Making a Transition into VC?
Hello everyone,
I've been working in commercial real estate tenant representation in NYC for about two years now, and I'm interested in making the transition into VC. I've spent my time focused on the tech industry, and have brought in two deals, having assisted a trading company, and a tech PR company grow. I also attend a ton a tech events, and interact with a large number of tech executives.
My passion is to assist companies grow, and I believe I'll have a greater impact at a VC firm. Does anyone have any experience making a transition to VC from a non-finance background?
What sort of skills are needed for an entry level position at a VC company?
What's the day to day like?
Any recommendations on which firms to look at?
I'm fully willing to do as much work as possible to learn, including weekends and nights.
Here's an interesting week in the life/AMA post by a VC intern, https://www.wallstreetoasis.com/forums/a-week-in-the-life-of-a-vc-inter…
I'll paste a portion of my reply from another similar thread about 15 below yours on the first page right now.
This last paragraph really points at a piece of your mindset I think may be a bit wrong. It's not about the volume of people you meet or events you attend, it's the caliber of your interactions that matter.You have three questions; let's break them each down.
Both of these are addressed pretty well in another post I made in another thread:
In short, for skills (some of these are traits):
For more on the day-to-day, I'd read pretty thoroughly on Medium. Tiffany Zhong (who essentially had a self-made Thiel Fellowship-type role at Binary Capital) wrote a long one. Here is a fairly thorough GSB case available for purchase. You can find more on this with cursory research on your own.
Anyone that will take you. I'm not being glib; it's a small industry. Your odds of getting into a First Round or GC or USV are comparatively lower (given that those are prominent firms with stellar track records who have their pick of strong college grads willing to take a $70k/year entry-level role in the industry, associate candidates who've spent 1-3 years in a fast-moving startup, or seasoned operators who've been managers at a mid/large-sized tech company and are looking to switch hats). That means you need to draw up a list of every fund you can identify that invests at the stage you're interested in.
Here are a couple other threads on venture I commented in that I found in my history:
Good luck.
Thank you APAE, and Kidbrown for the incredibly helpful posts.
Getting into VC with no prior finance experience (Originally Posted: 02/03/2018)
Software engineering/tech consulting guy here. STEM undergrad. Headed to HBS this autumn. How do i get into VC post-MBA? Thanks in advance!
123-123, shame nobody has responded. Maybe one of these topics will help:
Or maybe the following WSO members have something to say: Hyon-Soo-Park kilo fox GoW
You're welcome.
Changing your attitude in the first place?! VC is somehow entrepreneurship at the highest level and if you need someone to tell you how to reach your goal instead of finding out your own way, you'd be doomed as entrepreneur and hence in the VC.
Anyway, try to study the more profiles of the VC analysts, associates, and so on you find on the web (e.g. VCs, LinkedIn, interviews). Find the common traits, do a HAVE/HAVE NOT comparison and understand what you lack.
Generally speaking, VC is providing companies capital and skills. As junior hire, you will requested to do a first analysis of the investment opportunities and to work on the invested companies. As for the first, you require:
critical thinking knowledge of what's going on in the industry. While you'll hopefully develop the first at HBS, the second one is something you have to work on your own. Re the second one, I think it's more a matter of dedicating time and energies to study the specific situation and find similar cases to solve issues.
So first off, congrats on HBS. That should open up a lot of networking opportunities in VC.
Second - it’s generally quite difficult. Buyside post-mba in general is difficult because it’s highly desired but a lot of places run lean and only hire as needed (ad-hoc) vs. classes like IB or consulting. Just like with PE, it’s ideal to have come from a VC background pre-mba. And even then, it’s tough. Also, roles available in the summer may not translate to FT opportunities because the VC shop doesn’t actually have a need for analysts / associates / sr assoc (some are probably just providing a summer slot to keep a good relationship going with top bschools for future hiring needs, or really just to get some summer labor/help).
That said, while I didn’t speak with HBS alum specifically, I was previously contemplating b-school as a way into VC (without prior VC background going in) and spoke to some people that were successful in landing offers. The people that do have to REALLY hustle. They had to do their own homework and understand the industry and trends (read TechCrunch or CB insights or Fred Wilson’s blog, and podcasts daily), network their ass off so they make their own connections with VCs in the area, get involved with the local startup ecosystem and scene (e.g. volunteer their time as advisors for university run accelerator programs or local accelerator or incubator programs), and so on. One guy I spoke with said he offered to provide a VC a lot of free research and work (in the form of industry summaries, forming his own investment thesis, identifying interesting companies that fit that VC’s stage and interests).
They essentially had to demonstrate how serious they are to wanting to be in VC. While not having prior VC backgrounds, it also helps when they come from some finance, ops, startup type background. Tech consulting could work. You just need to talk to how you add value.
The folks I spoke with were at a MBA business schools">M7 or similar type school, so I imagine HBS would be “easier” in that it could provide more opportunities. But I don’t think it would be any different in terms of there being limited VC spots for FT. I think you’ll have to really network with the startup and VC scene in Boston, and get involved so that when you DO get an audience with interested VCs, you can talk the talk.
the secret sauce is using the search function
I get offered positions with VCs all the time but I'm an entrepreneur with a few successful (and now automated) companies. I don't really get why entrepreneurs go to VCs when you can make way more money owning your own portfolio of companies with good management.
You're underestimating how many in this market are just posers and simply want a high paid job
You won't start HBS until this August? If so, you should consider a pre-MBA internship. I don't know much about the process so I'll let you do research on that. I know the opportunities exist because a friend of mine did one at a VC shop before starting b school.
That’s a good idea. Do you know if it was paid or not? Or if paid was it a fair amount (or market for intern), or just so that they’re not paying nothing. Was always curious about people getting internships leading up to bschool.
What do you want to know about getting a VC job? (Originally Posted: 07/07/2015)
Hey guys and gals, I'm going through the VC interview process now and working on documenting what I'm learning. May end up putting out an ebook or something (ideally co-written with someone with more experience). It seems like there aren't a ton of great resources out there (I'm thinking Case in Point for consulting interviews).
Anyway, what sort of stuff would you be interested in knowing about the process to getting a VC job? I'm happy to provide my perspective directly wherever I can.
writing you a PM
Have you finished your MBA or do you still only have undergrad?
Is it possible to break into early stage funds or is it later stage funds that do the lion's share of recruiting?
What was your game plan as far as networking?
No MBA, but I was working in a post-MBA role at MBB consulting. I know it's not the same, particularly to many VC's, but it's relevant.
VC recruiting is interesting in that anything is possible. If I understand the story right, there's actually a semi-famous girl out in SFO right now that joined a mega fund out of high school. That aside, later stage funds definitely hire more junior folks. There's just more work for them to do. I was talking with a partner who had been brought in to run a growth fund for a good firm on the east coast. He had 2 associates working with him, compared with 2 associates assisting the other 6 partners doing earlier stage work.
My original game plan was to just talk to as many people as possible that are plugged into the tech scene. Conversations with founders help me develop my portfolio of interesting startups and potentially connect me to their investors. I do whatever I can to convince VC's to talk to me, ask interesting questions, and put interesting startups in front of them. I've actually set up 3 startup VC conversations in the little time that I've been doing this.
The game plan kind of shifted a month or so back. I got a ton more traction than I expected from working with recruiters, so I've been mostly focused on the processes that I got into through that.
What skill set would you say is most important and necessary for becoming a VC Analyst? What jobs besides MBB and IBD/PE would you say are good to break into VC?
A survey a few years back listed the top most common backgrounds for VC partners at top firms. Oddly, F500 was the single most common at 58%. Of course, that's a little misleading, as many people will have some sort of corporate experience; that doesn't mean it's the best way to get a job in VC. Startup leadership/founding was up there with 50%, not unexpectedly. MBB was next, at 33%. Finance (IB/PE) was actually last, at about 25%. Without those 3 or 4 backgrounds, you're basically down to networking your way into a job, so it doesn't really matter as much what your background is.
Yes, yes, yes, yes, and yes. I know the traditional advice is to focus, but I've found that counter-productive. Of those, the only one that I haven't gotten traction in is Boston. You're going to be starting at Booth in the fall, right? I'm actually in the final round for a CHI firm.are you looking at early or growth and nyc, sf or boston?
I forgot to ask this question in my previous post, but do you have knowledge of what European and Asian VC recruiting is like?
NYC is similar, but in a very different way. There are more late-stage firms and they're more finance background friendly. NYC has a generally less open culture than the west coast... entrepreneurs are less willing to share their ideas with you and VC's are a little more likely to pull the busy card.
Chicago (and any smaller market) is generally much more open. VC's are successful by being open to as many opportunities as possible and being very approachable.
I'm happy to talk about my experience with the CHI firm, but I'll hold off until I get a decision one way or the other :)
How to get VC-level knowledge of an industry? (Originally Posted: 04/14/2013)
I'm interested in pursuing a career in entrepreneurship, and with most companies looking to become large, venture capital funding is necessary. So, it obviously helps to know an industry inside and out before diving in.
What do people who work at VC firms that specialize in certain industries do to gain an in-depth knowledge of those entire industries?
I would advise against this approach. The current "en vogue" thinking in the startup world is lean methodology. Assume you don't know **** because, no matter how much experience you have, that's the reality. Ship as much as you can as fast as you can and iterate on your business model until you get some traction. Then, when you have something more than an idea, go raise money.
Also, don't expect VCs to know anything or add any value to your business. Even if they're former entrepreneurs the market changes so fast that if you're not in the game for even a few months, you're experience is outdated. They're there to give you capital, not run your business.
So basically, just create and sell as much product as possible, then, when needed, raise capital through VCs?
Is the Lean Methodology book worth reading? About how often does the "en vogue" thinking change?
Talk to customers, figure out what they want and what they will pay you for (bonus points if you get them to pay you real money in advance). Then build it as quickly and cheaply as possible. Most of what you try will fail. It's better to find that out in 2 weeks than 2 months or, God forbid, 2 years. Once you hit on something with some meat behind it, you can make the product better, raise a bunch of money and take over the world.
Ries' Lean Startup is probably worth reading but be careful not to get bogged down in reading/preparation. You will never be ready and there's always more for you to learn. While you were doing market research your competitor just built that awesome idea you had and sold it to Yahoo for $100MM. (If you insist on doing prep work you'd be far better served by becoming technically competent than becoming an industry expert)
The natural tendency for a lot of us Wall Street types is to overanalyze and overprepare. That's something I'm constantly working to overcome as an entrepreneur. I'm not saying be undisciplined and sloppy, but you need to get comfortable with experimentation, uncertainty, and failure.
The world has come a long way in understanding how startups work and the "lean" approach seems both intuitively correct and empirically sound so I'm inclined to think it has some staying power. Of course, you'll find your own way and reach your own conclusions.
One final note of caution: there are a lot of people running around doing "lean startups" on the side and using it to justify releasing shitty, half-finished products. Don't be one of them.
Brilliant post, and for that, a silver banana. Thank you very much for the detail. Both the 2nd and 3rd paragraphs resonated especially well with me and made a lot of sense.
With the lean approach, do you still go through the formal business plan strategy (like the in-depth ones that are usually estimated to take about 50hrs to put together) or do you just put one together as you go?
Breaking into VC with my background (Originally Posted: 03/08/2009)
I have about 6 months of full time IB experience (also 8 months internship experience) and about 14 months of experience at a Long/Short Equity hedge fund. I've gotten a glimpse of what the VC world is like and I'm really eager to break into it. Problem is, with my background, applying through online job boards (Doostang, School etc) or through recruiters (Glocap) isn't working out. I understand because they prefer investment bankers or consultants with 2-3 years of real deal experience. I've tried emailing firms and alumni, and even offered to work for free if necessary for a while, but I'm still waiting to see how that works out.
Anyone have any advice on what's the best way to go about this ? I feel like I'm being pigeonholed because of my hedge fund background. I don't even mind working in a strategy role at a F500 firm for a while if it helps me accomplish my goal but even that seems like an uphill battle right now.
most VCs aren't hiring right now. VC is a net negative busienss..given the economy, their portfolio companies must be doing horribly (well, most). many of them are getting blown up as a result. Some VCs aren't even getting committed capital from their limited partners. it's messy.
note that VCs usually hire when they raise capital for a new fund. as you can imagine, i don't think any vc's raising a new fund right now.
vc's generally hire in up swings, not now... a freefall.
I understand hiring has been scaled back but some VCs are hiring, I've applied for about a dozen Pre-MBA VC jobs over the past 2-3 months. I guess I'm just wondering how to position myself best for when the VC market does come back because right now, my approach is obviously not working.
Need to know everything about Venture Capital (Originally Posted: 12/11/2011)
Hey all,
I posted a similar thread about Private Equity, but the shop where I will have my discussion next week is also specializes in Venture Capital
Same story, through networking I have been invited to speak to a very small, but realtively big and successful, private equity and venture capital shop. They focus on secondary investing. Had a phone conversation with a manager and he liked me and I do not want to disappoint him.
I know about Venture Capital and what it is, but thats as far as my knowledge goes. I want to know about the venture capital market and the secondary venture capital market. I really want to impress this guy.
What resources can I use to best increase my knowledge about venture capital, the venture capital market and the secondary market. Also would like to know about famous venture capital firms which made famous investments. ex. facebook, google etc.
I really need to ace this fellas, any help would be appreciated. Thank you.
Current events:
http://dealbook.nytimes.com/category/main-topics/venture-capital/
[quote=M Friedman]Current events:
http://dealbook.nytimes.com/category/main-topics/venture-capital/[/quote]
Doesn't seem to be updated very often. There's several days in between each front page post....just sayin.
yea current events are something i need to keep track of as well
any more input fellas, my meeting is tomorrow.
Best Position for VC entry (Originally Posted: 10/15/2014)
Hi Monkeys, I’m currently working for a MM IBD firm in a relationship heavy Sponsors group (FWIW, hours aren’t bad and I generally like the people/location). Long term, I’m interested in going down a VC path, although not necessarily at a huge shop. Anyhow, I’m considering potential intermediary steps that are available based on an initial pass at networking (will continue, obviously) and am interested what you guys think makes most sense:
1) Work for an accelerator (think StartX as far as quality/location goes) 2) Lateral to a boutique tech IB firm that works with early stage companies 3) Corp. Development at a big tech firm 4) MM PE firm 5) Stay where I'm at
Also, let’s assume I’m willing to do any of the above for 2-3 years, after which I would pursue a start-up idea full time, assuming I find a worthwhile idea, am in the appropriate financial position, and haven’t landed some sweet VC gig. Thanks guys!
I'm not sure if this is the best step as I'm fairly inexperienced, but my first gig out of undergrad was at a well know 4 month accelerator and I got quite a few VC interviews and will be headed to an early stage fund. I have no IBD experience.
I would suggest targeting tech-focused growth equity firms or the growth equity groups of firms that are traditionally known as VC firms. It's going to be very tough to get into a top notch VC firm as a VC associate (these positions are extremely rare), but getting experience in mid to later stage tech investing would allow you to utilize your banking skills while getting exposure to the tech environment.
My background: previously worked in the tech group at a top tier MM firm, now am in the growth equity group of a northeast VC firm with between $3B - $6B AUM.
Firms to consider... not an exhaustive list or ranked in any way: Battery, Spectrum, Bain Cap Ventures, North Bridge, Polaris, Redpoint, TA, Summit, Volition, Norwest, Insight, TCV, General Atlantic, Bregal Sagemount, ABS, General Catalyst, Highland, JMI, LLR, Mainsail, Accel-KKR, Primus, Susquehanna, Vista, Westview, Openview, etc.
Road towards Venture Capital (Originally Posted: 03/30/2012)
I am in high school , no sure what college I want to go to. DOn't know how to start. I am reading books on long term investing.
CAn anyone help?
Read these forums. Partiularly, read the VC Vernacular forum. Specifically, read Jimmy Dormandy's thread. When you've read everything on the VC forum and JD's thread, and when you've read everything those threads have told you to read, then you should be asking these questions. Really, you need to do a lot of reading and a lot less asking questions for probably the next 3-6 months.
Also, here you say you want to do HF: //www.wallstreetoasis.com/forums/hs-college-financing
I have a feeling you don't know what you want to do, so you're looking at the most prestigious/sexy industries. Get over that high school bullshit. For one, it's obnoxious. Two, you're going to spend a lot of time cleaning up after yourself if you convince yourself you want to do something you don't.
So... start reading, stop asking questions. :)
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