Since we have over 30 companies in our Turkish portfolio, we get many requests from third party service providers who want our companies to become their customers. Examples of these service providers include digital marketing agencies, PR firms, payment service providers, and executive recruiting agencies. They reach out to us in order to offer their services to all of our companies at once rather than have to approach each company individually.
When we receive such a request, we first check to see if any of our companies has worked with the service provider. We look for at least one positive reference in order to recommend the service provider to our portfolio. We believe that this is a reasonable request given that we’ve invested in over 30 companies.
If the service provider has at least one positive reference, we include it in our shared “Third Party Services” spreadsheet together with the name of the recommending party. This spreadsheet shows our founders the service providers that come recommended by us and other portfolio companies by service category. This is a reactive way to reach our startups because it requires that our startup review the spreadsheet to find a service provider.
If the service provider would like to proactively reach our startups, we request that they make an offer that’s valid for each company in our portfolio. We use the strength of the over 30 companies to which this approach provides instant access to secure attractive commercial terms for our companies.
However, when a service provider makes such a proactive offer, we do not guarantee that our startups will begin to use its services. Although sometimes service providers request this, this isn’t a request that we can meet because we’re minority investors that don’t run the daily operations of our startups. The ultimate decision is up to the founders of each startup.
As a result, the extent to which a service provider’s offer converts into customers depends on the quality of the offer. We’ve seen great offers convert over half of our portfolio while less attractive offers have converted only a few companies. If we can’t agree with the service provider on terms that we believe are sufficiently attractive to convert at least a few companies, we save everyone time by not sharing the offer with our portfolio.
Also published on Medium.