IB to VC vs. Start-Up?
I'm currently working in IB - newly promoted associate, just over two years experience in generalist coverage. Went straight into IB analyst programme after graduation so no other real experience. Top 3 BB but not in the tech team, although have some experience that could be spun to fit VC / growth type firms.
I'm interested in going down the VC / start-up route but I'm not quite sure if VC makes sense for me. I'd be looking to move within the next year. The VC role interests me and I always thought it would be a nice balance between the start-up world and more of the finance stuff I'm used to. However, I can't see that I'd be able to add much (if any) value? I'd just feel a bit stupid trying to advise founders when I have no experience. I'm not just focusing on prestige but also don't want to end up at a fairly low tier VC fund (if I couldn't get much better due to lack of experience) and then get stuck there.
I'm wondering if it'd be better to look for roles at a start-up and get some operating experience, which would hopefully complement my background in finance. I actually enjoy the strategy / "soft" kind of work I do at the moment more than plugging numbers into a model and running DCFs. I'm not sure where I'd really fit into a start-up, but hopefully could find something that interests me.
Eventually I think the goal is to found my own start-up or at least join one as an early employee.
If anyone has any thoughts, they'd be much appreciated!
If you have a time machine and can go back to 2014, startup. In 2022, I'd apply directly to VCs and then take a year or two to work in one of their portfolio companies if they themselves recommend the operating experience or go to b-school. Startup folks have historically been really bad investors, which is why you're not seeing the startup -> VC pipeline these days, so joining a startup right now for the purposes of applying to VCs is not going to be helpful for you, it's only going to delay your entry into the industry.
Thanks a lot, this is really helpful - appreciate the input
Do VC. Because you’re going to be speaking to so many startups, you’ll get a broad sense of what is working and what the fundraising climate is like. That is of huge value.
Depending what kind of VC you’re at, you can also help with the modelling aspect. It’s nothing fancy, just unit economics and IS modelling haha. If you’re doing seed investments you’ll probably have to make a basic cap table.
You’ll also learn a shit ton and build a network to help finance your eventual startup. Good luck :)
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