How to Drive Value with Venture Capital Partnerships
This article is part of our VC Portfolio Relations spotlight series. Each week, a different professional joins us to share their experience partnering with organizations as a venture capital or private equity firm. Learn more in the intro article.
Domenic Perri (Dom) is a partner at Vertex Ventures US, a pioneering early-stage venture capital fund, where he’s been since 2019. Before landing in the world of venture capital, Dom spent many years in corporate and business development at companies like Dropbox, Tesla, Juniper Networks, and Flashpoint.
Early in his career, Dom worked as a Business Development Manager at a small startup, BRAK Systems. There, he worked directly for Robert Herjavec (of Shark Tank) to pioneer enterprise cybersecurity. Today, Dom joins us to discuss his experience building relationships with VC firms throughout his years in business development and how he’s building a platform at Vertex US today.
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The Basics of VC Partnerships
Different firms focus on many different stages of venture funding. Dom’s viewpoint comes from early-stage investing. “We’ve been doing this for about six years now. Of the thirty companies in our portfolio, there’s a set that’s scaling and another set that’s early in their journey. Helping them can be done in many different ways. That’s where relationships come into play.”
Dom focuses on three main “genres” of partnerships between business development professionals and VC firms. “First is general relationship building. It’s good to meet new people and build relationships not only when you need something. Doing a healthy amount of getting to know people and looking for opportunities to help each other is always good for any business development or VC professional. We aim to have a broad network. I regularly talk to business development leaders, product and engineering leaders, CEOs, CIOs, and more.”
Out of the general relationship building comes the other two genres of partnerships. “VC firms can be an excellent source of new information and ideas. As a business development professional, you can lean on us to help sharpen your strategy and further inform the rest of your work. VCs also enjoy hearing what’s top-of-mind for you, as this can lead to unique ways to work together.”
Finally, those relationships can lead to formal partnerships and potentially even acquisitions. “As business development leaders are looking to fill their gaps with partnerships, a VC can help with a number of goals and strategy-related efforts, such as how to address modern problems and trends like cloud infrastructure, data management, and security. There are many innovation shifts happening that could provide opportunities for beneficial collaboration.”
How long does it take to build a partnership?
While all partnerships are about the long play, partnerships with VC firms are really about thinking long-term. “The vast majority of partnerships take time. It comes back to the importance of genuine relationship building. You need to give more than you ask for and try to understand how you can help people by exposing them to new ideas, new companies, or connecting them with other professionals in your network.”
There’s no steadfast rule as to the timeline for building partnerships. Dom expanded, “It depends on what you’re trying to achieve and what outcome you want to drive. If it’s a long-term, strategic, better-together story, that’s gonna take some time! Scenarios like that require a large pool of the right people that you’ll likely have to manage and align as a business development leader. At the same time, you’ll also need to be a great communicator to oversee the entire process. Coming from an early-stage investor perspective, we have a long-term view of outcomes. Strategic partnerships take time, while mergers and acquisitions (M&A) tend to be a bit more transactional and process-oriented. In fact, acquisitions happen faster than partnerships in many cases; however, the one common denominator is building the relationship.”
What best practices should organizations keep in mind?
Before Dom joined Vertex US, he sat on the other side of the table. He shared a negative experience from that time that helped shape how he engages with organizations as a VC. “I was leading alliances at a large multi-billion dollar company and working on a number of different partnerships. I got connected to the BD person at a small venture-backed startup who wanted to partner with us and he became overly aggressive in trying to get traction, which made for a poor experience.
Dom explained, “This is a very people-oriented business. Particularly so in venture capital. It’s very relationship-driven. Being overly pushy is not the best way to manage a relationship. Even as we are talking to business development leaders or industry executives, we’re careful with how we recommend some of our portfolio companies. It’s not about throwing spaghetti at the wall and seeing what sticks. We genuinely want to understand their priorities and what problems they’re trying to solve, and then identify a few portfolio companies that fit well into that narrative. This level of collaboration can be a nice way to organically introduce our founders or business development people to take it from there. Your efforts shouldn’t be transactional. The effects of a negative experience do not easily go away.”
Before pursuing a relationship with a firm like Vertex US, there are a few things you should do. “Take some time to research and learn a little bit about us, where we invest, what stages we specialize in, the types of portfolio companies we have, and even some of our recent investments or thought pieces. That can really inform what we care about and where we focus. I always do a little homework myself and come ready with questions.”
Dom continued, “It’s okay to have an ask when you come to the conversation. I want to build a long-term relationship where you feel comfortable asking something of me. But be clear about what you’re asking for, the outcome you’re trying to achieve, and how it could be beneficial for both of us. I appreciate it when someone comes prepared and clearly communicates the outcomes they have in mind.”
Expand (or Launch) Your VC Portfolio Relations
This quarter, we’ll be digging into insights from professionals in venture capital, private equity, and business development! Be sure to follow us on LinkedIn so you don’t miss any updates.
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