How we built a VC platform to serve impact founders across Europe — part 1 of 2
This article is the first of two posts for VC platform managers and investors, explaining how we are building a platform to deliver bolder social and environmental outcomes.
Our mission as an impact fund is to help build ventures solving global social and environmental challenges. We do that by investing in startups that scale successfully in big markets and deliver meaningful social and environmental outcomes. In venture capital, the bridge between identifying an opportunity and its success is a long one.
How do we know, quarter after quarter, that we are supporting our ventures in the best possible way so that they can deliver the social and environmental outcomes that we set together at the point of initial investment?
As a small team, how do we know we are spending our time providing support where founders need it the most and in the most efficient manner?
We created our platform to help answer both of these questions. This article explains the thought process behind our platform as an enabler of impact, what we have learned, and the challenges ahead.
Before we get into the components of our platform, it is important to start with our four core platform design principles:
- We manage impact to create economic outcomes: our platform components are designed as aids to help our companies see the asymmetric upside that derives from being bold in impact.
- We are founder-centric: we design, experiment, test and iterate our platform components in close partnership with the founders in our portfolio. If they are not incredibly keen on it or don’t think it is useful, we do not build them. Simple.
- We follow the Pareto principle: we take an 80:20 approach to focus on minimum effort and high impact support (usually that is just one or, at most, two things at a time that can create massive wins).
- We are honest about our strengths: we focus on the components we are best equipped to provide (e.g. we help our founders manage their impact, or we may help them with a particular game-changing capital introduction), but we would not help our founders with commercial introductions in geography where our network is weak, even if we think we could somehow help there, it is not going to be a good use of anyone’s time.
As Cory Bolotsky has neatly summarised here, VC Platforms typically have ten main components: events and workshops, incubation and office space to online forums, and talent support, among others. The challenge then becomes which components to prioritise.
After surveying and interviewing most of our founders and considering the four principles previously listed, we designed our platform to focus on the elements in the upper right quadrant, and we break these down in the section below.
Impact Management (1/6)
What? We run the five dimensions of the Impact Management Project framework for each investment we make. With that in mind, we co-define, with the founder(s), the metric(s) that translate their respective business and impact potential and the 4-year goals for the intended social and/or environmental outcomes).
So what? As a result of this impact discipline, it becomes clear if companies are fulfilling their impact potential and we are fulfilling our mandate. This is connected to our incentives (read how here). We do not do well if society does not do well.
Tech-stack: website, to publish all impact cases made public for transparency; excel, to run the 4-year goal; rundit, for reporting and performance dashboards.
Main challenge: Measurement is imperfect, and we cannot reasonably measure all impact dimensions (it would be too effort-intensive), but the intention and direction of travel are nevertheless important, and once again, we apply Pareto — we seek to achieve circa 80% accuracy by expending 20% effort.
What’s next? Productise how our portfolio companies can leverage their social and environmental outcomes to position themselves in the market better, attract talent, and convert investors and commercial leads.
Investor Network (2/6)
What? Self-service investor directory where founders can request intros directly.
So what? The investment team can share our joint network with one click.
Tech-stack: Airtable, the browsable interface connected to Affinity; Bridge: the tool used to automate requests for intros; Affinity: the investment team CRM tool used for relationship and pipeline management; Zapier: the glue that syncs all tools.
KPI: #quarterly requested intros via MSM investor directory.
Main challenge: create successful distribution initiatives to ensure the directory is top of mind when our portfolio companies initiate their fundraising efforts.
What’s next? Build an automated way to share investment opportunities with the investors showcased in the directory. If traction continues, build out a more robust interface and functionality as a web app.
Talent & Hiring (3/6)
So what? Our portfolio companies can tap into the high number of applicants that reach out to us to switch to an impact-driven career autonomously.
Tech-stack: Getro, for the job board; Airtable, to manage the talent pool.
KPI: #quarterly shortlisted candidates contacted through our talent solutions.
Main challenge: the majority of the opportunities on the job board are for engineering positions, and we are not receiving enough inbound tech talent applicants.
What’s next? Build campaigns for tech talent showcasing the technical challenges and impact mission of the companies we back to improve awareness of the engineering opportunities.
Expert networks (4/6)
What? MSM’s Venture Partners (VP) and Limited Partners (LP) access.
So what? VPs and LPs create opportunities and help portfolio companies in the areas we are not naturally strong in (e.g. Vasco Pessanha, Director of Product at Outsystems, guides our product-led ventures).
Tech-stack: YouTube, to feature one impact venture per quarterly report to LPs; Notion, for Venture Partners to see each venture’s business and impact progress and signal how they can support their growth.
KPI: #quarterly opportunities created by our expert network.
Main challenge: our founders ask for support in certain areas or network in specific geographies we currently do not cover. More philosophically, we don’t know what we don’t know — that is, sometimes a venture really needs someone or something, and many times (probably most of the time), we don’t even recognise that need. We tend to surface only on what they or we see as a need; we don’t see the problems that we don’t recognise as existing, aka the tip of the iceberg. Do you know what you don’t know?
What’s next: strengthen our VP and LP network in the areas such as sales and organisational culture and development.
What? We publish on a ~monthly cadency to bring more visibility to the founders’ experience of partnering with us and how we look into impact opportunities.
So what? Having the discipline to write about how we do what we do forces us to be more critical and aligned as a team which, in turn, helps us deliver better social and environmental outcomes.
Tech-stack: Medium, here, is where we publish our pieces.
KPI: #quarterly blog post reads
Main challenge: prove that it is beneficial not only for us but also for founders and investors.
What’s next? Define our editorial content strategy to improve our pipeline outbound efforts.
P2P Support (6/6)
What? A shared slack workspace and a founder event once a year, in person, with real people :)
So what? Founders find meaningful ways to support each other in areas where investors cannot be helpful.
Tech-stack: Slack, a shared workspace between MSM and Maze-X that encompasses +50 impact ventures, mentors and advisors; Founder event, in Portugal, once a year.
KPI: #quarterly exchanged messages + qualitative feedback from founder event.
Main challenge: community engagement on slack is low.
What’s next? Build more meaningful spaces to bring the community together.
Our platform components are built with no-code tools. We continually run small experiments to understand which brings the most value to our founders, directly or indirectly. We do this to iterate fast and accommodate founders’ feedback in a participative and agile manner. By doing so, we hope to drop the components that don’t provide value and double down on those that do. By being disciplined, and as our portfolio grows, we hope to build infrastructure ready to evolve into a one-stop self-service digital product for businesses solving the most significant social and environmental challenges of our time.
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If you have any ideas, comments or thoughts on how to improve our platform for founders, please feel free to reach out to email@example.com.