Why VC’s Platform Teams Are on the Chopping Block

Shortly after the exit of five of its partners, Sequoia Capital let go of seven members of its in-house recruiting and talent team, sending a clear signal to other firms that it’s time to reevaluate the platform teams, which grew exceedingly large during the record bull run. Across VC, I suspect there are thousands of these platform employees—who don’t do deals but instead help portfolio companies with recruiting, sales and marketing, among other tasks. And as a group, they’re now on the chopping block. 

Andreessen Horowitz popularized the concept of offering startups both capital and hands-on support. When the firm launched in 2009, it modeled itself after a Hollywood talent agency and believed offering help beyond a check with company building represented the epitome of founder friendliness. Other firms, intrigued by Andreessen Horowitz’s bold new strategy, copied it. 

As a result, the makeup of VC firms has changed dramatically. The number of noninvestment professionals on staff has increased from 27% of staff to 37% since 2000, even as the average venture firm has expanded its headcount 124%, according to data collected by a community of platform venture capitalists, which claims that having these employees leads to outsize returns.