There is no doubt about it, getting a job in Venture Capital is an uphill battle. For every job opening in VC there are hundreds of applicants and the competition is fierce. In short, VC firms are looking for an applicant with a network, startup experience and, despite what some say about MBAs, a good education. I’m often asked for advice on how to get into the industry so here are a few tips on navigating the unmarked road to a job in the venture business.
Tip 1: Know where you want to work. Job seekers often bucket early stage VC and Leverage Buy Out firms together, labeling them as Private Equity. Technically this is correct, but you need to understand that these two investment stages have a completely different strategy and require an entirely different skill set. In an LBO the investment firm will take controlling ownership of the company, while an Early Stage VC takes an equity interest in a portfolio company and views the relationship going forward as a partnership. An Early Stage VC’s daily job functions involve networking, sourcing new deals, listening to pitches, researching market trends, doing diligence on potential investments and helping their portfolio companies grow. A partner at an LBO will focus on financials, debt restructuring and creating operating efficiencies (note that I’m not in the day to day of this industry). An LBO candidate has investment banking experience and a VC candidate has entrepreneurial experience.
Tip 2: Get your story straight. I get it, the job market is tight, so why not interview for both LBO or VC and see what hits? This approach seldom works, I know because I tried. When I first graduated from business school, I ran around trying to sell my financial modeling skills to LBO firms, despite the fact that my passion is in early stage VC. It wasn’t until I became committed to startups that I began to gain traction, my passion for entrepreneurship was contagious and my story came naturally. I no longer had to fake my “excitement for making financial models in excel.”
Tip 3: Get some relevant experience. Go to entrepreneurial events, meet the players in the ecosystem, learn VC from books, events and blogs, volunteer your services to a start up. During my MBA I participated in our school’s business plan competition and the VCIC competition, I re-started the Deming Center Venture Fund, and I volunteered my services to Zetta Sun, a local startup. I did this while networking my ass off, I went to every event I could. I made my best effort to earn goodwill from people in the community, hoping my name would come to mind if a good job opportunity arose. After graduation, I crunched numbers for a local VC firm that needed some help and worked, unpaid, for a startup on the side. If you want to be an early stage VC you need to build a network and have an intimate understanding of entrepreneurship. Unfortunately, no one is going to hand you a job in VC for relevant coursework.
Tip 4: Do your diligence before you ask someone for help, and if they do agree to meet with you be flexible, responsive, and show your appreciation. If you’re trying to get a gig at a hedge fund don’t ask a VC to meet for coffee. It doesn’t hurt to send a networking email indicating your desire to work for a hedge fund, but asking for a face to face meeting is out of scope. If someone in your target industry is willing to help by meeting with you, be flexible with the meeting time and location. There is nothing worse than trying to help someone and having it take six emails to schedule a meeting. Lastly, if the person who you asked for help is kind enough to go back to their computer and type out an intro or some written advice, be incredibly responsive. Any introduction should be followed up immediately with the introducer bcc’d. Post-introduction radio silence is a serious insult and burning bridges isn’t a good way to get into VC.
Tip 5: Have an opinion on the future of tech, but don’t trash a VC firm’s portfolio companies. You can elaborate on why the hypernet + hyperweb is the next big wave, or why peer to peer marketplaces are going to be huge. This shows that you are reading and thinking about the right things. But don’t ever trash another VC’s investment decision. Criticism from the upper deck or playing Monday morning quarterback isn’t appreciated. Remember that the industry is incredibly small and the other VC you are trashing is probably a friend.
By no means is this list meant to be a comprehensive guide to a gig in VC, rather it’s a few helpful hints to set yourself apart. Landing a job in VC requires luck, perseverance, and passion. Since there are no guarantees, you should find a job that you love doing today. The best advice I can give is to let your passion guide you.
