Venture captial backing may be an essential factor in making entrepreneurial ideas reality, but VC firms that think of themselves primarily as financier "owners" buying startups as if their portfolio companies work for them are unlikely to build a track record of good returns.

The fact is, VC investment is not about the VC - it's about the entrepreneur. Those VCs who think and act as service providers to their entrepreneurs and management teams are more likely to achieve long-term and ongoing success across their portfolios.

Service-oriented approaches emphasize collaboration over individual partner interests, and patience over keeping score on short-term company performance while disregarding the negative impact that can develop in the long term.

With service-oriented VC firms, all the partners work together as a collaborative team, leveraging their combined experience, expertise and network of resources to benefit portfolio companies. They engage in service-focused activities that support company performance and are appreciated by management and board members alike.

When VCs act as service providers, they are better able to fulfill their most important roleÑthat of constructive partners dedicated to helping their portfolio companies succeed. In contrast, VCs who think of themselves mainly as financiers and owners may only get actively involved in portfolio companies during financing activities, give short-term results precedence over long-term strategy and direction, and treat management team members like subordinates.

Such actions make it difficult - if not impossible - to establish collaborative, team-based relationships with portfolio companies. Service provider approaches, on the other hand, enable VCs to enhance valuable, long-term relationships with management teams and co-investors. This puts them in a position to be truly effective.

Service-oriented approaches start at the due diligence stage, with a focus on the objectives of establishing collaborative partnerships with portfolio companies and achieving the mutual win. A good first step is aligning the interests of all the parties involved - starting with the term sheet. Getting everyone on the same team is not always easy, but it helps when VCs take the lead on this from the beginning of their involvement in the investment. By focusing on collaboration and common goals rather than individual interests, VCs can become very influential in the kinds of critical business decisions that all companies must make in order to succeed.

As team players, VCs will be able to provide the supportive services that will help them to build productive relationships with management and board members alike. These services can cover a very broad and varied range of activities. For example, VCs might help portfolio company CEOs identify, recruit, hire and retain their executive management teams and outside board members. Service provider VCs might also introduce CEOs (and other management team members) to their peers at other portfolio companies where the sharing of past experiences often can lead to better future outcomes.

VCs can open doors to valuable professional entities as well, including commercial bankers, lawyers, accountants and PR firms, among others. They can also introduce portfolio companies to a wide range of investment bankers who can lead them through an efficient and productive process for selecting the banker that can best help them in selling the company or taking it public when the time comes.

Another valuable service is facilitating partnership discussions between portfolio companies (or between portfolio and nonportfolio companies) for early product development or co-marketing and sales relationships. VCs also can act as sounding boards for CEOs as they think through some of the issues confronting the business, line up new equity investors for future rounds of financing, and help management think through and accept the reasonable terms and conditions of the financing. In addition, they can lead co-investor discussions and help management gain consensus within their investor base for important company decisions.

The list of service-oriented activities goes on. VCs also can push for discussions to take place on both the tactical and strategic benefits and issues of the current business model or of alternative business models. They also can help the company build credibility within both the VC network and the business community at large. They can provide access to VC facilities and resources that portfolio companies can use for sensitive/top secret off-site meetings, and, very importantly, can introduce the company to potential early customers.

On a lighter, but no less important, note, VCs can provide CEOs with invaluable perks, such as Red Sox tickets, that can be used to reward key employees for a job well done. The common denominator in all of these types of activities is that they place the focus on service to the portfolio company.

At the other end of the spectrum, VCs who push the agendas of their own firms to excess can create an atmosphere of distrust, and in some cases even animosity, in the boardroom. Given the fact that individual VCs generally are minority, rather than controlling, owners of portfolio companies, the more productive course of action is working to gain the trust and respect of the management team.

Because service provider approaches by nature are patient and steady, they require greater commitments of time. This time spent allows VC firms to bring their portfolio companies all the benefits of their combined industry and investment experience and expertise gained from guiding numerous companies through the process. This includes valuable perspectives on what works and what doesn't and how to recognize opportunities and avoid mistakes and missteps, as well as access to valuable networks of service providers and potential employees and customers. VCs willing to put in the time to work with their portfolio companies can become integral members of the teamÑand the relationships established on this basis with management teams and co-investors will be beneficial to all the parties. While it is very important for VCs to play a close and hands-on role, they must remember that, ultimately, the responsibility for running the business and making it successful lies with the portfolio company management team.

Geographic proximity is a key factor in the service provider approach as well, in that it makes it easier for VCs to understand the company fully, build relationships, and function as supportive members of the team. When VCs are located close by, spontaneous meetings can and do happen. Discussions about difficult issues can take place face to face in a few hours rather than a day or two later, and VCs can get all of their partners together to meet and work on portfolio company issues. In effect, geographic proximity enables portfolio companies to get the benefit of all the partners in a venture capital firm, not just the proponent partner. Most importantly, VCs can spend more time working with portfolio companies and building relationships with management team members (particularly CEOs), leading to better business decisions and increasing the chances for eventual company success.

Clearly, the price of building successful companies goes beyond cash. Success requires VCs to think in terms of servicing portfolio companies and making substantial commitments of time to provide the benefits of their experience, counsel, domain expertise and contact networks. With service-oriented approaches, VCs not only will achieve excellent investment returns, but also will enhance the reputation of their venture partnerships, thus improving their access to quality dealflow and ensuring the long-term viability of their firms.

Steve McCormack is the founder of, and general partner at, Commonwealth Capital Ventures, a Waltham, Mass.-based investment company.