[5 min reading time]
Here’s the final part of this series of blog posts on how to get into Venture Capital where I’ll try and share a couple of tips. If you haven’t read them yet, please read part 1 and part 2 on how VC funds work, the day-to-day, career progression and VC vs. Startups.
Tips and things to think about
So if, after all that, you still want to make the move into VC now, here are a few tips that might help:
Size and Type of Fund – take a look at the makeup of juniors on the team, which should give you an indication of the types of people they want and the culture. As I mentioned, larger funds have more capital and are more likely to hire. Early Stage = more operational types (digital marketers, developers); Later Stage = more strategy and finance types – there ARE exceptions.
Timing – check to see if they’re raising a new fund and the fund size. A second (hopefully larger fund) = more work & more fees = more likely to hire so check the press and tap your network to see who is fund-raising and when. This leads on to the following point:
Pitch yourself like a startup – what I mean by this is to try and start relationships with VCs early. At Episode1 we follow Mark Suster’s lead in terms of investing in “lines and not dots”. If you build relationships with VCs, put yourself on their radar and explain that you’re looking for the opportunity, they’ll get to know you and you’re essentially derisking yourself as an investment of their money and (more importantly) time. Hopefully they will consider you for a role when the business need arises.
Networking and Recruiters– yes, clearly you can go the recruiter route and there are some funds that will work with one or two recruiters on an exclusive basis whenever a hiring need arises but really going direct or networking is probably the best way to get into VC (especially if you’re not coming from investment banking or one of the major strategy consulting houses). A lot of the job market is “hidden” i.e. people are recruiting but not advertised (I’ve heard estimates of 80% in the job market generally) and VC is a people business. Building relationships with VCs will help you;
Show real interest – showing real interest and having a view or specialism with the tech scene obviously helps. For example, try to get more involved in the community (i.e. blog about tech, go to events etc. etc.) and/or pick an area of tech (e.g. cryptocurrency) and learn as much as you can. Developing a specialism enables you to take a view on the area and develop an investment thesis; and it could also attract a VC to hire you as a subject matter expert (especially to patch a hole in their team makeup / complement the team). It also helps to facilitate conversations you will have with VCs in relation to their portfolio;
Expand your knowledge – read books and blogs on VC – (there are just too many for me to provide a definitive list here BUT) The Lean Startup is still probably the most cited book in tech circles currently so read it (or at least understand what the key takeaways are). I would also recommend “The Hard Thing about Hard Things” and “Venture Deals” that cover a lot of interesting points, and Mark Suster’s and Brad Feld’s blogs as a start;
Know your enemy – try to get a sense of investment style and VC focus (for example, if Fund X is focused on marketplaces, and you’re interested in the space, don’t just say that you like marketplaces but try to show that you’re interested in the psychology of network effects and building supply and demand drivers (or something like that));
Internships – if you’ve got capacity (e.g. an MBA in his/her second year or are in between jobs working out what to do next), consider an internship. It’s a foot in the door, a way for the firm to try you out and can lead to a full time position if you prove yourself and there’s a business need. It’s also a great way of learning if it’s really what you want to do;
Accelerators and Incubators – working (even part-time) and/or mentoring at an incubator or accelerator like Techstars (I’m a Techstars Fanboy so forgive the plug!) will help show real interest (see above), which will help build experience, your network (you’ll meet VCs) and you’ll get to see some amazing companies;
Corporate Venture and Incoming Foreign VCs – these are other possible entry points or alternative career paths to VC. Given that London has a booming tech scene, a lot of US funds are opening London offices and growing headcount so it’s possible to be an early employee. Additionally, given that it’s easier to buy innovation than grow it within, a lot of banks and corporates are now creating venture arms (or are a lot more active). You’ll obviously get the investing skillset, albeit with a narrower sector focus, a solid salary (no carry though!) and it represents an alternative entry point into VC as well as a career path in its own right.
Luck – Like a lot of roles that are high in demand, it comes down to having the right skills and being in the right place and at the right time BUT there are things you can do to tip the scales in your favour as I’ve stated above.
Chin up! – Lastly, don’t be too disheartened if you can’t find the role you want – it may just be a timing issue (you may find your way into VC at a later stage) and you may find it’s even a blessing in disguise.
When you get in
Be nice – this should go without saying (and applies whatever you end up doing) but every industry has bad apples and I’m sure you’ve met, worked with or under someone really horrible (e.g. arrogant, rude, perpetually angry) in your time. Don’t be that guy.
You may think venture capital is only about pitch decks or spreadsheets or board meetings but it’s really a “people” business and (a great lesson I learned from a wise man) “you’ll always prefer to work with people you like”. You can’t “fake” being nice – people will suss you out over the long term but it generally pays to try and be open-minded and friendly to everyone. At the very least you’ll be happier and live longer.
Goethe once said “You can easily judge the character of a man by how he treats those who can do nothing for him”. Really – those are words to live by.
Show humility, respect and honesty – If you do manage to get a VC position, don’t forget it’s the founders and the teams who are doing the work. You get to take home a paycheck at the end of every month; they have to work out whether they will be able to pay their employees, let alone themselves at the end of every month. They will have invested blood, sweat and tears just to get to your door, so have the decency to recognize that, be respectful and if you’re going to say no, mean no and give them constructive feedback.
Some VCs will string entrepreneurs along to maintain optionality in case things begin to take off. Have the courage of your convictions and mean what you say. People will respect you for it in the long run.
It’s ok to change your mind later on if circumstances change. It’s NOT ok to keep waving a carrot in front of a founder when he’s running on fumes.
Also, every heard the saying that you’ll tell one person if you love something and ten if you hate it? Act arrogantly, unreasonably or disingenuously and watch your deal flow dry up. It’s a surprisingly small world, word gets around and a VC lives and dies by his reputation. You’ve been warned.
So why am I doing it? Personally, I love finance, strategy and how tech is changing the world at a crazy pace. Venture capital is at the crossroads of all three. I get to work with very smart people on BOTH sides of the table and brainstorm interesting ideas with entrepreneurs and peers. I get a helicopter view of the industry and from there you get to see trends, difficulties, opportunities – which you wouldn’t be able to if you were working in one specific startup. I also have the opportunity to constantly learn new things and I like the variety that you get from looking at different companies in different sectors.
So that’s it. As I said at the beginning, have a think about if this is what you truly want to do and why. There are many paths you can take and Venture Capital can be a step or a destination.
I hope all of this has been of help and best of luck whatever you decide to do.