Partnering with VCs & Portfolio Companies: Q3 Spotlight

Partnering with VCs & Portfolio Companies: Q3 Spotlight

Discover the value of partnering with venture capital firms and portfolio companies for SaaS organizations and how to get started.

Partnering with venture capital (VC) firms and portfolio companies can be an effective way for SaaS organizations to expand their network and drive revenue. This quarter, we spoke with professionals at VC firms, private equity (PE) firms, and other portfolio companies, as well as partnerships leaders at SaaS organizations, to learn more about these types of partnerships and best practices for implementing them.

Over the next few weeks, we’ll share our interviews with those professionals, digging deeper into their experiences, insights, and recommendations. Today, we’re going to dive into our high-level takeaways from the discussions.

Thanks to xAmplify for sponsoring this quarter’s spotlight series!

xAmplify makes it easy to generate partner-led deals with their simple, automation-focused platform. More than just a PRM, xAmplify gives you the ability to quickly and easily engage your partners by sending them canned campaigns.

There are many ways to partner with VCs & portfolio companies.

Like many other types of partnerships, there’s no one-size-fits-all for partnering with portfolio companies. In fact, there are many different ways to forge a relationship built on mutual success. The partnership models our interviewees discussed are broken down into four categories.

General Networking

In general, it’s good practice to meet new people and build relationships, not just when you need something. When you focus on getting to know people and identifying opportunities to collaborate, you’ll develop more robust relationships over time.

Doing a healthy amount of networking is recommended for both business development and venture capital professionals. Neither should focus solely on founders either. There’s value in connecting with a broad network across industries and seniority, including business development professionals, engineering leaders, CEOs, and more.

Existing VC Programs Designed to Support Portfolio Companies

Many venture capital firms implement programs designed to support the growth of the companies they’ve invested in called incubators. Some popular startup programs include YCombinator, Techstars, and 500 Startups.

Targeting incubator programs is an effective way to reach startups and create groundswell around your product. It’s common for companies to partner with incubators to offer a blanket discount on services. While large programs will have a broad audience, they’re also more likely to be saturated with existing resources. Consider targeting niche programs whose members match your target buyer profile.

Expanding Your Network Via an Investing Firm

One of the most valuable aspects of having an investor is being able to leverage their network. There’s a built-in expectation that investors will make introductions into their network. If there isn’t someone on their team proactively making introductions, you should look for relevant connections and ask for introductions.

Utilizing VC Firms as a Sales Channel

For this type of partnership, the portfolio company doesn’t need to be your investor, instead, they’re seen as a channel. Companies like AWS and Twilio> have VC-specific partner teams that go directly to a firm and set up discount deals.

This channel doesn’t work for everyone. Typically, universally used tools (think AWS — everyone needs some sort of cloud-hosting service) perform best here. When you have a more niche set of tools, it can be challenging to find an ideal fit.

You can’t force a partnership.

Venture capital and private equity firms will do whatever it takes to support the growth of their portfolio. At these firms, investors are entirely focused on the success of their portfolio companies, so all of their efforts need to support that.

When you serve a niche industry, it can be more challenging to partner with portfolio firms effectively. Networking and broadening your connections can be valuable, but if you’re trying to sell through portfolio firms as a channel, you’ll be playing a game of chance. Investors only work with a handful of companies each year. You may not be a good fit for any of those companies for a long time.

If the value you’ll bring to a portfolio is clear, partnering will be a relatively easy path. Do your research and identify portfolios that overlap with your target audience. Approach portfolio firms with a growth-oriented value proposition focused on how you can help achieve their goals. When you approach a portfolio firm, you should follow the same due diligence you’d do when prospecting for partnerships in general.

There’s immense value in broadening your network.

In partnerships, your network is one of your strongest assets. Your newest connection might know your next partner, employee, customer, mentor, or investor! No matter what your goals are, engage with individuals of all levels of seniority early and often. Seek to make connections that support their goals whenever possible and make clear your own goals so they can do the same for you.

Learn more from the professionals.

Each Tuesday, a professional from a VC firm, PE firm, or tech company will join us to share their insights and best practices. Follow us on LinkedIn to make sure you don’t miss any updates.

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