Does public equities + Co-Founder make for an attractive profile?
I’ve worked as an investor in public equities for the last three years. I’ve realized that I’m far more interested in actually working with early stage companies, or even founding my own. With some friends I am about to launch an AI product where I’m a cofounder focused on the business side of things.
Ideally the startup works out but I’m wondering if my background lends itself to VC if I have to pivot down the road. I’m enthusiastic about VC so it wouldn’t just be a Plan B but obviously contingent on whether or not my own business succeeds or fails.
Your background in public equities combined with co-founding an AI startup can indeed make for an attractive profile for venture capital (VC), especially if you position yourself strategically. Here's why:
Public Equities Experience:
While VC typically values private market experience, your public equities background demonstrates strong analytical skills, market understanding, and investment acumen. These are transferable to evaluating startups, especially in later-stage VC or growth equity roles.
Co-Founder Experience:
Being a co-founder of an AI startup adds significant value to your profile. VCs often favor individuals with entrepreneurial experience, as it shows you understand the challenges founders face and can empathize with them. If your startup gains traction, even modestly, it will further validate your ability to execute and build.
AI Focus:
AI is a hot sector in VC, and your involvement in launching an AI product positions you well to target firms with a focus on this space. Your hands-on experience in the sector could make you a valuable asset to VC firms looking for domain expertise.
Transition to VC:
Based on insights from WSO threads, transitioning to VC often depends on your ability to network, articulate your value, and demonstrate a strong understanding of the startup ecosystem. Your co-founder role will help you build credibility in this regard. Additionally, developing a niche (e.g., AI-focused investments) can make you stand out.
Plan B Consideration:
If your startup doesn't succeed, your combined experience in public equities and as a co-founder will still make you a compelling candidate for VC roles. Many VCs value entrepreneurial failure as a learning experience, provided you can articulate the lessons learned and how they apply to investing.
To strengthen your profile further: - Build a network within the VC community by attending events, connecting with investors, and engaging with startup founders. - Develop a track record of identifying promising startups or sectors, even informally, to showcase your investment thesis. - Consider writing investment memos or thought pieces on AI and startups to demonstrate your expertise.
Your enthusiasm for VC, coupled with your unique background, positions you well for a potential pivot into the field.
Sources: VC startup idea - PE or VC interest? Are these numbers viable?, Breakdown of Post-IB Exit Opportunities, Q&A: Principal at Early-Stage VC Fund, Confused Scientist: Where do I fit in? Strategy Consulting, Venture Capital, et al., Private Equity vs. Venture Capital in 2018
Bump
Not really. Public equity investing might be more helpful at the growth stage but that's even a stretch given that there's a better fit with PE trained individuals (deal orientation vs. market).
I would not recommend starting a company in order to get into VC. If you start a company, you should be 100% committed to making it successful. If you're trying to make a compelling profile for VC you're better off joining a fast growing start up and gain responsibility, help them manage their fundraise, and drive growth.
Remember, VC is about who you know and given you probably have limited contacts in the start up ecosytem today, building your network as an operator would be the "path of least resistance". That said, there's no easy path so you need to get creative.
Your experience as a startup co-founder and in public stocks may be a good fit for venture capital, particularly if you have a strong operational perspective.
You’re looking it the wrong way.
No one ever ends up as a Venture Capitalist as a goal. Those that do they’re probably doing private market arbitrage (which is highly unethical in many cases) or are a chunk of meat to throw at a problem (nowadays you have AI so that’s not viable anymore).
It’s always in pursuit of some obsession you realize you have no choice but to start investing. Venture Capitalistd are entrepreneurs themselves. And entrepreneurs don’t consider alternatives or Plan Bs.
They define a single goal and then find multiple ways to achieve the same goal. They’re crazy because it’s like flipping a coin and learning how to influence the wind and aerodynamics while the coin is mid-air im an attempt to influence the result of the coin flip.
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