I mean no offense, but there is absolutely 0 chance you're breaking into VC out of undergrad from the schools you're considering in your previous posts (Nova, Bentley, Fordham, etc.) when it's already very unusual for kids from actual target schools to break into VC out of undergrad.

 
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I just got a VC Associate role straight out of undergrad with a mid-sized fund and it was literally all luck. I saw the posting on my campus job board, applied and emailed the contact with my own intro, and then went through the rest of the process. If you go to school in the Bay Area it helps. If you go to Stanford it really, really, really helps. The reason I got picked up from the pile is that I had experience working at several different hot startups and a buy-side tech investing internship.

The process for getting hired was also super involved. Call with an associate and then a partner. Then a prelim assignment. Then they gave me notice for the super day and a much more involved assignment to be presented the day of. Then I got grilled on my presentation, technicals (cap table/valuation stuff), industry knowledge, and brain teasers. I also went out to lunch with them and did dinner/drinks after. They really have to want to work with you when there's 10-20 investment professionals.

 

You remind me of a person I had been reading about last night, Alex banayan. See I'm from the East Coast so I feel like if I applied my case to yours there would be virtually zero chance. Venture capital is something I really want to do and can see myself doing well in. I have a lot of interest in it, compared to IB. Reason as to why if things were ideal, I would go straight to venture capital right out of undergrad. Would you recommend that I start taking on jobs/internships at various startups and get a buy-side tech investing internship?

 

Alex is a great guy but a huge exception to the rule. Alsop Louie picks up these child prodigies and makes them associates (See David Mace). They're awesome and weird that way.

I wouldn't tell you to go startup internships > buy-side tech investing internship > VC associate because it is a weird case. I can explain why my path worked for the resources I had at hand and maybe that'll help you chart out your own path with the info and resources you have.

I was a technical major focused on a very specific field. I worked in a great lab and got published with that lab and on my own in that very specific field in good journals. I also took on 3 internships at three very hot startups in that field. I then accepted a buy side tech investing role with the intention of helping the firm set up their practice in that very specific field. I was then hired as a VC associate because they liked my background and potential to help them set up the firm's practice in that very specific field. It's sounds strange but I had deep knowledge and industry connections into that field. It doesn't really feel like I do, but I guess it's true.

My advice would be to look at your local VC scene. What are they investing in? If its fintech, learning the industry up and down, work at a fintech startup in operations or business development or engineering if that's your skill set. Then make yourself valuable to those VCs. That might work, but who knows if the resources are there? It really depends on your situation.

Hope that helps.

 

Jamiegrey pretty much gave you all the right advice. It's not impossible, but its just very rare. With that being said, if you think you already want to do VC there are some paths that prepare you for VC better than others.

Passion for investing in tech and the space and ideally a specific niche within tech is important. Read Techcrunch, product hunt, Crunchbase etc and follow companies and how they're getting funded. Most importantly read articles, talk to people, and start developing your own opinions on what you would invest in, whether or not investments are good or bad, and have some evidence to back those claims up. If you're hustling for a VC job and can write up a mock investment memo on companies that would fit the mandate of a VC firm, that can be pretty powerful if done well.

In terms of career paths to get into VC, its not explicitly black and white, but for the most part people who do Product Management tend to move into early stage VC whereas tech bankers tend to do later stage. It also helps to have a technical background of some sort. People from significant operating roles in startups also tend to move into VC, but thats a little harder to target vs some of the more traditional paths.

 

As a person who's in the VC space and has interacted with VC Associates who came straight from undergrad, I can say it's very much possible but as the poster above have mentioned, it's very luck-oriented. I would argue it's possible to control your destiny but it requires insane networking on your end. One thing I love about the space is that VC's are very used to and open to networking with others so you'll find quite a few helpful people.

Going into VC out of undergrad is an incredibly open-ended task, so it's important to have a good understanding of what vertical you want to target and the people in the space you want to contact, ping, and rely on for openings. From the anecdotes I've gathered, most have been very diligent about getting VC internships in the school year and summer and leveraging the connection they gain to jump to another fund. Eventually they'll have a large enough network and enough people in the space to vouch for them that they're able to make the jump directly out of undergrad.

This process above, however, does take a long while and an early investment of your time.

Created a 1-step skincare solution for men. Purchase + reviews appreciated: www.w34th.com
 

You really can't compare VC to banking or consulting simply because all three occupations are so different.

VC is a great opportunity if you see yourself building a career in the Silicon Valley or in any sort of technology-based career (i.e. startup, mid- to large technology firm, etc.). In other words, you're interested in building a career in some realm of technology - whether it's software, hardware, telco/wireless, Internet, biotech, tech services and so forth.

In other words, "venture capital" isn't really a finance job per se even though you are technically deploying capital. The reality is, you're investing in early stage companies where their financial structure isn't particularly complex. Most VCs themselves aren't finance people - they're technologists. What makes or breaks a VC is their ability to invest in the right ideas/products/business models -- and that comes down to their ability to understand technology trends. Remember that the kinds of companies looking for VC funding have very very rudimentary balance sheets (and rudimentary finances frankly - 99% are 100% equity financed) so it isn't about your ability to do fancy financial engineering. It's about technical and management know-how. In plain English, you're basically placing a series of small bets on a bunch of "ideas" and hoping one of them will pop (and expecting most of them to not go anywhere).

So if you're looking to build finance skills that can help you with a future career on Wall Street, starting off at a VC fund isn't really ideal (and if it is indeed a top tier firm, you may even get banks wondering why you'd want to leave to work in traditional finance). But if you're looking for a tech career, it can be a great entry way.

If you're looking to build finance skills, the analyst programs are usually a great (if not the ideal) way to build that up. It's like basic training or boot camp -- not absolutely necessary, but an experience many finance types will respect - whether you end up progressing within advisory/M&A, or switch to sales/trading, or into research, investment management, or even into industry finance jobs (corp development, etc.). The flipside is that it's also easier to get pigeonholed as the "finance guy" should you decide that you want to switch careers into say, marketing or general management or something else.

Consulting can be a great entryway if you're the most open-minded. You'll dabble and do a bit of everything, but be a master of nothing (if you truly get a wide variety of projects). Knowing a little of everything but a master of nothing isn't something you want to be known for when you're older and more experienced (the value of being a "generalist" diminishes rapidly over time), but it can be a good way to explore what you want. And if you join a top tier firm, it can be a little easier to transition into non-finance occupations compared to being an ex-banker.

Alex Chu www.mbaapply.com
 

I am currently interning in a seed - early stage VC firm and I find the experience really unique VC is more about management rather than finance or modeling (you may need a little bit for term sheet, but that's minimal compared to the time spent on management and sourcing deals and other activities) so if you are hoping to learn financial modeling or IBD equivalent experience out of this internship then you probably shouldn’t take this offer Also as you are only interning, you probably won’t be involved in management of existing portfolio companies, but more in sourcing deals and market research. Do check with your contact what exactly is “sourcing deals” – as it might mean reading tons of business plan everyday…… Since you mentioned the VC firm is pretty famous in SV it probably won’t be actively “sourcing deals”; just reading the business proposals sent to company mailbox will probably take half of your internships…..

Nevertheless I would say you can do a lot and learn a lot interning in VC firm, market research on various industries (for SV particularly in IT related), due diligence, sitting in pitching sessions, networking, and even helping with term sheet structuring etc.

But again this is only my personal experience in a small VC firm, the whole industry is huge and there are all sorts of VC firms at different stages focusing on different industries and PEOPLE are important as well, so YMMV….

Hope this can help; if you need more info PM me, also you should post this in the VC section of the forum……

 

If I were any good at engineer(ish) stuff, VC would seem like a pretty sweet career path. If you can get a sense of what the shop's medium, long-term view is for you, that could help your decision. If they just want somebody to source deals for a couple years before being let go, I'd think twice. If they're grooming you for more responsibility, I say go for it, provided the Silicon Valley is a place you want to work in for a while.

 

There are many reasons, but money is not necessarily one of them. In fact, salaries will be lower than at IB/PE-LBOs and Hedge Funds. The hours and lifestyle (and dress code) are much, much better, though. You will have a life. You will also gain exposure to disruptive and break-through technologies before they hit the market (imagine watching Google evolve from an idea in the head of two dorky engineers from Stanford to what it is today).

Eventually, though, you will either need operational experience at a start up (or perhaps marketing/engineering) and/or an MBA from HBS or Stanford; but if you can get promoted, then you are likely to get carry. That's when you start making real money.

"Categorical Imperative: If I cannot look at my mother or my wife in the eyes and explain it, I won't do it" - Some British MD.
 

VC is a form of PE. Maybe thats why..

Prestige is a funny thing. It can come from working at a start up in a certain industry, having your own business, working for a large company or working in a certain position (investment analyst at a hedge fund or a venture capitalist).

I think VC is prestigious since majority of the people working there essentially are working with entrepreneurs, are investing in companies that some associates at HF and large cap PE shops may not understand fully (yet).

I think it might be prestigious working as an analyst/manager at a company like Microsoft or Yahoo.

I think it would be even more prestigious working at Better Place (electric cars) than working as analyst with McKinsey or Morgan Stanley.

But thats just me. Like I said, Prestige is a funny thing.

------------ I'm making it up as I go along.
 

What about at the partner level, do the partners at the top funds like Sequoia make as much money as PE on average? Do early stage funds make more money or late stage funds make more money on average? It seems like the 2 and 20 fee model is the same as PE, so it all depends on performance (IRR) and fund size. It seems there are multi billionaire VCs in Silicon Valley, like there are multi billionaire PE/HF people in NYC, but I am guessing the number is lower.

 

This is kind of like saying why is joining McKinsey more prestigious than joining BB, even though the pay is lower. Consulting takes less people than banking, and VC takes less people than PE.

 

carry is the 20% of profits that the VC charges their investors.

If a VC raises a 1 billion dollar fund, if he makes good investments and doubles the fund size to 2 billion, then the VC can pocket the carry which 20% of the extra 1 billion profit, which is 200 million. The carry is in addition to the 2% management fee that the VC charges regardless if the fund makes money.

 

Most people I know got in pretty random shitty places with only one office and minimum amount of staff and a single office in Chicago. You do not want to start your career at a no brand company. If you do not succeed to land a successful and nationally recognized brand then just go for banking. Best way to burn your future career is to start at a small unknown VC where you will build little or no skill, I would even take an unknown investment bank before that. Avoid! People that accept offers from small VCs are those with no options. For him it was either that or an unknown shitty consulting company specializing in tech. Pick your poison, lol

 

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