Scaling Venture Platform support: A Toolkit

As an annex to our article World class support for high-impact startups: Our Venture Platform we’re sharing a toolkit from some of our most popular support offerings, including hints and tips that could help impact investors replicate this. We’ve framed this article with background on how we’ve evolved our Venture Platform offerings and what we learned along the way.

Written by Hetal Patel, Head of Venture Growth, Hebe Foster — Platform Associate, and Eva Hoffman — Consultant, at Mercy Corps Ventures.

Reach out to Hetal if you have questions about our Venture Platform.

The Background

The journey to building our Venture Platform has been a deliberately long and thoughtful process. From the early days of Mercy Corps Ventures (MCV), we’ve identified and addressed recurring bottlenecks for our portfolio companies, going into nascent markets and asking early-stage ventures where they needed support to ensure that we didn’t duplicate other services. We’ve worked to cultivate an ecosystem that nurtures and sustains the very foundations of high-impact venture growth.

Through this experience, our hypothesis was validated:

Early-stage companies require a rapid, high-touch assessment to identify the right Venture Platform support, the right balance between ad-hoc and structured offerings, and iterative implementation that embeds sustainable processes.

This journey started with a process of discovery to ensure we created something valuable that addressed gaps in support already existing for startups at early-stage.

We determined:

  1. Early-stage companies are often past the accelerator stage or don’t have time for a full accelerator experience. At the same time, they are not yet mature enough to have a robust network of consultants, or they lack the budget and capacity to seek a right-fit fractional CFO or expert in human-centered design to support foundational growth.
  2. There are plenty of DIY resources, but sourcing these takes valuable time and energy, pushing this down founders’ priority lists. Most importantly, these resources aren’t customized to the unique needs of a venture and don’t connect teams with other experienced or expert individuals, increasing the risk of taking on this work themselves.
  3. All the companies we work with are impact-oriented and have a social mission at their core. However, they often lack resources and time to think deeply and carefully about measuring and telling their stories from an impact perspective, which is their customer journey, in concrete terms. Again, hiring someone dedicated to impact management can also prove challenging due to cost and/or capacity.

Here, we share a high-level toolkit from some of our most popular support offerings, including hints and tips that could help you replicate this.

The Toolkit

Finance Systems

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Challenges in the areas of finance often go hand-in-hand with being a startup. Founders are focused more on minimum viable product (MVP) and go-to-market strategies, and less on understanding finance requirements and implementing solutions. Another hurdle is the inability to secure a full-time, experienced finance team and/or CFO.

Finance engagements should build on-time, accurate systems for informing key business decisions while easing reporting requirements across strategy, operations, and fundraising. Whether they’re “lean” engagements, to set up basic accounting and reporting processes, or “robust” engagements, to set up complex on-time financial reporting and analysis support, this support should be right-fitted to the needs, capacity, and skill set of the venture.

Market Analysis

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Assessing unit economics, such as customer lifetime value and costs of acquisition, with a view to testing products in-market is vital for early-stage ventures, particularly if looking for further investment. Segmentation and knowing the competition also helps narrow a company’s market focus for an understanding of the serviceable market.

Supporting ventures to understand market opportunity and their customer bases can ensure leadership teams make strategic decisions about investments and growth. Core outputs from a pure market analysis engagement should include a comprehensive review of market size and segments to ensure strategic alignment.

Image courtesy of Mercy Corps.

Impact

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High-quality impact management is vital, because it:

  • Increases efficiency, business resilience and investment attractiveness by helping companies better articulate and validate their customer value propositions.
  • Allows ventures to more holistically identify and mitigate impact risks, important for both business and impact models.
  • Creates internal team alignment around a core mission and produces strong external messaging, thus demonstrating focus on achieving sustainable impact, which is a necessity for later-stage impact investors.

Strong impact management and measurement supports ventures to enhance their impact systems and articulate their story, helping accelerate progress toward social/environmental impact. Using robust, multi-dimensional frameworks aligned to the Impact Management Project, impact engagements create tangible outputs, structures, and frameworks for analysis of impact at scale.

Customer Insights

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Identifying key impact KPIs is vital to understanding a business and its impact on target populations. Customer Insights takes this one step further, pushing companies to dive into granular detail of their customer experience and demographics, such as key touchpoints, emotions of using a product or service, and how to adjust according to customer needs. It also informs how to streamline and evolve data collection. This ultimately leads to increased uptake of a product or service, thus expanding desired impact.

Fundraising

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There’s little need to explain why support around fundraising is important to early-stage ventures. It is crucial for companies to build robust projections that will speak to KPIs that investors at later stage rounds need to see. Also key is the process of ground-truthing assumptions to tell a solid story about the business model, revenue model, and impact.

We usually make initial investments at pre-seed and seed-stages, when ventures are still in very early development. Supporting portfolio companies toward raising follow-on funding is a key way that we provide value. This offering supports ventures to develop a five-year financial forecast, advises on growth strategy, and supports preparation of pitch collateral. This also is a channel for connecting startups with relevant investors in our network.

As we continue to refine our offerings and Venture Platform we want to hear from other investors and stakeholders in the ecosystem to learn more about what’s working well, along with what could be working better.

Reach out with your thoughts and comments.

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