How Can I get into VC?
We get that question all the time.
And we get it. Venture Capital seems like the perfect job: you support exceptionally talented teams disrupting the status quo through cutting edge technology, you get intense intellectual stimulation, you receive almost as much attention as a movie star and, well, you get really well paid.
Right?
Almost. Granted, lots of attention - but often it’s adverse selection, in that the founders you don’t want to hear from keep popping in your inbox, and those you really want to back may not be all that interested in chatting. Unless you focus on a very narrow niche you might sometimes be perceived by founders as a necessary evil, a sort of know-it-all that actually doesn’t know much about their product and industry but that happens to hold the purse strings.
Sounds fun?
Despite the drawbacks, our VC friends actually do seem to (mostly) have a lot of fun! And with a solid investment thesis, hard work and of course a bit of luck, you too can have a successful and fulfilling VC career.
Great, so how do I get into VC?
In this piece we’ll focus on experience, namely education, professional experience and side hustles. In a subsequent post we’ll address the interview and preparation process.
Let’s get started.
ASSOCIATE LEVEL
Education
Generally speaking, having a Business, Computer Science, or other analytical degree from a top university is usually the first step. No surprise here, but Stanford, Penn, Harvard, Berkeley or MIT on your resume hints that you’ve successfully passed through countless filters and that you have a network that may be of immense value in venture. Some argue that this focus on top schools hurts the quest for greater diversity in tech, and there’s most likely some truth to it. That said, from the VC’s angle it’s nothing personal; it’s just a numbers game. They’ll usually believe that a top school on your resume correlates with a higher likelihood that you’re 1) smart, 2) driven, 3) well rounded, and 4) able to tap into the right network. If you don’t have a top school on your resume, but that you’ve hustled your way into a top firm for your first job, you’ll usually be viewed very favorably. You majored in History or Social Sciences? No worries, VC might still be for you. But you may have to stick with Seed/Series A investing.
Work Experience
Structured and quant-heavy business or engineering training is a clear positive for many VCs — and often a condition to even be considered for a first interview. For early stage VCs, a software engineering or product management background will often give you a very solid foundation, because you’ll be positioned to better understand, earn the respect of, and relate with early stage founders. As a bonus, if you’re technically inclined you’ll be able to more actively participate in technical due diligence on potential deals.
For Growth Equity firms (usually defined as Series B through IPO), a very common path is the archetypal two years of tier 1 investment banking. You might be able to make it coming from a top 3 consulting firm, but remember that the later stage it is, the more important financial underwriting becomes important. Series B is the sweet spot where consultants usually have the best chance of success of landing a VC role.
Side Hustles
A Stanford degree combined with an Associate Product Manager role at a large tech firm or up-and-coming startup is a very solid foundation and probably enough to score a first interview at most VCs. But it’s far from sufficient. We can’t overemphasize how important it is to clearly showcase how passionate you are about disruptive technologies and venture capital, and to build a solid network of founders and investors. VCs are looking for signals, including (but not limited to):
Advising early stage startups
Angel investing (easier said than done, but carries tremendous weight)
Running a monthly tech meetup
Having built your own app, participating in a coding bootcamp or having taught yourself how to code
Having launched a startup (even if non-tech) on the side or during college
Learning as much as humanly possible about a specific disruptive trend or tech (e.g. how Machine Learning will impact the future of work in the manufacturing sector) and writing articles about it on tech-focused platforms. That can become the foundation of your future investor thesis.
Summer or part time VC internships
As a VC told us:
The best way to be a VC is to being one without having the job. Build a network of top notch founders you can refer to VCs you know. If they’re good, they will notice. If you don’t know VCs, meet some angel investors and help or learn from them, they’ll also notice. Build your own conviction on tech companies, learn your way into your opinions and make sure they’re unique opinions.
Great, but how can I find the time to do that while working 60 hours a week elsewhere?
Well, that’s exactly the point. VCs are looking for proof that you’re so obsessed with tech that you’ll find the time. If it’s truly your passion, it won’t count as work.
One important note: the majority of associate roles at VCs are 2-3 year programs.
SENIOR ASSOCIATE LEVEL
When the position exists, the senior associate level is typically post-MBA (or equivalent), and is sometimes a bit less sourcing-intensive than the associate level. Education and work experience requirements will usually be similar to that of an associate, with simply more experience needed.
Education
A few of our clients essentially demand a MBA for the senior associate level, but most don’t. Some later-stage firms will actually prefer candidates that have instead spent those two years in a buyside role instead of in business school. For Bay Area VCs, a MBA from Stanford will often be perceived as the safest bet (especially because of the strength of that network in the local tech ecosystem), followed by HBS, then by the other traditional top programs (Wharton, MIT, and Columbia especially).
Side Hustles
If you want to work in venture immediately after your MBA, interning at a VC - or at the minimum at a tech startup - during your MBA is strongly recommended. Being part of your school’s VC club is good to understand the industry, but it won’t give you much of an edge vs. your colleagues who launched startups and tried to raise capital during that time. Practical experience will always trump theoretical exposure. But programs such as Dorm Room Fund, Contrary, and Rough Draft Ventures, as well as scouting programs from top VCs, will most of the time be a good start to get your feet wet.
PRINCIPAL LEVEL
At most VCs, a Principal will need all the elements traditionally required for a senior associate job, plus one crucial addition: operating experience.
Work Experience
Unless you’ve been extremely successful in a senior associate role, most VCs will ask that you go get operating experience in order to come back at the Principal level. It can be joining as an early employee at a fast-growing startup or successfully launching, leading and exiting your own. It doesn’t need to be a billion-dollar exit. But at least a moderate level of success will be required. Many VCs have the mindset that you can’t successfully sit on the Board of a startup and advise their founders if you’ve never been in their shoes. That said, a growing chorus is pointing out to the lack of empirical evidence proving that VCs with operating backgrounds are more successful than “career VCs”.
Growth Equity firms, will usually not care about operating experience. The path to Principal level from Senior Associate or VP is more clearly defined, but some firms will require MBAs.
One Last Thing
VC jobs are far from standardized across the industry. While there are important commonalities, two investment roles at similar-sized VCs may be quite different. In the words of a partner at a top Silicon Valley VC:
VCs are hiring people to do three basic jobs: sourcing, diligence, and portfolio support. We are generally looking to primarily address one of these three areas when hiring. Understand which area the VC is primarily hiring for and highlight that skill set (…)
Having the right set of experience is critical, but it’s just the beginning.
In a future post, we’ll discuss how to get introduced to VCs and how to best prepare for the interview process.
In the meantime, if you feel like your background aligns especially well with the required experience described above, feel free to get in touch!
