How to get a job and build a track record in VC

Part 1: Getting a job in VC

I get about a message a week from people scrambling to find their own route into VC. I always like hearing from these people, and usually have a chat with them. So far, I’ve got on well with all of these ‘cold-messagers’ and I’m sure I’ll stay in touch with many of them.

Below are a few of the most effective things those people are doing, and thus what I pass on as advice to others:

  1. Start investing. Stocks and shares or preferably crowdfunding. Show you’re interested in startups and investing. After all that’s exactly what venture capital is. Don’t worry about £500 investments into loads of companies, just put nominal sums into companies that you’ve thought carefully about and like. You don’t need to get rich from this, just build a track record and develop your thought processes.
  2. You’re doing the right thing by opening conversations early. I’ve come across a few people now who’ve got jobs by simply building good relations within the industry and proving themselves as capable individuals – probably through intelligent, thought-provoking conversations with those connections.
  3. Try to add value to the people you’re talking to: have you got a useful intro to make? Have you seen a tool that would make my life easier? Something that you think we should be doing as a fund? I think checking in every few months with a little nugget of value can help you stay at the front of a VC’s mind. I was recently sent an investment thesis on FinTech in London by someone who wanted an internship – it was very impressive and showed real enthusiasm for VC. Another idea: put your CV into the form of a pitch deck. That would be cool. Pitch yourself to us as an entrepreneur would.
  4. Join the mailing lists of the funds you want to join.
  5. Pass on awesome startups but only if you really think they’re great, and make sure they’re in scope for the fund. Personally, I’d do the other things before doing this as bad deals can just be inbox clutter.

The reason for doing these things is that many funds don’t advertise jobs, they hire from their networks. Somehow you’ve got to get yourself on the list of people to be considered – that’s why staying front of mind is so important.

Part 2: Once you’re into VC, especially as a young person, how do you prove yourself if you haven’t already had an esteemed career or exited a business?

One of the things that’s difficult about venture capital is that building a track record early in one’s career is very hard. If you’re a partner, you’ve likely had a successful career which has allowed you to build an angel portfolio, giving hard evidence of your ability as an investor. Take Simon at Episode 1. He built a business which Amazon bought and turned into Amazon.co.uk, after which he became head of Amazon Europe. This put him in a position to later become one of the UK’s most prolific and successful angel investors.

However, we’re not all in that position, especially as a young person. Most young VCs have a chicken and egg problem where to build a track record they need lots of money but to get lots of money they need a good track record. 

In my view the best step to take is the one outlined above – build a portfolio on a crowdfunding site. Since 2016 I’ve been building a small portfolio on Crowdcube which at last check was sitting at 2.4x the amount invested (only paper returns so far). This is based on the valuations at which I invested, versus the valuations at subsequent rounds, and then each holding adjusted for portfolio weighting.

This is great but I admit that since I started at Episode 1, I haven’t made any investments into new companies – trawling through Crowdcube is not a priority for my time. So, the moral of the story is to build a portfolio while you have time to spare.

I’ll now move onto what I think is a smart idea for anyone who doesn’t want to invest at all, or even to do alongside investing on crowdfunding sites.

I’m constantly looking at adverts on the tube (in London), or reading articles about startups which have me thinking, ‘is this company still going to be alive in 2/5/10 years time?’. 

So I’ve started writing down which of these companies I think will fail, survive, or thrive. For anyone really serious about this, find some document tracking software that’ll timestamp each change to your document, proving when you predicted the outcomes for these businesses – it’ll be more convincing to show your interviewer this proof document than to expect them to believe that the only companies you ever believed in were Uber, Deliveroo, Improbable, Monzo and UiPath (lies…). Personally, I just do this on iPhone notes because I love verifying my own predictions (not just investment predictions).

I think this is a seriously good way to build a track record without the need for any financial commitment and it also shows indisputable interest/passion for the industry.

All that being said, you now have to ride out the horribly long VC feedback loop to find out whether your prophecies were correct, but the results will indicate whether you’re a superstar investor or whether you’re better off sticking to that 2.5% cash ISA. Either way, you’ll hone your thought processes and show real commitment to VC investing – both things your future employer will want to see.

Hector Mason
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