The VC Community Honeycomb: Identifying and Prioritizing Your Firm’s Community

8 min readNov 23, 2020

This article is part of a series of posts for venture capital platform leaders and investors introducing strategic frameworks to more effectively design a VC firm’s platform strategy.

Venture capital is inherently a people-focused business, where individual relationships are the most critical differentiator for any firm. As previously discussed, there are three categories of engagement that firms use to build and strengthen these human relationships.

Often, a firm prioritizes their efforts based on which communities and sub-communities are most important and most uniquely aligned to the firm’s strategy.

All venture capital firms can generally organize the potential scope of their community relationships into the following seven types of community — a framework I call “The VC Community Honeycomb” (shown below).

While not every firm focuses on building these relationships the same way, and not all firms care about all seven pieces of the VC Community Honeycomb equally, these groupings are consistent across most venture firms.

To get a bit more granular, each of the seven communities within the honeycomb have a number of unique sub-communities. While there are an infinite number of ways to segment each community (with varying degrees of granularity), for simplicity sake, we will use the following breakdown of 25 sub-communities in our approach to defining and prioritizing a VC community strategy.

So what do these communities look like in practice?

As a case study, let us take the portfolio community — a sub-community that is typically perceived as the crux of most venture firms’ platform strategies. It is important to recognize that every VC fund will look to build and engage this community in very different ways. For example, if a particular fund has a more hands-off, low-ownership, low-engagement investment model, they may not actually identify their portfolio as one of the most important sub-communities to engage with — or, at the very least, they may only focus on engaging the sub-community of portfolio founders, and not invest time in engaging others on the team as part of the firm’s community. Alternatively, if a fund has a more concentrated investment approach, takes significant ownership with each investment, and provides meaningful involvement with their companies, the portfolio community will likely be their most critical sub-community. Beyond simply using their platform to engage and support portfolio founders, for a firm that is deeply focused on portfolio and talent support, they may focus on building community at all levels of a company, from executives to individual contributors, and even focus on sustaining a community for portfolio alumni as portfolio company employees leave and start a new companies or seek future roles.

Similarly, you can look at the sub-community of corporate executives. For funds that focus primarily on supporting their portfolio companies with customer introductions, they may concentrate their corporate community building around CISOs, CMOs, Chief Digital Officers and other end-users and purchase decision makers that are relevant for their portfolio companies. Alternatively, funds that focus on helping companies with their exit strategies (e.g., later-stage growth equity investors) may primarily build relationships with heads of corporate development or internal corporate venture arms who could be involved in strategic investment or serve as a potential acquirer over time.

This broad paradigm of community strategy within sub-communities plays out in many ways based on a fund’s unique strategy and priorities across all seven major communities identified in the VC Community Honeycomb.

The key to a successful community strategy is focus. The best firms are those that build their team and strategic initiatives deliberately based on their most critical and uniquely aligned sub-communities.

Since no venture firm can effectively build a strong and uniquely valuable community across all 25+ sub-communities, here are some critical questions to help determine which sub-communities are most important for a firm to focus on:

Dealflow: What are the fund’s most important and highest yield sources of quality dealflow?
Portfolio Support: What does the fund promise to provide founders in terms of post-investment support? What boundaries does the firm establish for the extent of the direct support they can provide to each company? What areas is the fund uniquely positioned to add value for portfolio companies, compared to their peer funds and co-investors?
Investment Strategy: What is the general investment strategy and target level of ownership or involvement for portfolio companies? How strong is the firm’s brand to win investment allocations in competitive situations?
Team Strengths: What career successes has the team experienced and what personal networks have each team member developed historically? What areas of focus are most genuinely aligned with the team’s individual and collective strengths as well as the firm’s DNA?
Fund Maturity: How mature is the fund’s LP base? What relationships need to be strengthened and which hypotheses need to be proven to raise the next fund?

In general, a fund will use these areas of focus to determine which sub-communities are most important to the firm and most uniquely aligned to their strategy. Typically, this will result in approximately three to five priority sub-communities for the firm to focus on and invest in community engagement efforts for.

Community Prioritization

There are many different ways that firms can choose to use the VC Community Honeycomb and sub-communities in practice. I find that a 2x2 matrix is a helpful tool to arrange the sub-communities based on the factors of importance and uniqueness.

Below is an example of how one fund could use this framework to assess these 25 sub-communities across the two axes discussed: importance (y-axis) and uniqueness (x-axis). In answering the questions posed around community focus and prioritization, a firm will want to concentrate their community efforts on the sub-communities that are unique to them (e.g., relationships that differentiate them from peer VC firms) and that are important to the firm, their portfolio companies and, at times, the fund’s limited partners.

While these points can be plotted individually based on one team member’s best guess of graph placement, I have found that the most effective way to use this framework is by having a firm’s entire team complete a community prioritization survey to generate this output based on the average responses across all team members to a large set of question related to each sub-community. While I do not have that survey ready for public use just yet, I have worked with a number of firms on this exercise — feel free to reach out to me and I can share a bit of how it works.

In the example fund 2x2 above, this output was generated from the average of their team’s community prioritization survey responses. As you can see, their areas of community prioritization get plotted in the top right quadrant. This fund had a relatively typical community prioritization output, with key areas of focus being on co-investor relationships (downstream investors for dealflow and upstream investors for follow-on), founders to track and nurture for future investment opportunities, and founders and executives within their portfolio.

Why Community “Uniqueness” Matters

As the venture capital landscape has grown, venture funds have been forced to specialize and differentiate more in order to remain competitive. Because of this, it is crucial for funds to focus on what unique sets of relationships they have to build a community around. While many investors talk about their CxO relationships with the Fortune 1,000 or their strong network of executives that they can help portfolio companies recruit, the reality is that there are a finite number of those people and funds need to work harder than ever to actively cultivate relationships with these types of individuals and strengthen these communities.

In a previous post, I introduced the concept I refer to as the rule of mutual affiliation. Fostering community relationships that result in an authentic mutual affiliation takes significant effort, but matters a lot. For example, let us pick a global company like Procter & Gamble — for most venture firms, having the CxOs of P&G as part of their community is very valuable, as P&G could be a customer, acquirer, co-investor, or strategic partner for many of their portfolio companies. However, with thousands of venture funds vying for the time, attention and affiliation of a handful of individual executives at P&G, it requires very intentional community engagement efforts to earn those relationships. When done right, the goal is that when those executives are at a cocktail party and the topic of venture capital firms come up they not only say “I know people at XYZ Ventures” but rather that they say “I am a proud part of the XYZ Ventures community.” That level of affiliation is what solidifies unique relationships, and results in direct portfolio-level success overtime.

For many VC firms, the key is to look at what characteristics are unique about the specific fund, and which communities are aligned with those characteristics to differentiate them in an increasingly saturated venture ecosystem. For example, if you look at a fund like Tusk Ventures, they have become one of the most sought after investors for any startup selling into governments or dealing with potentially complex regulatory areas. It is because of the unique community that Tusk has built with government leaders, regulators, and lobbyists that they are able to stand out in the value they can provide companies in these critical areas. Furthermore, since government leaders are not a sub-community that most funds have historically focused on, Tusk’s strength in developing this community makes them a very desirable co-investor and syndicate partner for other leading venture firms that acknowledge their unique community strength in this area.

Sometimes, these unique differentiators are structural in nature. For example, many corporate venture capital firms (CVC) such as Salesforce Ventures, Intel Capital or funds like In-Q-Tel (the venture investing affiliate of the CIA) use their relationships with their parent company or sponsor to build one-of-a-kind communities that can serve their portfolio companies. These funds are able to use these strong and unique relationships as a critical differentiator in how they can support portfolio companies on strategic topics.

It is vital for funds to be intentional about which communities they choose to develop, since building and engaging these communities takes a lot of effort to do effectively and funds are limited in the number of communities they realistically have the capacity to build. With a multitude of relevant sub-communities for any fund, it comes down to prioritizing these efforts based on each sub-community’s importance and uniqueness to the specific fund, in order to determine the most relevant communities for a firm to focus on.

In building these communities, the measure of success is ultimately based on the quality and strength of each community, not the size or quantity of communities. Therefore, a thoughtful and focused strategy around a small number of hyper-relevant sub-communities is typically the most effective way for firms to build meaningful communities.