What’s the Best Path into VC?
Hi everyone,
I am currently a freshman at a non-HYP ivy, and I’m pursuing a CS/Econ double major. I’m pretty overwhelmed by all of the career paths open to me, so I’m looking for some guidance. My ultimate goal is to go into GE or VC and help grow technology companies, but that isn’t set in stone. The one thing I know for certain is that I’m interested in tech, and I don’t want to be a SWE. What should I be targeting in terms of internships and opportunities to best set myself up for the future?
I’ve been thinking of four main paths:
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BB TMT —> PE/GE —> VC
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PM (Product Manager) at FAANG —> Startup —> VC
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VC/GE out of undergrad (Insight, BVP?)
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Hop around at a few startups, hope for a successful exit, and jump to VC
These four paths, or a combination of them, seem like possible paths for me. Should I be focusing on one specifically? Should I try to get more tech-related internships and recruit for product management roles, or should I aim for more finance internships to break into IB TMT? Product management and IB are extremely different, and to my knowledge, I’d have to tailor my undergraduate internships to recruit for one or the other.
I appreciate any guidance or advice. Thanks guys.
Bump
If you are thinking about "paths", you don't really have the mentality for the startup / VC world.
I see what you’re saying, but there has to be some advice beyond “See where the world takes you… don’t worry about the path!” I’m not looking for a completely perfect path. I expect many bumps along the way, and I plan to adapt to those bumps, but I’m looking for a starting point or roadmap to base my decisions off of in the present. It helps to be guided by an effective plan of some sort, even if that plan will change countless times over the next four years.
Can you just dm me? I’ll give you the advice i can.
Bump
Del
VC attracts people from all walks of life. There's no set path.
Personally, I think its a garbage career path unless you are able to crack it at a top fund. Most VCs do poorly.
Top Ivy -> Top tech banking group -> Top VC would be the ideal path. But even from my top Ivy, I've seen so many classmates leave VC. Your whole career is predicated on making a couple investments that 100x-1000x or whatever (while the remaining 100-1000 investments are losses).
There are way too many VCs out there right now. Many of these VCs are going to suffer terrible losses with how the recent market has performed.
The space is saturated with money and its a joke to raise money if you have a passable idea. Another path would be working for a startup to learn operations, do your own startup, sell it, and then start your own family office/VC fund. There's no real special investing skill you need to evaluate VC investments like you would in PE.
As a current operator myself... I much rather take money from another former operator than some asshole who worked at GS/Sequoia but has never run a company in his/her/they/its life. I can actually call this investor and actually receive value added advice. I bet you that the industry moves more towards this direction as founders/operators themselves with great ideas are screening for who would be the best investors for their companies.
Would GE be a better long-term option? I’m interested in working with tech companies who have a desire to expand, so I’ve ruled out PE as an ultimate goal. I also don’t want to have a career where I’m throwing darts at a board and hoping a few stick. I thought there was more analysis that went into early-stage companies at VC firms?
To my understanding, there are two types of GE firms:
1) Firms that focus on buying out large, profitable companies that are quickly expanding and need more capital.
2) Firms that take a minority investment in fast-growing, earlier stage companies.
I assume GE would be a more natural move from a banking background, but I’d be interested in more of the early-stage deals. The one major dilemma I’m facing is that if I don’t enjoy VC, I’m kind of stuck without any real skill sets.
Banking and GE seem to be more risk-averse careers, while startups and VC are very risky. I guess it just comes down to the environment I prefer.
If you are dead set on private tech investing (venture or growth), and are at a top target, you should gun for joining a firm as an analyst. Something like Insight, Accel, GA, Bessemer, etc. That will give you immediate exposure and you will have broken in right away. Of course, you give up optionality with that, so that's a trade off. These other paths aren't guaranteed to get you into VC, so if you absolutely want to do it, might as well try to break in as soon as possible.
The best way to get a job in venture is to do the job for free until someone invites you to take a role doing it for them.
I'll excerpt this from a comment I made last year.
Your path here relies on developing both a network and a reputation. That takes time. Good news for you is that you're early in school, so you have years of runway. You also have a .edu email address, and I cannot stress emphatically enough how much of an advantage that is. People love helping students. People are also not suspicious when a student reaches out to them. This goes away when you graduate.
Spend your first year simply talking to founders and employees at startups. Tell them that you're interested in absorbing whatever they're willing to share and just want to learn by being helpful. Become a force multiplier for them. Do portfolio support for free: help them refine job descriptions, trawl LinkedIn for strong candidates for the roles they have open in Greenhouse or Lever, send them snippets of great books or podcasts discussing a topic relevant to one of the things they're tackling (partnerships strategy, scaling a distributed company, fundraising from corporate VCs, whatever) ...
All this will begin to make you familiar with the problem set startups face. This is valuable because it will immediately show up in any conversation you have with anyone in the space. It's also valuable because you will with time learn to discern which founders are strongest, as in better equipped to perform against that problem set. This is really the thing that matters most as an investor.
Separately, if you are intentional to focus on one or a couple area(s) to dedicate your time to, you will begin to develop an understanding (and eventually, thesis) on those specific spaces.
Together, this will generate a valuable network and reputation. You'll know a bunch of people working on cool companies, and those people will always be talking about their company or other companies they are a fan of (whose product they use and love, or the founder is a friend of theirs, or they're in the portfolio of the same fund). Those people will know you, so any time you decide to say "Well hey, I'd love to talk to X", they're happy to make it happen.
With three or four years of this, you'll invariably have met a variety of people on the investor side of the table. You will have many natural opportunities where people either suggest you intern for someone they know or with them. By the time you're close to graduation, not only should you have a very well-honed idea of what type of place you'd like to work, but also great visibility on multiple firms that fit that vision as well as good connectivity to them.
Good luck.
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