Venture Capital Confusion
Background: 3.9+ GPA junior at a target ivy; engineering and finance majors.
I got a summer internship at an early-stage VC and they said they have full-time analyst undergraduate opportunities. I haven't fully had the chance to discuss all the questions I have. When I asked "What's the career progression like?" they responded "Analyst, Associate, Principal, Partner, Managing Partner."
Does being an analyst mean I will be doing pure deal-sourcing for 3 years before being kicked out to get an MBA? Or does this mean I will be on the partner-track? They're a smaller group with ~500 million in AUM. And, should I take the VC full-time offer (if I get it) right out of undergrad? Ideally, I want to be a partner at a VC as a career.
NOTE: I did do my fair share of searching and reading the VC forums, but most of the results are a bit outdated and sometimes even more confusing.
Most VCs do not promote analyst to partner, though there are some exceptions. But analyst roles differ widely from shop to shop - some will have a heavy deal sourcing model and others you'll be involved in all execution - structuring term sheets, modeling returns, tweaking financial projections, etc. This is a question you should be asking the firm.
Tough call on what career path is ideal if you want to make partner at a VC firm. A lot of VCs look for prior operating experience - you'll see the rosters of prominent VCs lined with former CEOs who've successfully built and sold companies. West coast VCs tend to have this profile over East coast or Midwest shops, who sometimes hire those with finance backgrounds. I've talked to some who got in VC early in their career, and they say it can actually be an uphill battle if you haven't developed hands-on domain expertise. Others argue you don't need and will never have as much industry expertise as management team running the company you fund - it's your knowledge of typical growth profiles and relevant contacts (among others) that's valuable to them.
As to which path you'll take, a lot depends on what's communicated by your firm to you on expectations and if you feel like you're learning enough and fast enough to continue in VC without other experience. No harm in starting as analyst role - see how you like it and see if you can envision yourself doing what the partners are doing, how the partners are thinking and developing the contacts the partners have by staying in your role. If you have doubts, not too late to work in a portfolio company or do business development for a few years.
Another thing to keep in mind - you may want to ask your firm if your internship has the potential to lead to a full time position. I have yet to see a VC firm extend an offer to an intern (though I believe it does happen). A lot of companies hire interns just for a specific project and have no intention of asking them to come back.
Yep, any VC/entrepreneur career path is going to be a lot more complicated than your standard IB track. It'll be much more firm specific.
You should really also think about starting a company of your own, or getting in early enough somewhere so you'll have equity. With your engineering degree it should be realistic, and people at the firm should be able to point you in the right direction.
with your resume...why wouldn't you be looking to start a business...then get into PE/VC later on down the road? If I were a VC, and you haven't started a business or anything really relative to that, you wouldn't possess the tacit knowledge needed to really thrive in the industry (def. not out of ugrad). I am sure, given your contacts, you got an idea that could be put into beta and thus funded...
could be wrong though...
OP here, thanks for your replies. Does my summer internship at VC limit my chances at, say, getting a full-time offer in IB or Asset Management at a hedge fund? I'm interested in all of those but I fear I'm spreading my interests too thin. I just hope that my summer internship at a VC doesn't kill my chances elsewhere if I decide the career path is not worth the risk.
Even if it does kill full-time prospects elsewhere, I hope it doesn't kill my MBA application or full-time prospects post-MBA.
@CharmWithSubstance: Yes, they offer full-time analyst positions for undergrads, though this is not the industry norm.
@math_user, @kellykid: I have been working with a couple of start-ups for a while. However, I don't really think I would have enough resources (time, capital) to work on a few ideas I have on my own.
I'll ask my firm what the career progression is like with them.
It's fair to say that the VC skillset is not as "transferable" to banking and hedge funds as maybe a more traditional IB role. For full time this may be a concern if you're looking to switch industries 2 years into the gig without b-school. For full time campus recruiting though, you're still being assessed for overall intellect and competence as oppose to relevant work experience. They (esp banks) look for people who are smart and trainable. Your VC summer internship will serve as validation that you're capable of landing a gig in a selective industry.
Look at the profiles at BVP.
http://www.bvp.com/Team/Default.aspx?m=1
...if you haven't had a hand in a sucessfull venture good luck making partner. (Keep in mind this is a top tier shop, I wouldn't t know how things run at smaller shops).
By starting as an analyst for this fund, you'll see how these guys deploy capital and to whom/their reasoning. Do it for 2-3 years. You'll meet tons of talented entrepreneurs and VC's, tech-crunchie's, etc. Even if they kick you out then, you'll know exactly how to structure a start up to get funded and liquidate effectively 10x better than any banking analyst, consultant, or 1st entrepreneurs out of ug that have stumbled due to not knowing any better.
Start a sucessful start-up then apply to HBS and your set up very well, probably as good as you can be, to be a partner in a VC fund.
Also, a prominent VC told me once "a good VC is either very good at making something, selling something, and the best VC's are better than anybody and finding people who can do both,"
Thanks a lot for your replies.
@CharmWithSubstance: So, if I attend b-school, will I be able to make a career change to IB without previous direct IB experience?
I've met plenty of people who went into IB after doing something completely unrelated prior to B-school. Recruiters are looking for smart people more than anything.
Yes out of b-school you should be set for IB recruiting if that's what you want.
Start a company or join a Start up only if that's something you really, really want to do. They're both high-risk endeavors, and doing them solely for the exit opportunities or as a bullet point on our resume is not an intelligent use of your time in my opinion.
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