~$100mm fund analyst offer straight from undergrad- to take or not?

I am fortunate enough to have the rare opportunity to join a fund as an analyst directly from undergrad. The role will include traditional investment related: financial modeling (cap table, 3 statements, valuation), investors communication (decks), market analysis, due diligence.

VC is what I want to do for sure long-term. My concern is (like any other wso monkeys) my exit opps. I just don't know if top MBAs and other large VCs will take a kid who went into VC from undergrad as opposed to people who did a stint at MBB or BB stint.

Anybody who does recruiting for MBA or VCs or anyone in the VC industry- I'd love to get your advice.


Comments (9)

Nov 24, 2015 - 12:15pm

What stages are they investing?

I did this personally out of undergrad. I would not recommend this.

The only thing I think that could make this an interesting idea for you is the fact you say you are 100% sure you want to do VC long term. I realized 1 year into a VC firm I did not like early stage and it really messed me over. If you are 100% sure, not 99% but 100% sure then maybe I'd recommend this.

"If you want to succeed in this life, you need to understand that duty comes before rights and that responsibility precedes opportunity."
Nov 29, 2015 - 2:50pm

Thanks for the reply. Great to get this perspective.
1) Any particular reasons why you did not like early-stage investing?

2) How did you manage your situation after? I see that you are in growth equity now. From my research, that's a harder jump than most people think from an early-stage fund due to differences in technical due diligence.

3) Why would you not recommend this out of undergrad?

4) What was your general background? (Undergrad school etc)

Would love to get additional perspectives from you.

Best Response
Nov 25, 2015 - 8:27am

If you're sure that VC is long-term career interest, then you absolutely need to take it.

VCs like to hire people from other VCs, successful entrepreneurs who have exited businesses (and thus gained liquidity, invaluable knowledge, and a robust network of investors at other firms + quality employees + other industry players), senior operators at late-stage companies who have specific skills and networks, and (more rarely) bankers, consultants, or lawyers who have compelling experience in a particular niche that makes them an uncommon commodity.

Your other alternative is to do corpfin, try your heart out to get into banking, try to recruit for a good investing position (PE or VC, presumably), try to get into a great MBA program, then look for post-MBA VC roles.

That's way more circuitous, indirect, and difficult of a path than the VC analyst role. Who's to say you successfully navigate each of those hurdles along that path? Why wouldn't you get the exact experience in the exact role that matches your stated interest?

This should be particularly easy given that you have been through two internships there. You know the work, the team, and already have rapport/credibility/reputation that makes things easy and comfortable day-to-day.

If that fund is not one you want to stay at forever, then your goal should simply be to build the best network possible in venture. Figure out whether you want to stay in Canada (really small community up there, both on the GP and LP side) or be in the States. If the U.S., then figure out if the Valley or NYC is more attractive. Then make sure you are getting to know associates and principals at as many funds as possible that are in the stage and/or industry you're interested in.

It basically means you need to be functioning as an associate, not just an analyst. This is actually an important trait to succeed at any job. Make sure that you're executing flawlessly on the direct responsibilities of your role, but begin flexing on the responsibilities of the role senior to you. That's how banking analysts get offered an associate promote. That's how VPs get promoted to MD; they prove they can do what an MD does. It's not about performing 100% the duties of the VP, otherwise you're going to be stuck being the perfect VP forever. That's how it's decided whether PE associates get offered a partner-track position or pushed out the door for an MBA and told 'goodbye.'

Associates have to manage dealflow, and a huge part of that is relationships within venture (as opposed to entrepreneurs). If you want to guarantee that you have exit opps within VC, make sure you're a valuable VC. This means you should blog about your learnings (and do it well), develop a presence on social media (the VC echo chamber on Twitter can be deafening, but you can cultivate a voice over time), build relationships by being in the chop at events/panels/seminars/conferences, and get to know people.

If you're doing that right, you won't need an MBA because your firm will want to promote you and other firms will want to hire you. If you do choose to join another firm, it won't be a hard switch.

Interviewing in VC is very different from PE; most of the time there are internal discussions about the type of person they might like to add (usually based around the seniority, i.e. "We really need a senior face with fantastic BD knowledge, and ideally someone who comes from healthcare, but we just promoted Tim from Principal to Partner six months ago, so I don't really know that we need another Partner...") and someone on the team ends up going "Hey, I know a guy who X" and they bring him in, have a few conversations, and extend paperwork. There's rarely a sense of timing. Firms like Bain who have a formal review and intake period are uncommon (and they tend to be the large, later-stage shops managing giant funds with big teams and a bureaucratic infrastructure).

Long story short, it seems really asinine to not take a job in VC if you want to be in VC. The only reason it wouldn't make sense is if you didn't have conviction you wanted to be in VC long-term. Exits beyond the industry from small VC firms are definitely limited, and even more so at the most junior level (analyst vs. associate).

Good luck.

I am permanently behind on PMs, it's not personal.

  • 4
Nov 29, 2015 - 2:57pm

This is fantastic advice. Thank you.

Would you say your exit opps. as a junior level VC becomes even more limited if your fund has a specific focus? (e.g., pharma, biomed, clean tech, sustainable tech or some sort of niche)

Or will lateral fund moves be possible even with this in consideration

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