Those who did IB > VC, can you please explain your path a little?
Hey guys current 1st year IB analyst here attempting to recruit for VC but kind of lost...
My firm is very respected in NYC and I get blown up with headhunters 24/7, but they are always PE opportunities. I ask for VC and literally 100% of them (35+ headhunters) have said they have nothing for VC but will keep in touch.
If headhunters aren't the way to break in, I assume networking. However, it is a little discouraging seeing most are Yale Stanford Harvard Penn. I will blast out e-mails to network but assume my hit rate will be extremely extremely low (as expected), and even if I have a great convo, I doubt I would get referred.
If you guys were in my shoes, what would you prioritize? Thank you so much guys. Much appreciated.
See my previous post here. Happy to answer follow ups. As it stands right now, there are generally no "sure shot" funnels from IB to VC unless you are GS TMT, MS Tech, or Qatalyst. The "networking" in VC is not the same as PE where you have a sniff-test conversation to make sure you can walk and chew gum and eat spreadsheet shit for two years. You need to demonstrate some ability to drive value in VC which is generally not what you would be able to do right away with a banking skillset. The banking skillset gets you through financial diligence work, but that is sparse for earlier stage companies. There is much more about founder, product, and market analysis than financial analysis. Outside of diligence, there is also sourcing and value creation strategies, which banking does not prepare you much for. If you want to rely on your transactional skillset, you could find growth stage firms up the chain that will be much more focused on traditional business diligence; however, the growth markets are absolutely obliterated right now, so that would be a bang-head-against-the-wall-for-a-year type endeavor.
Thank you so much for the comment and all the information. Truly, truly much appreciated.
Doing all the research on Tegus sounds really interesting and I 100% would be happy to do that given I am really passionate about the space I am targeting (Software). So my quick follow-up question is then that I assume I would do that "route" and trying to get attention of big players on linkedin etc instead of just raw applying to the small few VC postings out there? And I assume same goes for headhunters.
How would I even get the chance to talk to these people / make an impression? Seems like they wouldn't give time of day to speak to me just some regular 23 year old banking analyst with no VC / investing experience.
Talk to which people? If you are talking about talking to industry participants, you can just say you are interested in learning more about what they do. I would expect a 10-20% response rate. Then you develop your thesis, and find the people who are solving those problems. When you put an informed perspective about "hey I see what you see, want to discuss?" people will take the call. Then you have a full thesis, and you start emailing that to VCs, and show that you can source against it. I would expect maybe a 20% response rate there, too. The ones who appreciate what you've done will get in touch.
Was this the process you followed exactly? You said you've gone through this, so candidly, what would you say are the points in which you were least productive / minimal incremental value-add. Currently a first year in a top tech group attempting this process you outlined, but have really struggled to make time amidst sweaty hours.
It's a great question, if you can form a credible thesis from work you're doing on the job, then you can skip the step of getting up to speed on an industry. For example, if you are doing some sort of enterprise software and have a good idea for a workflow app, just skip the Tegus step. You'll still want to bounce your idea off of people in the industry because at first glance your idea is always shit (happened to me) and you need to refine it before you put it in front of entrepreneurs (won't be a good look if you show them shit).
I just spent half an hour writing questions and inquiries relating to your work as a whole and I fucking ctrl-w instead of ctrl-3 to switch to your previous post. I'll try to rewrite it.
First, I am a college student studying economics. At this age, how does one get involved in the practice of refining the less quantifiable aspects of VC? How could I best learn and teach myself the relatively more abstract elements of this work, for example the founder, product, and market analysis, and the deal sourcing and value creation strategies? I would assume it is highly dependent on interpersonal interactions and charisma - which is brilliant for me - more so than the technical work that defines work in IB and in college. Which is utter anathema to my soul.
Second, Is there a specific field within VC (for example early stage companies or something like what deal sourcing is to private equity) where one could focus these aspects and skills, with minimal technical work and a great focus on self-initiative to spurn oneself towards goals and metrics that he defines himself? Perhaps more coherently, what are the subfields of VC which one would be most suited to with a more sales-like or entrepreneurial personality?
It all seems to me (if you forgive the poetic exaggeration to emphasize the point) a concept of an almost wild-west world of minimal data, rather where artistic and genius intuition takes its place, where big personalities and swashbuckling capitalists adventure and dare, charting their own course and are totally and supremely dependent on their own initiative and self-determination in the absence of conventions and externally defined paths (to the effect of mainstream finance) in order to triumph. I would assume this is a very entrepreneurial path, with much more akin to sales than more traditional banking. Such notions are intoxicating with excitement to my very soul.
I excel where I may take the abstract qualities of my ambition and waypath in my own fashion towards them. Such would oblige circumstances which could be described as essentially a blank canvas. And all the colors I could want. In this I mean, an environment where I may essentially be beholden to myself to take advantage of opportunities that I perceive in the business world of venture capitalism. Whereas a standard banker is given a hierarchy of command, skillset, task and goal as well as a system by which to accomplish it, I would thrive where it remains to me to source deals, to speak to founders, to envision potentials of companies within my own imagination informed by my unique perceptions of their companies and intuitive insights into their personalities, and then take the risk of action against it! And it all falls to me to take the initiative in the fashion that most speaks to the interest of my soul. To roll the dice with Fate, fearless and bold, everything to win, everything to lose! In concise accuracy, the very essence of the phrase, seize the day!
I adore speaking at length with others and would feed off the passion and energy that I would be immersed in, in such a world of hustlers and entrepreneurs. I'm full of electricity and my blood is on fire when I think of such a future. Fired up so, I wish to hurl myself headlong into the fray and soar to glory here or go down in magnificent flames.
My final question is this. In your experience, what are the traits, nuances and qualities - ineffable and abstract to conceptualize as they may be - that tell you that someone is a great Venture Capitalist? Or above and beyond others, truly a prodigy in this field? That they are destined to excel and conquer, that they truly are/going to be a complete dynamo in venture capitalism, genius even?
To win a Nobel Prize in literature it is said that whilst also being an excellent writer, one must have a spark of something greater, something sublime in the self.
Do you believe the best agents in this field have something similar, that there is something, a talent or gift perhaps, that they are born with? Can you tell when someone has it? Could anyone become the best venture capitalist in the world, or is such a man born with that divine spark? And how would such a spark, such a talent, be quantified, identified, and ultimately personified?
Thank you for reading, if you did at all. I hope this wasn't too incoherent. I have startling visions and supreme ambition in this life, and at 19 years old I am now beginning to conceptualize and vulcanize the structures that I can use to bring to bear upon the great sights, the cathexis of my ambition, to effect this nebulous vision. What you men do is this admirable work. I desire merely to humbly learn as much as possible from you and your commanipularis - so to speak. Thank you again.
Tegus costs like $20k? I can’t really find any pricing for a one-off account. What did you do? My bank also doesn’t have a subscription to it
One realistic path that doesn't require a ton of researching, building an online presence or relentless networking is to join a start-up as an operator (Chief of Staff / Product Manager > Strategic Finance / Strategy > BD / Sales) and spend 1-3 years there.
Ideally at a place that hasn't raised a ton of money and successfully ride it to a series C+. Even better if you could find a bootstrapped gem that has the potential of becoming an unicorn, like early days of Zoho, Atlassian, Adyen, Checkout.com, etc.
Seen this work out before but don't think it's well documented how often this doesn't work out given the failure rate of early-stage startups.
There is nothing more humbling than joining an "elite" team at the ground up and getting your asses handed to you by the market.
Agreed. I am just pointing out a viable alternative for the young minds who are probably more analytical but not yet ultra salesy or savvy enough about cold emailing/networking. Tbh, not everyone is ready for the whole networking grind.
Bay Area has quite a few growth/late stage VC places. That said, recognize most are going to be sourcing heavy.
specific names (not Bay Area based necessarily) Norwest venture partners, insight, general Atlantic are examples of places that kinda fill that bridge.
Are you getting a similar amount from head hunters for hf?
Granted, this was nearly 20 years ago, but I did get 2 VC offers when leaving my analyst stint at a BB in NY.
I ultimately decided to stay in banking until I later founded a company. I found a couple of options through headhunters, but both offers were at places where 2 of my MDs called and basically said are you hiring, if so I have someone for you.
why did you decide to stay in banking vs going to PE/VC? curious on why some bankers decide not to go
It was mostly a location preference. I was never someone who felt the need to escape banking and enjoyed the work. My goal all along was to ultimately found a business.
APAE has a great post on this that you can find in his comment history.
APAE. I couldn’t find it :(
It's very difficult. I know a Stanford-> MS/GS Tech who explained to me how it brutal it was for them to find a way in. Another in a similar group mentioned that top VCs will not recruit directly. I think networking, developing a thesis on a specific industry, and following up is your best bet. Try to find a firm that just closed their fund and is in the process of raising.
I successfully went from Software M&A IB to VC. I worked at a boutique with a similar thesis to Q, obviously didn't work deals quite that size but was rapidly growing. I however grew up in the Bay Area, and my parents were friends with a few Partners at VCs and had them vouch for me and it was actually pretty simple to get in. It's not clear cut like PE recruiting, it's heavily relationship based and you need to really demonstrate interest and an understanding of the space (B2B enterprise in my case). My IB firm actually sent more people to VC than PE now that I think about it, but our firm was pretty unique in that sense.
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