The world of venture capital is constantly growing. In fact, venture funding in 2021 raised over $64 billion – in one quarter!
That’s the highest amount to be raised in a single quarter in the history of the American venture world and 43% more than all the funding raised in 2020.
One of the fastest-growing roles in this domain is that of the Platform. It has slowly gained popularity over the years and covers a wide range of post-investment support and services.
Want to learn all about venture capital firms and how they are the Platform? Keep reading to find out!
What Is Venture Capital?
Let’s start with the basics. Wondering, what exactly is this term that everybody talks about so much?
Here is a primary venture capital definition: VC is a form of private equity. It is financing at its core that investors provide to small businesses and other kinds of startup companies.
These businesses are chosen based on their long-term growth potential. VC can be provided by banks, financial institutions, investors, and other parties.
Wondering about private equity vs venture capital? Well, that depends entirely on the business in question and its long-term financial goals and needs.
However, most people don’t know that venture capital isn’t always based on a monetary sum. It also takes the form of support, services, technical and managerial expertise.
How Does Platform Come in Venture Capital?
Well, Platform is still an ambiguous term. Different firms will define their respective Platform differently. But essentially, a VC platform could include services such as:
- Marketing and design
- Sales
- Recruiting
- Consulting
- Operations and communications
Each venture capital firm can then decide how many of these services they wish to provide. Although some VC companies will charge a small fee for providing these additional services, they are often free.
The idea is to supplement funding with expertise that helps secure growth and potential.
A Brief History of Platform
Platform services aren’t a novel opportunity by any means. They have been around since the 90s. When VC started as a serious effort, many firms began offering these additional services that hadn’t been provided in the past?
Why? There was a gap in the market for these services that helped businesses reach their full potential. Many small companies needed help getting additional collaterals like marketing and recruiting going.
However, they often didn’t have the bandwidth or the technical know-how to pursue it in earnest. This lead to the start of venture capital companies that began helping small businesses develop verticals and launch with success.
Today, Platform has been pushed by Andreessen Horowitz, who offers a wide range of Platform services to new entrepreneurs. Firms like Google are entering the Platform space as well. This indicates how much potential for growth there is in this field, and why so many companies are investing in it.
Why Has the Need for Platform Become So Imminent?
Well, startups and the business landscape are becoming increasingly competitive, and as such, standing out in the space has also become increasingly challenging. In addition, as the private equity platform space grows, so makes the increased demand.
Following are the three main reasons this space has grown so much.
Founders Are Looking for Support
In addition to financing, entrepreneurs are questioning the benefits they get out of a package. Since it isn’t just capital that helps a business grow, the approach to business development has become more cohesive.
Founders are thus looking for companies that can provide a wide range of services.
VC Firms Are Looking to Differentiate Themselves
It isn’t just startups that need a platform to establish themselves. Instead, both new and established VC firms need an extra appeal to differentiate themselves in the market.
In addition to offering to finance, they realize their support is made more appealing if they have additional services to back them up.
Investors Alone Can’t Do It All
Investing is all about managing a healthy and well-balanced portfolio. However, as their portfolios grow, they can’t offer as much support or assistance as previously expected.
Instead of getting pushed in many directions, investors realize it is essential to offer these services. This will ensure they keep doing what they do best – building their portfolios and predicting growth.
Platform Roles
There are two main kinds of roles to be found within the Platform space. The first is a general Platform role, which requires good working knowledge in the following skills:
- Multitasking competing priorities to satisfaction
- Receptive to feedback and implementation of feedback
- Building relationships with stakeholders
- Organized with an eye for detailed oriented work
In addition to general platform roles, there is also space for function-specific functions. These roles typically require skilled expertise in a specific domain. Whether it’s marketing or business development, professionals in this field will need prior experience catering to particular problems.
They will also need to be community builders who can work across teams, domains, services, and platforms.
Every Venture Capital Fund Needs a Platform
The Platform is the answer to skyrocketing support and services as funds and deals become increasingly competitive. While in the past, Platform was a ‘good to have,’ but today, it is simply non-negotiable.
Launching a venture capital fund requires serious spearheading to achieve tangible results. This has been one of the main reasons Platform has grown to such great heights.
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