Frustrated - Landing a VC Role..

It's been a little frustrating but I'll keep trying. Went to a state school for engineering, did IB post-grad (JPM/Citi/BoA/GS) in a sector I didn't want to continue in. Was able to land a MM PE role in a tier 3 city on the West Coast focusing on somewhat interesting stuff but not getting much exposure and generally not enjoying being here.

Been wanting to move to NY and do VC for the past couple years but always a challenge selling my background. I'm now heavily looking into VC and seems like everyone comes from Harvard, Yale, Stanford, etc. with solid startup experience or a GS/MS/etc. TMT or Consumer to a strong VC shop.

Obviously I don't have that background, but what's discouraging is that I've reached out to 10+ people in the past 2 weeks and none have responded (LinkedIn and email). I just want some guidance on what I can do to land a VC role. Are their calendars that packed? Or people in VC are so occupied with founder/VC meetings that they can't connect for 30 mins? I'm not expecting anything, just curious to know so I can try and fix my approach / ask.

I'm aware that writing, blogging, Twitter, LinkedIn, etc. all matters when it comes to selling yourself (I guess?) to a VC, but how you even let them know if they're not responding to your emails? How to make them aware of your network, connections, sourcing abilities?

Any help or advice is greatly appreciated. 

 

In a similar boat. Also sent about 20+ cold emails in the past two weeks or so, only 1 replied. Response rate was at least 50% back in Jan-23 and Dec-22. Are VCs too busy doing portco meetings now putting out dumpster fire?

 

Most of our VC team comes from...

- serial entrepreneurs
- ex VC or CVC (Google Ventures, Breakthrough Ventures, ..)
- ex accelerator/incubator (YC, techstars, PnP, 500, Laci, ..)
- ex EIR (D10x et al) that shows operational excellence

The staff are matched to their relevant fields and future early-stage investments.

IB alone won't be enough, there are a lot of people knocking at our door.

And yes, it is maintenance mode only for us/many partners currently. Holding founders' hands. Founders who were confident until recently. And all of that was before the big SVB mess tonight.

 

Your best bet is to work for a startup, you don't have to be the founder. If you help raise a round and meet a few VCs, that's your way in.
If that doesn't materialize, check out a few CVCs. they have a lower barrier of entry. They can be very corporate, but it is better than nothing.

Even the best credentials in the world won't guarantee you a VC spot these days...

 
Most Helpful

Ignore title. Don't do CVC or accelerator, those aren't real jobs, especially the latter unless you're Paul Graham (sorry). Pick a sector you're interested in and sign up for Tegus. I should caveat that this approach only would work for non-consumer sectors. Read reports of the ~10 most successful Series B-D companies in that space. Or just raw dog the research yourself. Write 1-2 pages on each. Eventually you'll have a ton of research and you'll know who the decision makers are in that space. Then start hitting up those decision makers on LinkedIn. Offer them $50-100 to talk. Ask them about their jobs, their pain points, etc. Start looking into those because reliably someone will be solving them. Start finding those people on LinkedIn and talking to them. Write your own original research after talking to them and start putting it in front of the thought leaders in those spaces. Ask them if they are raising money. You then know a lot about this area. They will let you invest. I've done this process myself coming from PE. It feels like a full time job though so you could slow roll it over a year while working in PE, just expect to spend your weekends doing this. You can send a research paper to GPs and it doesn't matter if they read it or not. You follow up later saying "hey remember my research, well, I executed against that investment thesis and invested in (x), and now I have a new thesis on a new subvertical, I'm going to do that now. see ya!" and then do it again. Then you are just being a VC and if someone likes your ideas and investments, they will hire you. Bing, done. 

 

I come from the startup world and this works, have done it myself and seen many friends do it. VC is a game of high-agency hustlers. There's literally nothing stopping anyone from investing in startups: figure out which ones you want to back, get the founder to respect you enough to get allocation, then invest (either your own dollars or even better source from someone who has more cash and you can split the carry). Eventually you develop relationships with both founders and other investors enough to secure a job. 

EDIT: If you can become a good writer, start a blog (Substack or otherwise) and get on Twitter. I'm always surprised that if you write well on the internet, it gets spread everywhere and is a great catalyst for building relationships. 

 

How long did it take you from starting this approach to landing a VC gig (assuming you did)? Any tips on where to look for these startup and founders? I live in a 3rd tier city with no startup ecosystem so online is my only bet unfortunately..  

Would also like to know more of your background - you think coming from a startup world there's more advantage vs. IB/PE? I have a really good analytical/data analysis foundation and decent operations experience as well working with our portcos. At the end, maybe just being at a startup carries more weight for VC regardless, idk.

 

Oh yeah this is a great point, to be fair I typically offer it as a $50-$100 donation to a charity of their choice which they tend to appreciate, as opposed to cash to them. That is probably an important distinction. For the most part though a lot of the people that you do end up talking to are basically GLG experts; a lot of them I send my research as a courtesy when I'm done and never talk to again. I'm sure a couple I will need to talk to later but doing the donation on their behalf works wonders.

 

Well damn.. this is very helpful! A few questions.

1. Why does this only work for non-consumer sectors? What about e.g. 'Internet-consumer'? 

2. How to you "pick a sector"? What I mean is that how did you stay focused in picking a sector and not getting caught up in the "what's the next big thing/sector". Obviously we all have different interest, but do you think it's viable to put in so much effort in learning about a sector that barely has any growth the next 10 years? How did you align that sector with VC firms that focus on that specific sector?

3. How well were you able to monetize this work in getting in front of VC's? Not sure if you're wanting to do VC yourself or join a firm but were you successful in doing so if yes?

Thank you again and awesome work!

 

Do NOT offer an investor $50-$100 to talk. That’s literally insulting. Please appeal to any side but their financial side- especially with such a  paltry offer. It’s demeaning to you and the VC investor. 

Like the unadjusted- only with a little bit extra.
 

VC is incredibly hard to get as a junior. I wouldn’t take it personal - also be careful going this route. This isn’t like  hedge fund where you can be a star right away - VCs want someone with a great Rolodex and tons of operational experience. 

 

What industry or focus area are you interested in? I know climate tech VCs that are hiring. Also, generally - VCs hire when they raise new funds + fundraising has slowed through Q4 22/Q1 23. Hiring is almost exclusively network driven. If you can’t connect at top level, try with more junior investment team members - in small firms, they have more pull than you think.

 

Why exactly do you want to go into VC? Read an article the other day from Bloomberg that the recent junior hires at VCs are hating it and feel duped because they aren’t doing glamorous work and just sourcing and doing internal sector research. VCs very slow to write checks which I think is a good thing for their LPs but is a farcry from what it was. Every investment they make is under scrutiny. If their fund didnt distribute any capital to LPs in the greatest exit environment probably ever, LPs are pulling out of follow-ons.

VC is not what it was this past decade and a lot of funds will not be able to raise their next one, tread very carefully. The low tide is exposing who is swimmig naked. The space is going to consolidate. Don’t get desperate and throw yourself at the first firm who shows interest. But good luck to you and I hope you find what you’re looking for. Caveat Emptor.

 

I agree with everything you've said here, 100%. I want to get into VC because I love the relationship/networking aspect of the business and eventually want to start my own fund (venture or early-stage growth). I see sourcing and networking as an asset, not a burden. If anything, churning out excels and doing irrelevant modeling is something I want less of.. Yes, I wouldn't want to join a ship that's drowning, but I want to at least get my foot in the door because I know I'm capable of jumping to somewhere more stable and disciplined. 

 

Pretty sure with SVB failure today, VC jobs are not going to get any easier....Capital in that ecosystem probably tightens up even more. These guys don't give a shit about networking with inexperienced people right now, real blood on the streets. My buddy was at a VC Climate Tech retreat in SF today and said people were panicking to pull money out.

 

not sure why the MS is because this is accurate.

Beside the SVB bankruptcy, the start-up scene is drying up. People are realizing that many of those start-up ideas aren't as revolutionary as they seem, so there's less initiative to start new businesses and thus less need for VC deploying capital, and the growth will be a lot less because less optimism w/ startups --> fewer investments in startups --> slower growth --> lower valuations than before. With the current recession, people are tightening their budgets so for a minimum of 1 year, I wouldn't touch VC. My only question is why we aren't seeing layoffs in VC

I think that really smart people aren't going into VC instead they're anticipating the next wave/trend. VC in 2020 was what PE/LBOs were in the 80s. More competition, fewer opportunities, and less room for innovation will distance the future youth from this path (in the same way as w/ IB/PE now).

 

Will say that I would hold off on trying to reach out to VC's right now. SVB is massive and I know that at its been a fire drill for the last 48 hours for most firms. In terms of breaking in you can always go the MBA route (although even that isn't a silver bullet) or get operational experience at a startup (plenty of great VC's that focus on operational risk that are looking for someone that can help build a company)

Best of luck here, VC is a cool space

 

MBA -> VC doesn’t work unless you’re at Harvard or Stanford.

Having an actual view and opinion on an industry is extremely important for VC. The banker mindset is “company is big enough and somebody, somewhere will buy it” which is basically useless in VC (no offense to IB - bankers do really valuable work, just not this specific type of work). A lot of VCs will publish research on their website: Redpoint, a16z, Base10: pick an article/ trend and ask yourself “if this is true, who will win? Who will lose”. Being able to explain why FinTech infrastructure software is a better bet than FinTech Applications/neobanks is an example of a stance you could take.

CVC is a good way to break in, assuming your firm actually does deals. Salesforce Ventures is well known and just raised a $250M fund specifically for AI. Workday just raised a $250M fund. Idk if Slack funs is still around. If you’re really interested in a specific sector, FinTech as an example, grinding at PayPal or Visa Ventures would be an interesting story.

I don’t see a lot of people going straight into VC from an IB group that isn’t Qatalyst/MS-Menlo/GS-TMT

Also don’t reach out to people above the associate level rn if anyone: SVB crash is causing obvious problems.

 

Also +1 on who said don’t go to an accelerator. Unless you’re at YC or MAYBE techstars/500 startups, you’re gonna be working with a lot of not-that-great startups doing random tasks, not financial analysis / building any investments theses. It could theoretically be helpful if you want to do super early stage seed/first money in (FMI) investing. And the engineering degree does make that a possibility for you, but FMI investing is so different from typical Series A-C investing (what people usually think of when they say VC)

 

I have been looking primarily at doing seed-stage / very early stage VC. I haven’t had much luck finding roles so far but have gotten some traction with a few of these incubators. It sounds like this route wouldn’t be bad for someone in my position, is there anything I should be doing / thinking about if I am more focused on this part of the VC universe as a junior? Thanks!

 

All of this is super helpful. Seems like you're in VC? Interested to hear your path. I've noticed this as well that having an actual view or opinion on an industry is extremely important for VC. I do get confused at times trying to figure out what I should read about and form an opinion on largely due to so many different industries/sub-industries, etc. Gets even more difficult when you narrow some of that down and there're hardly any good/sizable VCs covering that space.. (not talking about FinTech but referring to some of the other industry and niches). 

Do you have an opinion on Growth Equity vs. VC? It seems like growth equity shops like FTV, Lead Edge, Silversmith might fit my profile better coming from IB and buyout/growth equity. They also seem more disciplined and calculated vs. VC. Again, I don't know much and not sure how they are in terms of culture, workflow, etc. 

 

Why is the VC community so obsessed with the HBS/GSB brand name, more so than other industries even within finance? Are there many tangible benefits or is it just an elaborate culture of fawning over prestige?

 

A really good startup have a choice who they want to deal with. A high-profile roster of venture partners may:

- be able to leverage their alumni network for the job. This is very important for a VC
- attract random emails/pitches from high-end startups based on their education/profile/who they have worked with before
- present their VC folks themselves as a "brand" - they can use the colleges, funds and other companies they worked at to their advantage

The best startups really have to be attracted as well, their round fills up quickly. They don't have to raise the round with you, but they may.
A top tier education (and, of course, experience) gives a positive reputation to a VC. A VC is nothing without its people.

 

I actually recorded my response rate from VCs in a spreadsheet when I was trying to grow my network. My hit rate varied between responses 30-40% of the time via email. I would shoot them a first email, and if I did not get a response, I would send a follow-up. Maybe post an example of your email and others could give some feedback. 

Also, I'm not super convinced Twitter, blogging, or Linkedin is all that worth it for entering VC. I'm not saying that it isn't useful, but if you are trying to land a job, I think there are much better uses of time. If you want to do those things focus on them after getting a job.

 

Appreciate the response. I'd post an example but it's very similar to what most people are doing I assume; highlighting something in common, if none, then I'd talk about an article they wrote or something similar, then go into why I'm looking to pivot and then my brief background.

30-40% hit rate is pretty good! Do you mind sharing tips or your template via DM?

I'm also on the fence regarding twitter, blogging, etc. I do think it's a bit helpful overall. From talking to people, I think the most helpful is doing some work first (research on companies or industry) and send that to VC's instead of asking to learn more about their role and how I want to get into VC.

 

Are you pitching companies in your outreach?

VC's are drowned in email and Linkedin messages and their core differentiator is deal flow. If you're not coming in offering that from day 1 you need to bring ideas to the table and back them up with backchannels and/or any data you can salvage.

1. Figure out a broad industry and 2-3 specific subverticals you're interested in, the more technical/esoteric the better.

2. Dig through market maps and break down the key patterns and trends in those subverticals

3. Pick a company that hasn't raised in the last year and write up a 1 pager on it - doesn't have to be fancy but do your research

4. Find out who (which partner) would focus on that area at the top firms you're interested in - make sure it's the appropriate stage

5. Reach out to them and tell them you're trying to better understand this space, ask if they would be willing to give you feedback on this short write up.

6. Continue doing this consistently. Once a month. Do this and ship it to all those people. Go to networking events, share your ideas, talk to founders, keep adding new value to each outreach message.

Investing is all about getting reps in. If you start that now you'll show that you're willing to put in the work to improve and the feedback you'll get is way more actionable that generic advice on how to "break into VC" -- Like this post. 

Note -- I'm 3+ years out of the (later stage) VC game and left to start a company, but this is what I had to do to break in from a pure finance background that was, frankly, way less impressive than yours.

 

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