Long Term Success in VC?
For any of you who have been in VC for more than 5 years, what were some things you did right, what are some things you wish you knew, what helped you stay in VC for the medium to long term?
For any of you who have been in VC for more than 5 years, what were some things you did right, what are some things you wish you knew, what helped you stay in VC for the medium to long term?
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What were some things you did right?
What are some things you wish you knew?
What helped you stay in VC for the medium to long term?
Thank you - this was really helpful! Not OP but I was wondering if you could expand on this point: How to rigorously manage my time when there's no structured direction but high expectations? How have you worked on managing your time (assume it's split between networking / diligence / research work) and what are some advice / tips you might give to a younger self (newbie in the industry)?
Since there is less structured direction, you need to both (1) set good personal objectives and (2) manage your time effectively. For objectives, try to align them with the core functions of the firm (sourcing, diligence, closing, portfolio support, LP relations, and LP sourcing), and be transparent with your principal/VP/partner about how you're spending your time above the work they give you. As a junior you'll be mostly doing sourcing and diligence, so I would focus your energy on building out that network and being present at events where those companies are, then provide notes on people you've met and useful market knowledge you've gathered to your team.
On the management side of things, you likely won't have structured tasking, so I recommend setting up something like Asana for yourself, and do personal agile sprint planning where you track your velocity of work (points). Make sure to clearly scope work and set deadlines, and get immediate clarity if something is unclear to you, surprises are fun in your personal life, but you should be as predictable as possible in a work context. Once you have this in place, it'll be easier for you to communicate your bandwidth and how you're spending your time to senior people at your firm. It also makes it easier to promote you as they see you helping push team objectives, but try not to overstep your boundaries, nobody at the firm expects you to be convincing LPs to invest in the fund, and you are more likely to do harm than good.
Not the OP but is great advice, thank you for sharing. I was wondering if you could elaborate more on the two items below:
Generally founders want to talk about what they want to talk about, and it's often not what will make or break a decision for you to invest. Related to this, formal pitches usually eat up a ton of time, and often focus on the wrong things. The solution is to have a mental framework that you can follow, and ask questions around this framework, I typically preface the discussion by saying I prefer something more conversational rather than a formal pitch, below is an example of how I use my framework:
1. Write down the following headings on a notepad: Product/Problem; Market; Competition; Technology/IP; Regulatory; Traction; Financing; this roughly parallels some of the key headings in our diligence memo.
2. Before the meeting, review the pitch deck, website and/or crunchbase/pitchbook of the company, and any other relevant high level reading (~10 mins max), and under each heading put bullets with the answers that you have already. This doesn't need to be thorough, just enough that you're not starting with nothing.
3. Write down any critical questions that occur to you in this review that will help move the needle on any of these categories (or the investment as a whole).
4. Once the call/meeting starts, break the ice, then give a casual overview of the meeting, usually a brief intro of our fund followed by a discussion about the company; for early stage companies the question I like to start with is "can you tell me a bit about your background, and why this particular problem?". OR if I'm tight on time I'll usually start with "here's my understanding of what you do, can you let me know if I've missed anything important?"
5. Once you've established the specific problem they are solving, and how they are doing it, then go and validate other headings, including commentary on big areas of concern.
6. Finish with a financing discussion, see where they are in their process, and offer to help.
Sometimes founders like to ramble, and there's a few ways you can interject, for example you could say "appreciate the added detail on X, just in the interest of time, wanted to learn a bit more about Y", or "sorry to interrupt, you said X, just wanted to get clarity on Y". There's a few ways to do this depending on personality and whether they are technical or more of a business type. Apply active listening techniques such as paraphrasing what they said back to them, or asking for clarification if they are vague about something.
Super helpful context--
Somewhat related question.
I'm in two very prelim discussions around hybrid roles with a small seed / early stage VC's--focus would be around helping portcos scale but also some time allocation on traditional diligence and general fund admin. (Both are very small) Trying to gauge the right way to structure the opportunity--my goal is to "break in" and parlay this into more of a traditional role in the VC ecosystem. Is there precedent for this kind of entry, what type of comp structure should I look for, and what the longer term payoffs would be? Context is a I'm post-MBA with 4+ years in growth strategy consulting. This will require a paycut but the option value from a career standpoint seems worth it.
HootieMcVenture you seem seasoned / have perspective from a lot of different facets of the ecosystem, so welcome your POV. Thank you!
Hard to say exactly without knowing a bit about the funds, but the roles you are positioned for here are effectively “platform”, ie your responsibility is to support their ventures, and on diligence it seems like you act as more of a KOL “key opinion leader” rather than an analyst. That means you don’t get much exposure to the core work of a VC which is (1) sourcing and (2) diligence. Effectively you’ll be a part time consultant. Now I don’t want to dismiss the value of the relationship and the exposure you’ll get, but it might be hard to sell that experience for a proper VC role, and a more impactful role might be to act as a venture partner (if you have exp, it’s non operational, and your job is to source deals), or offer to join a VC as a scout, and part time help source deals. A little bit of that experience with a reputable fund and you will be able to sell that experience into a proper analyst or associate role at a VC fund.
Thanks Hootie--appreciate the POV. Most of my work as a consultant has been in the diligence space primarily for Growth / LMM / MM PE funds so I'm familiar with key diligence questions mostly from an outside in POV (albeit at a later investment stage). My work there is the manager / director level (again, 3-4 years post MBA), so this would mean stepping back into more of an IC role with the payoff being access/exposure. More context on the funds, both have raised their second funds of around 25-40 AUM and basically have a founder/lead GP and junior analyst/associate already on board. Given their scale/AUM they don't have a ton of $$ to invest in new roles but also may be looking for more scrappy support.
1.) When you say a more meaningful role would be as a "venture partner", are you saying I would need to come in with actual VC investment experience? (Won't pretend I currently have, but I am familiar, have connections, and can do self study / training)--also (and this is pure bet-on-myself optimism) I have confidence I'd do well sourcing deals--plays to a lot of my strengths (a sentiment which has been echoed by senior people in the VC community).
2.) Acting as a "VC scout"--am I understanding that basically this is an offer of free labor to help purely with sourcing deals to prove myself and use that to parlay my way into a proper role either with the funds I'm already in discussion with and/or elsewhere? How long does this typically take? Context, I'm not on the younger side so this is more pivot-y for me and don't think I can make the move to start over in a pure analyst role.
Appreciate your added perspective / thoughts on the above and how best to position myself
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