Attention Head of Platform: Here's How to build an engaging founder community by starting with 4 key questions

Attracting, nurturing and growing an engaging founder community is essential for any venture capital fund that wants new companies to have a competitive edge. But it's no easy feat. Knowing where to start when building such a community can be challenging.

That's why we want to offer some helpful insights and four clarifying questions that will empower you to facilitate a thriving environment that fosters creativity, collaboration, and innovation.

In the current venture capital ecosystem with banks collapsing, interest rates soaring and fundraising tightening up, your portfolio companies need a support structure that enables them to learn from each other, cross share experiences and create new business opportunities.

Playing the lone wolf is a losing game

Many entrepreneurs play the lone wolf as they navigate the entrepreneurial jungle. While some thrive on their own, research and discussions with experts across different verticals in the venture capital industry shows that entrepreneurs who have a network to gather and share resources handle the arduous task of building a successful business better.

Recent studies have shown that VC-backed startups perform better when they access Networking, community, and corporate mentorship opportunities. A survey of venture capitalists conducted by the National Venture Capital Association (NVCA) revealed that 77% of VCs believe that having strong mentorship and access to a network of experienced entrepreneurs is essential to a startup's success.

Furthermore, the NVCA survey found that 87% of venture capitalists view having access to a supportive community of entrepreneurs as critical to a startup's success.

A recent study conducted by the Kauffman Institute also found that startups that are part of an accelerator program or other similar programs are more likely to succeed than those that are not. This study showed that startups that joined an accelerator program experienced a 10.6% increase in their likelihood of success. This indicates that participating in Networking, community, and mentorship opportunities can significantly increase the chances of success for VC-backed startups.

So, if the data points to a better outcome, the question becomes "how" can we build an engaging founder community with a strong network?

It begins with understanding community and the building blocks of a good platform.

What is a founder's community?

What exactly does "community" mean in the context of the VC startup world?

A community is a group united for a common purpose, although specifics can vary depending on several factors. For Venture capital, the intention is to bring together your startups and provide the opportunity to learn, exchange ideas, raise capital and resources but as well to create a sense of belonging.

Think of it as a strong support system that will keep your portfolio companies motivated, inspired, knowledgable and moving in the right direction as they make critical business decisions.

How do startup companies Benefit from a community?

It creates a solid peer-to-peer network that evaluates the lessons learned by each company and then applies them to benefit all. Additionally, it creates a database of exceptional and beneficial insights that help the community at large and aids in making future investment decisions with more foresight.

• Communities can speed up support and success, improve customer retention, and deliver crucial product insights when appropriately used.
• Communities can also produce measurable value for businesses through content, events, online advocacy and marketing, technology production, customer support, and education.

What makes these environments "sticky" is the intangible value that members obtain from the experiences offered.

With a relatively small team, the community unlocks the ability to scale value creation. But don't take our word for it. Let's consider a real world example.

Ever heard of Duolingo?

Most people have. Maybe you've even signed up for some free Spanish or Italian sessions. What you may not have realized is that Duolingo has an incredible communitythat enabled them to scale from 4 million to 50 million language learners.

And Duolingo isn't the only company leveraging the power of community. Hubspot, Salesforce and Notion are just a few more examples of brands that understand the power of community. The more community members participate, the more valuable and engaged the community becomes.

But how do you create that same level of engagement within your portfolio ecosystem?

Every early stage company struggles with the same core issues including vendor deals, tech stack, lack of mentorship etc.

Lacking access to solutions that can enable founders to make more informed decisions wastes both time and money. As a result, the startup gets hurt and so do the venture capital funds that you've invested into the team.

The need for Venture Capitalist Firms to build their own communities is growing

Quoting your VC platform as a "value add" to investors is both a legal right and a strategic move because more LPs are seeking VCs that look beyond the fundraising season. But when you consider how hard it is to provide up-to-date 1:1 assistance with each new startup that joins your portfolio, the value of a platform exponentially grows beyond just a nice to have.

When was the last time you shared a spreadsheet with vendor data to a founder only to realize later that half of the information shared was out-dated at best. Or worse still, that it sent them down the wrong rabbit hole leading to a poor decision on their end?

That would no longer be an ongoing concern once you invest that intital energy and time to build an engaging founder community with the right resources. After a while, the cross communication and collaboration might even leave you more time to focus on more pressing matters as users learn to help each other out within the community.

Moreover, you will finally get reliable data and access to information that your fund can use to prove ROI on all your efforts.

Many directors or heads of platforms with informal relationship building roles struggle to make a business case for their hard work. There's often no paper trail and insufficient data to determine return on investment. But with a formalized VC platform and an engaged community, you'll finally get data to back your intuition and hard work.

The building blocks of a community your founders will love

Each venture capital firm will have unique needs and therefore a unique platform. There's no one-size fits all, but here are some fundamental aspects that would apply regardless. Use these as the building blocks to get you moving in the right direction.

Developing your platform strategy

Always begin with the end in mind. Consider your VC funds objectives and overall company strategy. Then map out your platform strategy to align with the needs of both the fund and founders. Clearly identify your goals, objectives and what you'll offer the community.

Many platform leaders report great success when they build their platform strategy around relationship building. Of course platform is a broad topic with many moving parts, so for the sake of our focus, we encourage you to think about three areas namely: the overall ecosystem, the network you want to build and the community of founders your platform will serve.

When thinking about the overall ecosystem you ought to consider anyone and everyone who could be connected with your firm and your founders. These can be vendors, strategic partners etc. Your network could include significant players and stakeholders that aren't your direct internal team. They could be active or yet to be activated within the next few years. And of course your community must include your entire portfolio. Having an overview of all the different people you serve or need to engage for your platform to add most value will inform the right strategy.

Do this before launching any program or online site. Revisit your strategy at least twice a year after launch to review and improve upon it once you get feedback on the ground.

Deploying the golden circle rule

It may seem counterintuitive to the average venture capital firms but the best way to ensure your VC platform is both valuable and profitable is to apply the golden circle theory coined by Simon Sinek.

This theory argues that thinking beyond the rational and practical benefits of your offer is the best way to ensure it resonates with your intended user. In our case, we want to build a platform that benefits our fund and founders. It's always best to "Start with WHY". Simon Sinek advices that we should never make the "success of the platform" the main goal. That should be the outcome we want. Instead, we want the purpose to be the main focus.

So you want to clearly articulate the purpose of this founder community. WHY would founders want to actively engage in this community? WHY do we want to grow the community? What's the driving motive for us and what's a driving motive for the founder? The more clarity you have on this, the easier it will be to know what kind of a platform to build.

Identifying the shared interests/needs

Remember community is about bringing people together around a similar cause, interest or even need. In the case of early stage companies, it's often better for venture firms to focus on solving needs as the basis for their community.

As head of platform, determining the overlapping needs of your portfolio companies should guide your strategy and the setup of your community.

All venture capitalists invest in startups with the sole intention of getting a positive return on investment. See if you can align the current gaps your entrepreneurs are facing with that goal and use the platform and community as a tool to facilitate a win-win investing scenario.

The 4 clarifying questions you must answer

Starting any community is similar to throwing a party. Preparation is key. A simple approach to ensure you've covered every angle is to think about and answer the following four questions:

1. What tools and systems do I want to use to build, manage and track growth in my community? Venture capital funds are notorious for slacking in their relationship management tools. Make sure to pick the right CRM and other tools that can enable you to automate a lot of the work that comes with building community.
2. What content will your platform use to kickstart conversations? Communication is the centrepiece of any engaging founders community. But you can't just spam people. Venture capital firms often have access to people, deals and information that many startups would find extremely valuable but you must have a proper strategy for creating, distributing and promoting this information in the form of content so your community receives it as value instead of "distractions."
3. How will you track and measure your best relationships? All relationships are not made equal. It's important to monitor and maintain all relationships but some will require more one-to-one attention. By leveraging the right automation tools, you can engage with everyone all at once and pay close attention to the most important people.
4. What type of events does your platform wish to facilitate and promote? In a typical venture capital investment fund a startup's access to resources is limited by the funds investors and their ability to build bridges that foster knowledge sharing. How do you want your venture capital fund to stand out in contrast? The types of events you offer will help give you that differentiator and your founders will reap benefits that show up as revenue. Events can be as intimate as small founder dinners or as large as large scale conferences and retreats depending on your resources and fund vision.

Once you've outlined what your community will look like, build anticipation and set the right expectations. Let your people know what they stand to gain out of this platform.

Setting up a community-driven platform

Figure out the kind of support you want to offer your founders. Will you create thought leadership and mentoring resources as well as vendor information? Will you offer marketing training and workshop programs or talent management resources? There's no right or wrong but you need clarity on the core focus of your community so it's clear to every participant. Creating a program is a good way to build conversations around the key concept you want your community to consume.

For example, if you realize your founders need help with vendor relationships and tech stack, these would be the key focus for your VC platform. So you'll need to offer those solutions as well as programs that continue to educate around these core topics. That will spark conversation and engagement. It will also help you quantify the value of venture capital invested in building such a platform because when you know how a startup company improves from receiving access to these resources, you now have data showing return on investment for your platform.

Creating an integrated solution to foster high growth

Many institutional venture capital funds may attempt to build a community by hosting an random event or publishing a blog post once in a while with no real integration to their overall vision. This often leads to missed opportunities and a botched concept of community. The fact is that building a community is a lot of consistent work. And that work must be tied to an actual plan within a system that enables tracking and measuring.

In other words, even if you spend the rest of the year hosting great events and connecting your entrepreneurs to the best vendor deals in the country but you don't have a system that managers all of that, you won't know what's working and what isn't. Worse still, you won't have a thriving community. Integrating all your community and relationship building activities with a system that operationalizes all your efforts is extremely important. It won't happen overnight will be resource heavy at first but the money invested should always be ROI positive when done well.

Smart funds invest in an approach that is focused on a specific investment thesis or around a specific category that is critical for their founders. So don't just fall into the trap of following the masses and doing what others in the venture capital industry proclaim. Think from the inside out and really determine what gap your platform and founder community will fill.

CONCLUSION

Venture capital investments can have a longer run-way and a higher chance of positive return when we learn to implement formalized post fundraising support. None is more powerful today than building and funding a platform that nurtures a community.

By building an engaging founder community with a clear mission and values, venture capital firms and founders can create a space where members can come together to share resources, exchange ideas, and, ultimately, build successful businesses. But it's not just the early stage VCs who can interact more with their startups. Depending on the culture at your firm, general partners can also have better visibility and get more accurate data of performance and potential.

Building an engaging community to support the founders within a portfolio ecosystem can be a great way to provide added value to the investments and keep all stakeholders happy through fostering a culture of collaboration, communication, and trust. By answering the 4 questions in this post, you have a clear sense of direction and are one step close to launching your funds platform.

If you'd like a VC platform that automates and manages vendor relationships for your portfolio companies, learn more here.

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