What is ‘Platform’ in Venture Capital and why is it important?
Ruth Brungard, Platform Associate, recaps her experience in platform over the past two years at M25 and talks on the importance of platform.
Do you find yourself being asked questions about your job like “What does that mean?”, “Why is it called that?”, “Oh, so you do marketing?”, “What is venture capital?” or the dreaded “What is platform?” You may have found yourself in VC platform.
Rewind to early 2021, I would have been asking those same exact questions. The extent of my knowledge on venture capital, let alone platform, at that point was sparse, consisting of the show Shark Tank and a few mentions of startups and VC throughout high school and the beginning of my college career. I finally got my start in platform fortuitously, as an intern in May 2021. Over the past two years at M25, both as an intern and full-time as a Platform Associate, saying I’ve learned a lot would be an understatement.
Platform encompasses a wide range of services and activities that VC firms provide to portfolio companies both pre- and post-investment—think value add. These offerings help portfolio companies grow and succeed beyond investment. The official “Platform” title has only been around for about a decade, so it’s understandable that it’s not a widely-known role. It’s one of those if you know, you know (iykyk) circumstances. With an ever-growing amount of platform professionals and initiatives like the VC Platform Global Community and their annual VC Platform Summit, it is evident that platform is becoming increasingly important in the world of venture capital. If you tuned into the earlier blog, I referred to the importance of prioritizing platform responsibilities in Rediscovering the Impact of Platform.
Platform can be categorized into ten separate categories: scouts & venture partners, content, fellowships, incubators & office space, events & workshops, online forums & platforms, networks, corporate relations, talent and expertise as a service. All of these components are summarized in A Tool to Build & Benchmark Your VC Platform Strategy.
M25 Platform Components
Coming from a platform team of two, we have narrowed it down to five total pillars—with a few adjustments to fit our brand and resources—for M25 to make platform tasks easier to prioritize. In no particular order:
Talent
It’s one of our goals to create a strong, direct pipeline of talent for our portfolio companies. With over 130+ companies in our portfolio, there tends to be many open roles on a day-to-day. Over the past few months, it’s become increasingly important to help funnel talent from our talent network to our portfolio to help them fill roles faster and with individuals who are genuinely interested in the Midwest startup ecosystem.
Content
Brand, PR, and marketing for the firm help with inbound deal flow and M25’s reputation. A brand doesn’t emerge overnight, it takes years of exposure to really build a VC’s reputation. On the platform team, we’re helping to build M25’s brand. By posting news to Twitter and LinkedIn, such as portfolio updates, event recaps, interviews, firm and ecosystem updates, we are helping to build a brand that is visible to the Midwest ecosystem and beyond.
Events
We host a large event in Chicago every fall called the Club M25 Summit. In the spring, we host a virtual version of the Summit called Match Week. We also host happy hours in Midwest cities throughout the year. While the platform team may spearhead these events, the entire team is involved in planning, organizing, deciding on venues and any other endeavors that come with hosting events.
Traditional portfolio support
We offer perks, discounts, and assistance where needed. If our portfolio companies are looking for a new resource or an existing one, we keep track of all our discounts and portfolio perks in one place to make it easy for our companies to find what they are looking for. This also involves assisting the investment team when needed.
Community management
While we support our community of portfolio companies in more traditional ways such as a shared slack or by bringing them together at annual Summits or happy hours, we have a unique addition to our community. We run a secondary brand, midweststartups.com, our team’s way of showcasing our knowledge and expertise on the Midwest ecosystem. We post blog content, send newsletters, post annual Midwest City Rankings, host contests like Midwest Madness and more. Learn more about Midwest Startups on Twitter and the recently launched LinkedIn page!
The Importance of Platform
So why is platform so important? According to the 2023 Power of Platform report from the VC Platform Global Community, “increased platform investment contributes to stronger overall performance. Funds with higher levels of investment in platform teams generally have higher Net IRR and TVPI compared to those that have no platform based on pooled returns.” As the fastest growing role in the VC industry, it’s clear that platform has made an impact on the day-to-day at VC firms across the globe.
What exactly is the best way to describe platform, especially if you find yourself on a small team wearing many different hats? Narrow down your platform goals and go from there. Focus on the areas of platform that you can do well and fully commit to on your team. It still might be a mouthful to acknowledge what your role truly entails, but a few highlights can speak volumes. With two years under my belt (and a significantly increased understanding of venture capital), I’m ready to to expand upon my knowledge and continue to help build M25’s platform!
P.S. When in doubt, just ask ChatGPT for a wordy one or two sentence summary of all the areas you focus on in platform:
“The platform team functions as a strategic hub within our organization, facilitating talent acquisition for portfolio companies, managing brand building and marketing initiatives, organizing events, providing support to portfolio companies, and overseeing community engagement through initiatives like midweststartups.com. The role is pivotal in creating a strong ecosystem and driving growth within the M25 portfolio and Midwest startup community.”
About M25: M25 is an early-stage venture firm based in Chicago, investing solely in tech startups headquartered in the Midwest. Since launching in 2015, M25 has become the most active investor in the region, quickly becoming the preferred seed investor for the next generation of Midwest unicorns. Portfolio companies include Kin Insurance, Loop Returns, Astronomer, Summersalt, SteadyMD, Branch, Authenticx and more. For more information, please visit www.m25vc.com.
*Article updated in November 2023
