How To Become A Venture Capitalist - Advice from 50 VCs who tried
Earnest Sweat, Investment Manager @ PLD Ventures
...For my own VC job search, I hadn’t taken the necessary time to think about what I was looking for in a VC role (stage, vertical), which would have given people something tangible to comment on or help me achieve. I just came to the conversation with the position of I want to be in VC!
Those early informational and job interviews were helpful — not in employment, but in something much more important (at least that is what I tell myself now) constructive feedback. The consensus was that I was not ready for a role in venture capital.
They are looking for an individual who has some experience or expertise that can fill a gap in the current team (e.g., the firm is interested in investing in blockchain and therefore searching for a candidate that has worked in the blockchain industry).
They are looking for individuals that have a strong network of other investors and talented founders as well as some type of superpower, which could be an operational expertise or industry expertise. This is when I realized my previous experience wasn’t antique trash, but was valuable and I could leverage it in the next chapter of my career.
...in my experience, VC firms are not going to cut another slice in their “overhead pie” for someone who needs to be trained.
...why was this period of 15 months working at the bank so critical in my job search? ...I was also able to invest in a career coach. ...I worked with my career coach for about six months and she really helped me learn how to frame my career aspirations, acknowledge how my previous skill building could contribute to those aspirations, and identify the skills and roles that could bridge the gaps between the two.
...Blogging also opened doors that I would never have dreamed of, such as the city of Amsterdam recognizing me as a global tech blogger and flying me, all expenses paid, to cover their tech ecosystem. (Source)
Sarah A. Downey, Principal at Accomplice
So how do you get a job in VC? It just kind of…happens. You don’t pick venture; venture picks you. But you can increase the odds.
Know that most of the best never wanted this job. I think it’s a red flag any time someone asks me how to get this job. It’s not by asking, but by doing things peripheral to venture and building a name for yourself that you end up in VC. (Source)
Semil Shah, Founder of Haystack andVenture Partner at Lightspeed Venture Partners
My belief is that in the VC game, having “context” means possessing the following: You have a network; you hold a point of view on a few topics that matter to you; that other people seek you out for help and advice; you have some understanding as to how the ecosystem’s participants — the founders, the early employees, the “joiners,” the operators, the angels, the investors, and the press — interact in the game. I believe if you show up in VC without these points of context, you won’t be as effective or be able to compete.
If you have the right level of context, folks in venture will notice and you will be hired. The right level of context in my opinion, as a baseline, is to articulate and defend various points of view, to have been well-read on the industry and be able to make non-obvious connections between disparate bits of information, and to have shown evidence of staking out a position and sticking with it. However you seek to obtain your context — and there are no rules around that pursuit — I would advise to have some in your back pocket before playing this part of the game. (Source)
Tiffany Zhong, formerly for Binary Capital
Hate to break it to you, but the default mode is FAILURE. Both as a VC and as a founder. (Source)
Charles Hudson, Managing Partner at Precursor VC
If your goal is to get into venture, I would encourage you to come up with a five- or ten-year plan for becoming a venture capitalist because it could very well take that long. Plan to become an expert in something, like an area of technology or a certain function in the company. (Source)
Dimitra Taslim, ex-investor and currently Consultant for Monk's Hill Ventures
A VC is constantly selling. This is something I wish I understood earlier. I’ve come to realize that there is a lot more to being a stellar VC than just investing. And there are more contexts (and subtexts) that the public would never imagine.
We’re always selling ourselves to founders. We’re selling our portfolio companies to partners, customers, potential hires and to later-stage VCs and PE firms. We’re also selling our fund as an investment opportunity to Limited Partners, such as pension funds, sovereign wealth funds, family offices, foundations, university endowment funds, high net worth individuals… the list goes on. Selling is not always fun. (Source)
Stephen Hays, Founder and Managing Partner at Deep Space Ventures
You can learn a lot about how to be a good investor/partner/board member from founders. Founders have been the best resource for me in the last year. There is a therapeutic conversation that happens when founders and investors get together to share what they expect from each other in a relationship. Founders can teach you what they are looking for in a partner, and when you get into a competitive investing situation, that becomes very important. (Source)
Teddy Citrin, Investor at Greycroft
Many VCs hire people from similar backgrounds because it’s easier to narrow the funnel and because they believe it’s a proven formula for success. However, after observing the industry with fresh eyes I have come to believe that work-background and performance has little to no correlation in early-stage investing. There are key traits that separate the best VCs from the rest, but none require a specific background as a prerequisite. For an industry whose greatest successes have come from founders with diverse backgrounds and a crucial lack of prior industry experience (AirBnB, Uber, Facebook, Amazon, Tesla, SpaceX, PayPal, Stripe, and many more…) investors should equally be on the lookout for top-notch talent from unconventional backgrounds. (Source)
John Vrionis, Founder and Managing Partner at Unusual Ventures
See your life in a big-picture way. Have a game plan … Build skills, not a resume … Consider early career choices as a series of 2-4 year projects. (Source)
Rich Levandov, Partner at Avalon Ventures
Success is driven by three things: people, product, and money, and any two will get you the rest. (Source)
Ping Li, Partner at Accel Partners
Mentors, mentors, mentors. Seeking out mentors at every stage of your life, at every stage of your career, is such an important thing to do. I can now look back and point to mentors who gave me advice at very specific times in my career that really changed the direction of my career. (Source)
Jonathan Libov, former for Union Square Ventures
Mingling with other investors is a good thing — it's important, to some degree, to keep tabs on the network of investors and investments — but you must challenge yourself to isolate the investors with whom you want to keep up with. If you don't do that, if you fill up your calendar networking with everyone and anyone, you're at best costing yourself time to research and understand a market, and at worst filling your mind with ideas and trends that don't help you arbitrage on unseen, unrealized value in the world. Finding the right balance is not an easy thing to do. I often found myself praising the wisdom of other investors who agreed with my ideas while questioning the foresight of those who didn't, which is not altogether different from re-affirming the politics of those who are already in your Facebook and Twitter feeds. To break the cycle, look for historical analogies and patterns to help validate or invalidate your ideas. (Source)
Hunter Walk, Partner at Homebrew
If you’re looking to get into VC... just make sure you are clear on what type of investment manager you want to be and your venture vehicle (fund, stage, strategy) is consistent with this approach. If it’s not, you’re eventually going to create problems for your founders, your investors, your partners and yourself. (Source)
Alex Obadia, former Intern at OpenOcean
Have a “hit the ground running” mindset when writing your application and during interviews. You want to make it very clear how you plan on adding value. To give you an idea, out of a 3-month internship, the typical split is going to be 1 month learning, 2 months adding value. (Source)
Crystal Huang, Principal at GGV Capital
Don’t work for free. Do add value, knowledge, and expertise. [By offering to work for free,] you’re sending the negative signal that you don’t particularly value your own expertise, experience or network … Junior VCs must find ways to create value, not just take direction … Demonstrate market knowledge with research decks around specific focus areas … Start sourcing today … Benefit their portfolio today … Build the skills you’re lacking today. (Source)
Jeremy Liew, Partner at Lightspeed Venture Partners
[...I entered the venture industry without ever having founded a startup... Prior to joining Lightspeed in 2006, I was a corporate strategy executive at Internet giants like IAC (then USA Networks), AOL, and Netscape, ...and then a consultant with McKinsey in Sydney and Johannesburg.
I think I would actually be a better investor if I’d spent all of my time as an investor,” Liew says. “The more you do anything, the better you get at it. If you were gonna be a surgeon, it doesn’t make sense to spend five years becoming a lawyer first. You’d be better off spending 10 years becoming a doctor. (Source)
Baiyin Zhou, Senior Associate at Ascent Venture Partners
Among the hundreds or thousands of applicants for any given job, there will always be candidates with more relevant experience, more education, or closer connections with decision makers. Those are aspects you can't control. What you can control, however, is how you tell your story. Become a marketer of your product. What are your customers’ needs and how does your product address those needs in a way that others don't? Candidates don't realize that interview questions such as "tell me about yourself" or "walk me through your resume" are often the most important and advantageous questions asked. It's an opportunity to tell your story and steer the conversation in whatever direction you choose. These questions are not an invitation to list every role and responsibility you've ever had but rather convey your knowledge and differentiator. (Source)
Rob Moffat, Partner at Balderton Capital
The second piece of advice is to make sure that this is something you want to do. The day to day work of VC involves making decisions quickly with minimal information, working alone for the majority of the time, saying no frequently, and fighting hard internally for any deal you want to get done. You need a lot of self-confidence and self-motivation, and be willing to self-promote. You know that the credit for success of your portfolio companies lies solely with the founders and team. You need to be comfortable being an advisor only, not a decision-maker. (Source)
Ali Afridi, former analyst at Lightbank
Student-run VC firms have recently started to gain momentum as some venture firms as well as independent student groups create funds where student partners have the ability to invest in local companies.
These programs are a great way to get venture investing exposure, with the ability to write actual checks. Although most of these were started only a few years ago, many alumni from these programs have gone into VC after graduating. You could potentially try to start one of these if there isn’t one in your region already, but there are many issues with trying to invest other’s money as a student. There are creative workarounds however to get the capital. At the University of Illinois, we started a micro-fund investing in student founders using leftover sponsorship money we accumulated from other startup events. (Source)
Omar Hmaissy, former Vice President at LunaCapVentures
While there isn’t a scientific methodology to identify potential, there are several tactics that are indicative of entrepreneurial potential. Detailed conversations about target markets, customer acquisition, and scaling are considered to be one signal. Another signal is spending a day or two in the company’s offices, understanding how the entrepreneur is spending his/her time, and observing team dynamics. Spotting potential is not accomplished through a formal process; rather, it is the culmination of all interactions with the management team — from introduction, all the way to diligence and negotiation. VCs want to invest in entrepreneurs who know the ins-and-outs of their industry and are able to present a realistic yet ambitious plan for their business. (Source)
Adam Ludwin, former Venture Partner at RRE Ventures
Become fluent. This is an absolute must. Just as you can't work in a foreign country without speaking the local business language, you cannot land a job in VC unless it's clear from the outset that you are current on what is happening in the marketplace. (Source)
Ali Ahmed, Partner at Coventure
Getting a job in venture capital is not about “who you know.” It’s about “who you’ve helped.” The best way to get a job in venture capital is to spend a few years helping people who work in tech, with no agenda other then to build up goodwill. If you do a really good job and help people in a meaningful way, at some point within those few years you will likely get recruited into venture capital, asked to apply for a job, or receive an unsolicited referral. (Source)
Andrew Parker, General Partner at Spark Capital
The negative side of VC: I don’t MAKE anything. Jerry Colonna said it best: Entrepreneurs are pie bakers and VCs are pie slicers. I miss baking sometimes. I spent my morning today with my nose in API docs, so I get to scratch that itch once in awhile. (Source)
Matt Turck, Managing Director at FirstMark
If you’re at a more senior level (principal or partner), it’s even trickier because there’s generally no public application process (although some firms have tried that approach) – you typically get recruited or co-opted. So a lot has to do with having an appropriate professional background, positioning yourself adequately… and then “hanging around the hoop”, hoping someone will pass you the ball. (Source)
MG Siegler, General Partner at GV (formerly ex-blogger for TechCrunch turned into VC at CrunchFund)
[...Being a tech blogger trained me to become] very good at filtering. At TechCrunch, we would see hundreds of pitches a day — we could not do them all. We had to choose the best. Everyone has their own ways of doing that, but generally I would use my network to both vouch for certain entrepreneurs or just see what startups my friends were talking about.
In terms of what I may have to “relearn”, I guess I’d say the difference between a “hot” company and a “good” company. That is to say, the difference between a company that will make for a good story, versus one that will make for a good business. I’m not too worried about that distinction, but it is something I’ve thought about. (Source)
Gaurav Jain, Principal at Founder Collective
Get Involved In The Entrepreneurial Community — Early. Start a company. Join a high-growth startup. Get a writing gig for a major tech publication. Create a meetup group for an emerging tech/business sector. Basically, you want to become a connector with great relationships at all levels of the startup community. Do this while you’re still in college if you can. (Source)
Elizabeth Galbut, Co-founder of SoGal
Successful investors train themselves to understand and value deviations from the norm. (Source)
Venke Ganesan, Partner at Menlo Ventures
Break your own rules. "Some of the most successful venture investments come about when investors break their own rules." Venky’s words are just as relevant to pursuing a venture career as they are to investing. You need to be prepared to take a pay cut ("I could have made more at a bank..."), a boring job that might one day be relevant (like sales...), or responsibilities that aren’t interesting or sexy. Get comfortable with breaking your own rules. (Source)
Don Valentine, Founder of Sequoia Capital
[Venture capital] is all about figuring out which questions are the right questions to ask, and since we don’t have a clue what the right answer is, we’re very interested in the process by which the entrepreneur get to the conclusion that he offers. Our business is a business of highly intuitive decision making and that fact that it’s done in a scientific area doesn’t make it scientifically practical to make decisions that way…
We recognize by Socratic questioning opportunities that are better than others and why.
The art of storytelling is incredibly important. Learning to tell a story is critically important because that’s how the money works. The money flows as a function of the story. (Source)
Mark Peter Davis, Managing Partner at Interplay
[Looking for a VC job] Stay top of mind, but don’t be annoying. (Source)
Aditya Singh, Co-Founder and Managing Director at Neotribe Ventures
Focus and specialize. “The generalist model in VC is dead. Identify a focus area and develop deep, domain expertise”. In a market where money is cheap and competition among private investors is fierce, domain expertise is critical to securing proprietary deal flow. A unicorn in the portfolio and a stellar investment brand won’t hurt, but the top (Silicon Valley) entrepreneurs today demand deep and focused experience that a generalist just doesn’t have.
A VC’s role is to act as a coach, cheering on from the sidelines, not a player – this can be a downside for some particularly entrepreneurial investors. Certain funds prefer investment professionals to develop a generalist industry skill set which can mean that it is more difficult to develop depth and operating experience within particular industries. Similarly, the skills developed within VC are not always concrete or immediately transferrable to a wide range of other industries. (Source)
Jordan Kong, formerly for Institutional Venture Partners
It’s a crapshoot. Some firms liked me enough to have me participate in multiple rounds of interviews, while other firms ignored my resume drop and cover letter. Each VC firm may be looking for something different – either in terms of experience, education, or cultural fit. Don’t take it personally and keep your chin up. (Source)
John Greathouse, Partner at Rincon Venture Partners
Become an angel. Before I became a VC, I invested my own money... This process helped me determine to what extent I enjoyed the transition from operator to investor. It also demonstrated my ability to identify and evaluate viable opportunities and add value to startups beyond giving them cash. (Source)
Doug Dooley, formerly for Venrock
I believe the best way to seek our own versions of success has to start with an introspective search for what strengths we possess inside, what brings us joy and fulfillment, and what forms of reward motivate us to do our best work. Try to strip away the expectations of society, friends, and family, because the collection of our choices and actions define us as individuals. It’s important to think across stretches of time and to dig deep inside to discover what makes us tick and hopefully content.
This approach might not lead you to a role in venture capital investing. In fact, it might lead to a role that’s the opposite of what VCs represent. Yet the rewards of finding work that maximizes our strengths and engages our passions sounds far better to me. (Source)
David Sze, General Partner at Greylock Partners
Think for yourself. The best opportunities are often ones where you’re being contrarian. That doesn’t mean being contrarian for contrarian’s sake, but it means you’re thoughtful about the risks of following the crowd. (Source)
Sam Gerstenzang, formerly for Andreessen Horowitz
Managing a portfolio as a collection of risk-reward ratios leads to superior returns. Make sure to have a mixture of low reward, low risk and high reward, high risk projects at work and in life. (Source)
Christina Cacioppo, formerly for USV
I thought very seriously -- torturously, even (hi, friends!) -- about staying at USV, and I'm extraordinarily grateful to Albert, Brad, and Fred for taking a chance on me.
Why did I want to do something different? In part, because I wanted something that felt more tangible. (Source)
Brian Watson, formerly for Union Square Ventures
Your job is to provide a different perspective to the firm, not only to source investments. Find a space that you love and develop an opinion on it.
Being a successful VC is as simple as having the conviction to believe in something when everyone else doesn’t. You have to be right when everyone is wrong.
VC is becoming a service business, and the best marketers are seeing the best deals. (Source)
Jo Tango, Founder at Kepha Partners
The more you want something, the less likely you are to get it. People laugh when I tell them how I turned down a VC job when it was originally proposed. But, back then, I didn’t understand what VCs did. I had images of suits, accountants and spreadsheets. I was wrong. But, I have observed that the job seeking game is a bit like dating. The more desperate you are, the less likely you’ll get a date to the prom.
You must network like crazy. As mentioned above, finding a job was a full-time job. I had calls or met with 100 people in a month. (Source)
Elad Gil, investor
The basis for this confusion is that the venture industry is a bundled product. Right now VCs provide a bundle of capital (investment), advice (helping the startup), and governance (taking a board seat). The best investors return-wise aren't necessarily the best advisors (although a subset are), and some of the best VCs return-wise act badly from a governance perspective. People tend to confuse a VC picking a great startup, with the VC being somehow responsible for the company's success. A number of startups I know have succeeded despite their investors. (Source)
Taylor Davidson, formerly for kbs+ Ventures
Build investment theses, invest in people. A common consideration for VCs is whether they want to be thesis-driven or more opportunistic, i.e. do they want to create a thesis about how the world will evolve and then invest in companies building towards that, or do they want to be opportunistic around trends and just focus on backing great entrepreneurs? The difference is how you build your own skillset: do you develop a deep competence in a specific set of markets, or are you more of a generalist with a more shallow understanding in a larger set of markets? The ultimate answer is to not think of it as an either/or choice; it’s important to understand your own skillsets, personalities, and experiences to help you choose the right ways to focus your own career as a VC. (Source)
Brendan Baker, formerly for Greylock
Venture is probabilistic. Because it’s not a linear, predictable path into the industry, you’ll need to take a longer-term systems view. Give yourself a couple years to do this, and be intentional about it.
The point is that people can begin thinking like an investor long before they get the chance. And in a recruiting situation, guess who’s going to get hired? The person who’s begun to build the mindset and network of an investor long before they get to an interview. (Source)
Sarah Tavel, General Partner at Benchmark
You learn how to ask the right questions. Anyone can ask questions. But learning how to ask the right questions -- to use questions as a mechanism to uncover the hidden truth in a company's business model, or the trade-off's in an engineer's architecture, that comes with training. VCs spend a huge amount of their time asking questions, and thus learn the craft of asking the right questions. (Source)
Rob Go, Co-Founder and Partner at NextView Ventures
VC is more negative than you think. ...You’ve heard it said that VC’s will invest in 1/100 investment opportunities they look at. The odds are actually probably worse than that. As a result, you end up saying “no” a lot. Some investors don’t say no – they just ignore, or hope that entrepreneurs get the hint and just stop asking. That’s not great either, and it’s still pretty negative. Also, when you are evaluating companies, you are essentially hearing entrepreneurs pour their heart out and share their dreams to solve problems they are dedicating their life to. But we have to think about the risks. ...Pretty critical and negative (although the best investors I find try to constructively help entrepreneurs solve these problems rather than just point out flaws). Finally, when you work with portfolio companies, you end up helping out more when things are going wrong. Companies that are on a great trajectory typically take less time than the companies that are in trouble and are facing really tough, often negative decisions. (Source)
Denise Palmieri, VC recruiter
Don’t Bite Off More Than You Can Chew Do you remember the snake that ate something that exploded in it? There is nothing wrong with taking a step up on your next move, but remember, there are reasonably sized bites that don’t cause you to choke and the same is true in your career. Be realistic about what you are prepared to do next given what you’ve done so far. Firms most frequently hire people who are like successful people in their firm. Have you taken the career steps already to be prepared for this next step up, or are you trying to change gears completely? It’s good to be able and willing to stretch yourself to learn something new, but a horse is not a wolf, nor will they blend together seamlessly in one group – they each fulfill a very specific need and there is no shame in being a horse instead of a wolf. (Source)
Charlie O'Donnell, sole Partner and Founder of Brooklynbridge.vc
Be an innovation leader in your own world. You don't have to be a former entrepreneur, but being generally entrepreneurial and an innovator helps. Did you lead the investment or entrepreneurship club at your college? No? Why not? There wasn't one? BUZZ Wrong answer. You should have started it. (Source)
Fred Wilson, Co-founder of Union Square Ventures
If you want to be a top tier venture investor, you must be recognized as one of the experts in the field you invest in.
The way you do that is you work for at least ten years in the industry, getting operating experience, building a killer rolodex, and learning how the business works from the inside. Then in your mid to late 30s, you can make the move to the venture capital business, as a partner, not as a wet behind the ears associate who doesn’t know anything other than how to push numbers around a spreadsheet.
I did it all wrong and got lucky. (Source)
Biopharma VC, incognito
While it may appear that being a VC can be somewhat glamorous and lucrative, it is definitely not always the case; especially if you’re not a partner. I rent a one-bedroom apartment and lease my car. I have about $35K remaining of almost $100K in student loans to pay off. I am by no means poor, but my life is not very extravagant either. I believe most VCs who aren’t partners live relatively modest lifestyles. (Source)
Seth Levine, Founder of Foundry Group
Put yourself out there. Union Square Ventures famously asks potential applicants not to send in a traditional resume, but instead to point to the applicant’s various activities around the web (their blog, articles they’ve authored, companies they are helping out with, etc). While this may be an extreme example of a firm valuing the online presence of potential colleagues (and one that has worked very well for the firm), having a visible profile online that you can reference and point to will be helpful in many a VC job search (especially so if the firms you are seeking employment from invest in these areas, as USV does). Your online activity can and should extend to reading and sometimes (thoughtfully) commenting on the blogs of the now vast list of VCs that write a blog. These sorts of interactions are just one way to start to engage in a conversation with people in the industry you might one day work with.