Similar to the conversation topics at the EVCA, several of the conversations about platform strategies discussed ensuring that the support offered to founders align with a firm’s goals, values, and portfolio needs. On the other hand, figuring out what your founders don’t need is as important as identifying where you can provide support.
Wait, What Is “Platform”?
In venture capital, the term “platform” refers to the additional support that venture capital firms offer to their portfolio companies after making an investment. This support can take various forms, including services like HR recruiting and public relations advisory, expertise through access to expert advisor networks or close relationships with successful investors, and connections via a firm’s proprietary networks in hard-to-reach industries or supportive founder communities.
Each fund’s approach to providing this support can vary significantly; it may depend on factors such as internal capacity, expertise, sector focus, and investment stage. This support could be provided by a dedicated team, a single employee, or distributed as a shared responsibility among all team members.
Venture capital firms that adopt a clear platform strategy believe that providing such support mitigates against potentially expensive mistakes and increases the likelihood of a portfolio company’s success. This strategy, in turn, makes the venture capital firm more appealing to future founders, helping them win deals. The following visual provides examples of how venture firms may utilize their unique expertise, partnerships, and resources to support their portfolio companies:
Is “Platform” a ZIRP Phenomena or Enduring Facet of Venture Firms?
While the venture industry is notorious for overpromising and under-delivering value, the importance and persistence of the platform teams and strategies have simultaneously been the subject of debate (such as when an article claimed that platform teams were on the chopping block). Despite these perceptions, the energy around the people I’ve spent time with over the past few works across Chicago, Miami, and San Francisco show that people in all types of roles and venture firms of all sizes and strategies are actively striving be valuable assets to their portfolio companies and taking initiative to do so through learning and collaboration with peers.
At Chingona, we believe that these debates and conversations are a part of a relatively young industry’s ongoing professionalization. Venture firms are increasingly seeking ways to differentiate themselves and partner with the best founders. A part of this differentiation involves offering positive post-investment experiences to founders and building (and maintaining) strong reputational capital.
How We Think About Platform At Chingona Ventures
At Chingona, our small but mighty team allows for all of us — including our interns — to be involved in all aspects of the firm. As such, the responsibility of supporting our portfolio falls on the entire team. When considering our approach towards working with our portfolio founders, we keep the following in mind:
- Supporting Follow-On Fundraising: Given our day-to-days involve evaluating investment opportunities and overseeing the portfolio, particularly as they go back out to market, we are always open to providing our perspectives on fundraising strategy, advising on term sheet negotiation, making relevant introductions, and participating in reference calls.
- Prioritizing Perspective Sharing: We aim to be thought partners and sounding boards, not operators within your company. However, if we are the primary target for a product, we welcome the chance to be early users. (Some of my favorite products that I personally use are Kudos, Beni, iAsk, and Hoop!).
- If we can’t help, we won’t get in your way: We respect a founder’s time and will refrain from intervening unless we believe we can make a positive contribution. We are also very particular about introductions, and will only send referrals another founder has vouched for or that we have personal convictions about.
- Recognizing that how closely we work may evolve over time: We acknowledge that what is an ideal partnership between one portfolio company might not be applicable for another, and these needs may evolve over time.
ABOUT CHINGONA VENTURES
Chingona Ventures invests in pre-seed and seed-stage companies in often-overlooked markets, partnering with founders at the earliest stages. The firm invests in financial technology, food technology, future-of-learning, future, and health/wellness companies based in the United States.
If you’re a founder raising a pre-seed or seed stage round within one of our focus sectors, we’d love to connect! Please fill out this form to get connected.
