Understanding how VCs can optimize portfolio support

This article originally appeared in Forbes.

There are essentially four parts to the venture capitalist’s (VC) job: finding companies, picking winners, winning deals and adding value. This fourth pillar should take precedence right now, a time when, according to my company's research, deal volume is down and VCs are focused on supporting their existing portfolio companies toward successful future rounds or exits.

Portfolio support refers to all the ways an investor can add value and help their portfolio companies succeed beyond just providing capital. This typically looks like:

• Business Development: Helping close deals early in the life of a startup, or particularly big deals or important partnerships

• Recruiting: Sourcing executives and interviewing and convincing strong candidates to join the startup

• Fundraising: Offering advice and introductions to potential investors from the VC’s network

• Advice: Sharing a 10,000-foot view that founders and management teams on the ground may miss

• Sounding Board: Providing an ear in moments of uncertainty or transition

With capital deployment slowing across the industry, it’s increasingly important for VCs to find new ways to support their investments. This article explores how firms can use their networks, brand and technology to strengthen portfolio support.

The tools VCs have to create value

Beyond capital, VCs rely on several levers to make a meaningful difference in a company’s growth, namely their networks, brand and market data.

1. The network effect

By far the most important tool a VC has to create value is their network and ability to make introductions. Whether it be for business development, recruiting or fundraising, warm introductions are the most direct and impactful way that a VC can add value.

Even when it comes to offering advice, an investor likely knows people who can provide well-informed guidance (i.e., a strong design leader to advise on design or a strong sales leader to advise on go-to-market strategy). It’s not a requirement for the investor to be an expert in all the areas themselves.

Rather, being able to tap into their existing relationships is an incredibly valuable asset they have to offer their portfolio.

2. Leveraging brand and community

A firm with a strong brand can help its portfolio companies indirectly with increased credibility.

This often happens in the context of hiring. Talent may source roles from the websites of well-known firms or, having entered the hiring process another way, be encouraged to join the company based on the calibre of the firm(s) funding it.

As a tool to create value, communities are going from strength to strength. Every portfolio company—especially founders and sometimes executives, too—benefits from having access to a community of peers that they can cross-reference with.

This might look like events that bring "sister" portfolio companies together to understand how others are solving similar problems and benchmarking their metrics. More existentially, building a company is a lonely job. When times get difficult (especially in a down market, as we have witnessed over the past few years), it’s easy to let the hardship get to your head. Having a community to lean on really helps.

Communities need to be built intentionally, and they require a lot of effort. But the benefit to portfolio companies is significant.

3. A data resource

Finally, VCs can add value through the data and benchmarks they provide to the companies in their portfolio. Founders often find themselves seeking data when making particular decisions or when trying to understand their own startup’s trajectory. For example, benchmarks can help founders understand what "good" metrics look like when fundraising or pursuing M&A.

Investors with a good pulse on market data can quickly become a go-to resource for founders. This saves founders time—when there’s always a million other things to do—and boosts trust through the additional value provided.

Technologies that strengthen portfolio support

Technology has become a force multiplier for portfolio support, streamlining workflows like introductions, data sharing and events. With the right tools, VCs can support founders more efficiently and at greater scale:

1. A CRM with relationship intelligence

Given that introductions are a VC’s most powerful unit of value, it’s practically a must-have to track your firm’s network in a structured, rigorous and ongoing way. In practice, this looks like a CRM with automated data capture (communications data from emails, calendars, etc.) that passively maps out every relationship in a firm’s collective network, without the need for anyone to manually enter data.

This frees up dealmakers to focus unapologetically on building relationships and meeting new "nodes" in their network that could eventually turn into new deals or valuable intros for portfolio companies.

Relationship intelligence builds on this foundation by using an AI-powered algorithm to quantify the real strength of each relationship, helping unlock higher-quality introductions. However, it doesn’t negate the need for LinkedIn in the VC’s portfolio support toolkit. First, second and third-degree connections on LinkedIn are still an essential fallback to harvest introductions from.

2. Datasets and benchmarks

As mentioned earlier, access to datasets and benchmarks can be extremely valuable to portfolio companies. For example, when it comes to compensation, information aggregated by recruiting firms or compensation benchmarking tools can help founders ensure their offers are on par with industry norms.

Benchmarks vary by stage, role and geography, and don’t always reflect equity, so this is where VCs can help founders contextualize the data.

3. Communications and data collection

Founders often have limited time to respond to investor requests. Tools that simplify portfolio data collection can boost efficiency while minimizing the burden of work on founders. VCs should align on the most important KPIs to keep data requests lightweight, and view reporting as a two-way street—offering founders useful feedback, benchmarks or analysis.

Turning portfolio support into strategy

Portfolio support isn’t just a nice-to-have—it’s becoming a critical differentiator.

VCs who approach it with the same intentionality as sourcing and investing can deepen founder relationships, extend their firm’s brand and open doors that accelerate growth. The firms that do this well treat support as a strategy, not a side function.