Services push still in high gear at venture firms


Portfolio services remain a huge priority at venture firms, as the Menlo Ventures announcement of its Fuel program illustrated last week.

Firms continue to build out support organizations, add partners and compete for the hearts and minds of entrepreneurs. They also seem to be thinking smaller and targeted these days rather than broad and comprehensive.

Portfolio services became a hot topic in the industry during the past half-decade after upstart Andreessen Horowitz cobbled together an expansive organization to offer advice and support on a variety of topics, from market development and technical talent to regulatory affairs.

Firms wanted to emulate the buzz the program sparked among entrepreneurs. That enthusiasm continues today.

“I do see a push,” said Katie Belding, a partner in charge of portfolio services at Norwest Venture Partners. Norwest itself has expanded its offerings over the past few years with key hires and has marketed the services more actively to show an interest in helping portfolio companies.

“Everybody has money,” Belding said. “In today’s market, if you don’t offer services, you’re sending the wrong message. We need to cover what entrepreneurs don’t have time to think about.”

At Menlo, the intention is to beef up support for what it sees as the key needs of young portfolio companies. The firm hired Jordan Ormont as a talent partner from Kleiner Perkins Caufield & Byers, and built its program around four key functions: developing sales strategies and teams; developing marketing strategies; assisting with partner and customer development; and aiding with recruitment.

“We felt like a lot of the other services programs in the industry were broad,” said Matt Murphy, the Menlo managing director responsible for putting the effort together. “They weren’t really put together in the form of a program.”

Menlo’s aim was to be tightly focused.

Even smaller firms have gotten into the act. Felicis Ventures late last year announced it had brought on a senior advisor for talent and people operations.

At Norwest, support is offered in a number of areas. The firm assists portfolio companies in developing hiring procedures and vetting candidates, aids in marketing and PR efforts, and advises companies on human resources strategies and best practices.

It also helps match companies with potential customers and partners, and assists with legal and financial matters. The firm, in addition, has an online community for its portfolio companies.

Other firms have been less quick to jump on the support program bandwagon. Some still rely on a general partner’s connections to find bring in outside experts, such as founders of other startups, as consultants when needed.

Still, the push for more than just money continues at a steady pace in venture, and it is showing no signs of slowing down.

Photo of Mark ‘The Boz’ Boslet

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