In addition to providing equity capital, VC funds are created to provide expertise. This is a value add proposition that can help give entrepreneurs a competitive advantage in their field or a boost to their business plan. This expertise could be relevant to the size of the investment or investments made into companies, the capabilities that the VC team could bring to the investment company. It may be relevant to the particular sector that a new company operates in or a product focus, such as an IT focus or experience with a certain client base, or functional expertise relevant to the operations of the business, such as experience in setting up distribution within a company.

This expertise could be in particular industry sectors or in a functional area related to building and scaling a certain type of product or service.

This value add is articulated in the VC fund's investment thesis that is developed by the managing partners of the VC fund and communicated to potential investors when they are raising capital for the fund, to entrepreneurs to market and pitch their investor qualifications and to other VC funds to distinguish their brand and align themselves in the tech ecosystem.

Often a fund will start with a specialist interest depending on the experience and skills of its team. This may attract investment from others who also share the same interest, although simply looking to gain exposure to a certain sector, either for growth or the diversity of other holdings it may have. AVC will want to make sure it can use its value add expertise to maximize any investments made and the returns it can generate for investors.