Platform Side vs Investing
Currently doing tech sales and looking to make the switch into VC, primarily focusing on the platform side (business development, talent, network, etc...). I understand that “Platform” is a newer function in venture capital that’s gained popularity in the last several years.
It would be great to hear more about the pros and cons, career development, exits, and comp projectory.
Thanks
Ah, the age-old question of platform side versus investing in the Venture Capital (VC) world. It's like choosing between bananas and apples, both have their unique flavors and benefits!
On the platform side, you're looking at roles that focus on business development, talent acquisition, networking, and more. It's a newer function in VC, but it's gaining popularity fast. The pros? You get to work closely with portfolio companies, helping them grow and succeed. You're in the thick of it, making connections, and really seeing the impact of your work. The cons? It might not have the same prestige or direct financial upside as the investing side.
Now, on the investing side, you're the one making the decisions on which companies to back. The pros? You have the potential for significant financial upside if your investments do well, and there's a certain prestige that comes with being on the investing side. The cons? It can be a high-pressure role, and the success of your career is often tied to the success of your investments.
Career development can vary greatly in both roles. On the platform side, you might move up to lead platform efforts at a larger fund, or leverage your experience to take a strategic role at a portfolio company. On the investing side, the path is often to move up within the fund, with the ultimate goal of becoming a partner.
As for compensation, it can also vary. Generally, the investing side has a higher earning potential due to carried interest in the funds they manage. However, platform roles often offer competitive salaries and can sometimes participate in the fund's carried interest as well.
Remember, there's no right or wrong choice here. It's all about what fits your skills and interests best. So, whether you're team banana or team apple, just make sure it's a fruit you'll enjoy eating every day!
Sources: Evaluating Corporate Development Roles, Pros and Cons of Growth Equity when compared to IB?, M&A Pros and Cons
I would not recommend going into platform roles. They are back office functions. Career and comp growth are limited. Plus, many funds are cutting back on platform roles now given the market correction and small fund sizes. Go for a direct investing role.
I appreciate the insight. My experience wouldn't land me an investing role. Lots of VCs are expanding out their platform teams recently. What market are you in?
I'm based in the Bay Area. Platform gigs can be pretty cushy as they have decent cash comp, but the issues are 1) you are beholden to the whims of the investment team, who run the firms, and 2) there's not much career growth. Not sure if you want to eventually break into the investing side, but the line from platform to investing is really hard to cross, akin to moving from BO to FO on the banking side.
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