Odds of moving from startup to Venture Capital?

I am a senior at a non-target about to graduate in May 2017 with a 3.95+ GPA. I have accepted a FT offer at a tech-startup in LA. They have around 50 employees. They have gone through their latest series B funding with a post-money valuation of $50M+. A potential exit (IPO or acquisition) is about 3-5 years away.

I am their first hire to be doing any kind of financial analysis for the company. I will also be working in an operations and strategy role as well. I believe it will be a great opportunity to work with a talented team (many are former public c-suite members). In addition, I will be provided with many opportunities to work with VC firms and banks as the company continues to raise capital.

In the long run, I want to get back to a more traditional finance role. I was wondering how likely it is for a startup analyst to break into venture capital (assuming MBA isn't an option - I'd prefer to skip grad school to save $). Any input is appreciated.

 

There's really no firm answer for this. A lot depends on your role, how the startup does, who their VCs are etc. It's definitely possible to go from startup to VC without an MBA but given how many people work in startups and how few junior VC roles there are, it's not super likely.

 

Thanks for your input. I sort of figured this but didn't know for sure. In your opinion, what are my best exit options?

The risk of joining a startup doesn't scare me, but the risk that I won't be able to leverage myself into finance does. I certainly don't want to limit myself to the startup realm only. From my standpoint, it seems that an MBA is the most logical route.

 

Obviously, my ability to network and make connections will be huge in making any transition. I guess I am curious as to how valuable my work experience will look to potential employers.

 

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Best Response

From my experience (having talked to 100+ startups since I've started a couple of months ago), what I think VC firms would appreciate most at this point of time is someone from a very technical background (say STEM or data scientist/AI) vs being operationally strong (which is in abundance). Not running you down but this is my current observation being in the industry.

The real questions would be: 1. What is your underlying motivation for joining a VC? Push or pull factor, ie. passion or desperation? Used to be an angel investor, but now want to do it full time? 2. What do you expect from the VC? Giving you a partner/VP role? Providing platform for you to source for deals? Stepping stone to do something bigger in life? 3. There are many VCs out there, but not many readily accepts a partner/VP who can't source and close deals. You probably have to start building your rolodex from ground up again and it's a very painful process because you'll have to prove your worth time and time again, because nobody trusts you (with their money) at this point of time. Are you ready for that?

Having clarity of thought is utmost important when embarking on a new journey, so that you ride on the wrong track.

 

You probably have a more non-traditional background than most but I can certainly see the similarities between what you have done, are doing and will likely do at a VC/PE in the future.

I have not evidence (no similar experiences or stories that I have heard) but I think the skills you are utilizing now run right inline with what you would need at either place. Whether or not you will get a position will have more to do with how you tell your story and explain your qualifications/experience to a potential employer.

I think you might be better qualified for a VC role then a PE role...or, at least, you would be more likely to find someone willing to hire you in VC vs PE because as trackstar2k2 mentioned in the previous post, VCs like people with actual industry/operational experience. The issue with the PE side is you will be competing against people who will likely have more deal experience than you, which might be valued highly at a PE firm where you are more of number cruncher vs a VC firm where they find a ton of value in people who have started business and worked in start ups.

I think either way, you are seemingly qualified for either, its just which one you are likely to get hired at and which one you would prefer to do. Maybe you would be able to network yourself into a position at one of the equity backers the company is funded by.

Hopefully some of the other members might know "friends" that have been in a similar situation and transitioned to one or the other. Best of luck.

Regards

"The trouble with our liberal friends is not that they're ignorant, it's just that they know so much that isn't so." - Ronald Reagan
 

Thanks guys.

CPH - You are kind of thinking along the lines of what I was thinking. I would say I would be much more interested in a VC role, or at least in a growth equity arm of a PE shop. This current startup has two investors, both of each are one of the two i just listed (one is huge PE shop, think KKR/Bain/GSPIA) while the other is a purely internet/VC fund. I have begun to interact with the Partners from these funds who are on the board, though admittedly, their involvement is less than most since this is in a pretty new space in the internet.

The types of skills simply I am learning are how to build an e-commerce customer base as well as revenues, along with learning to better match the supply and demand in this specific type of business model. Not that this makes me anything industry at all, but ideally if I am sucessful and have numbers to back it up - it would lend some more credibility to my story.

I realize it's a non-traditional path completely - but hopefully with the backing of the founders I would have some strong credentials. My deal experience from M&A is certainly weak given the past year, but perhaps illustrates at least the ability to crank and model if I need to (no much modeling in VC is my understanding).

Thanks again for the responses.

 

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