A week in the life of a VC intern/VC Intern AMA

SmokeyTheBear's picture
Rank: Orangutan | 264

Hey VC-aspiring monkeys,

Originally, my plan was to do a week by week take on the VC world as an intern, similar to moneymogul's IB one - however, both my internship and the VC world is very different from IB, so it wasn't feasible to do that way. So instead, I've documented my first week and I'm happy to have this be more of an AMA type of thing for VC internships/people looking to start a company/anyone interested in the VC world. There isn't a typical week, and I also work with our portfolio companies a lot, so feel free to ask about various startup jobs as well.

I can say that this won't be as well written as moneymogul's, but bear with me! Hopefully it gives you a sense of what this industry is all about.

Background about the firm: European fund. Small - 100mm AUM in the fund. Over 25 portfolio companies currently - Seed stage investments primarily, with some Series A & B rounds.

Background for me: I've mainly done off-cycle internships, first one was as a Business Analyst at F500 Financial Services, second was data analyst (marketing & finance) at top tech firm (think Apple, Google, Amazon, Microsoft), and now VC firm. European background, but American university (top 50 - semi-target-ish)

Names have been changed to protect the intern and yadda yadda.

Monday
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There's always a slight skittishness when you're starting at a new place (particularly in a new city), but I strolled up at 8:50 to be nice and early. A little too early apparently, as my associate, Emily, hadn't arrived yet. I'd only spoken to her on the phone briefly, as my main interview process was with the firm's recruitment/talent seeker and then one of the partners. I get buzzed in by someone working on one of the portfolio company's and wait in the reception area. The place is all open plan and houses around 8 startup companies (most of which are portfolio companies), as well as our small VC team. At around 9:05 or so, Emily shows up and we chat for a bit and shows me to my space.

This is where VC and small teams are very much different from my prior experience at large companies - it's just a space on an open plan table next to some other startups. I had opted to go business casual, but on the formal side, and I'm glad I did. A suit would have been very out of place here - the startups are wearing t-shirts and jeans, and the partners are wearing business casual.

She asks if I want to grab a second screen, but I say I'm fine working off my laptop for now. She goes and puts her things away and I wait patiently, surveying the buzz that is slowly ramping up throughout the floor. She comes back moments later and gives me a tour. Around 70-80 people are in and out of the floor basically, and the VC team is in the corner where I'm sitting.

The founders show up, which is quite nerve-wracking for an intern to be meeting (they are all very successful in the industry). Very friendly and ask me a few questions, but then get back on with their day. Emily informs me that they're going to go into their weekly meeting to discuss whatever is coming up and any deals that have come in. She says it can take up to 3 hours at a time - so they do it over lunch usually. Emily has to go and get some work done that the partners need, so she leaves me explore a bit and just kind of hang out.

There's no intranet to explore, so I'm a little bored, but Emily comes over and asks if I want to get lunch at some point, I accept and say I'll meet her at 12 near her desk. After perusing our website and various companies, I head over to Emily's and we head out to grab lunch. We walk down a road that has a bunch of different food options and decide on something 'local'. We chat about our backgrounds and what she thinks of the firm - she's only been there a year. I inquire a little more about my position and what's expected, and then we head back to the office - sufficiently full and wishing I could lie down and nap a little.

I head back to my desk, where I don't have much to do for a while, but Emily comes over and asks me to effectively do a SWOT analysis on all 25+ of our portfolio company. I dive right in, never having done one before, and discover all that I can about the companies. Little did I know that this would take me two full days to complete.

5:15pm rolls by and I decide to call it a day, which makes me feel a little bad since everyone is still hard at work (most arrive at 10:30/11 and stay until 6 or 7), but I have a bus to catch and not that much urgent work to do.

Tuesday
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Wake up at around 7am to grab an 8am bus. Quick breakfast and shower and then I'm out the door. It's a pretty cold morning, but not too bad. Sit on the bus and oof, screaming kids of course. I finally get off and I'm in the office at 8:45, well ahead of anyone in the fund, but some of our portfolio companies are already in the coworking space working. (And people say bankers work a lot...). Get set up and grab a coffee when Emily walks in and says hello. We chat a little and I head back towards my desk to continue working. Emily says she'll come by and show me the dealflow system when she has a minute.

Emily comes by and invites me to our deal flow. It's not very sophisticated - pretty much Excel and Google Docs... I'm a little taken aback, but I soon learn that the industry as a whole is pretty archaic (ironically) when it comes to managing their portfolios. The main premise of how our deal flow (and most early stage firms') is that there are a few ways that deals can come in:

  • Referrals (This is THE single best way to get funded or at least your name out there - the majority of our investments are through referrals. As in 65% of all investments we made last year were through referrals)
  • Cold call - We keep one public email address and it gets hit with business plans like no other. Another common form is people sending in paper decks (which is a major no no in our view. Yeah, you may be trying to be different, but you just wasted $150 and 5 trees to show me your high-tech company... Additionally, I now have to MANUALLY scan the files into our dropbox folder for record...)
  • Either people we seek out or meet at events. Events are the lifeblood of VCs. I am not kidding when I say that networking is absolutely everything in the VC community. It is such a small, tight knit community that everyone knows someone who knows someone, and things travel very quickly. Do not burn any bridges if you want to work in the VC world. Sometimes, you can, but for the most part - it gets around. Really quickly.

Emily asks me to see if I have any recommendations about the flow. I tell her that I'll get back to her after I've explored it some more. My first step is to fix some of the messier formulas in our Google Doc that cause it to take 657.8 years to load.

Emily leaves and I continue to work on the SWOT analysis yesterday. It's effectively just to see my style as well as see if I can identify any weaknesses that they may not have thought about within their portfolio companies. I get introduced to two CEOs/Co-founders of various companies, which is par for the course here, but pretty exciting for an undergrad student... I notice that the average age of our founders & startup employees is mid to late 20s, with some younger and some older. I chat with one of the partners for a bit about my background (I didn't interview with all the partners, just our recruiter, associate, and one partner). As I sit near them, I get to see how they operate together and what their days are like. They're all former tech workers in some regard. Their days are spent mostly in meetings with current companies, potential companies, or other VCs - it's all about managing appearances. Unfortunately for startups, we'll often hear pitches from people that we don't have an interest in investing in just because they were referred by a friend in the industry (I think this is pretty par for the course, I'm afraid). I continue to work on my SWOT work and monitor deal flow before calling it a day at around 6pm after the partners have left.

Wednesday
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Still struggling to wake up early after having some time off and then a fairly relaxed course schedule this past semester, but I manage to drag myself into the office by 8:45 (despite having missed two buses...) [I don't know if I'm cut out for banking....] The office is pretty quiet in the mornings. My associate will get in at around 8:45-9, the first partner isn't in until close to 10/11 and most portfolio companies aren't around yet. I would say around 20/70 people are in the office before 10am.

Some more deal flow has come in from a company we'd previously passed on. They're raising a follow on round and want to know if we'd be interested in participating. My associate says that once we pass, that's pretty much it. Since we look early on at the idea and the team (very important in early stage)

I keep working on the analysis. This is my first time ever doing a SWOT analysis and it's taking a surprising amount of time. Just finding competitors is very time consuming (when you have 25+ portfolio companies, they tend to add up!). I keep working through and the office begins to begin buzzing at around 10:30 and actually gets pretty loud at around 11am. 2 partners still haven't come in, so I presume they're off in a meeting somewhere around the city. Some err...unusual... deal flow comes in. The first is a deck from a company that we passed on two years ago, but the entire model has changed, so we're potentially willing to look. Except they're looking for $1mm as their first round, which is very optimistic and well above where we usually invest (our average is ~250k for 15-20%). Another decks comes in with a line saying "potential to be the next Facebook". I cringe at that line. If you have to be the one to say that, then it is very unlikely...

One big difference that I notice between working at a partnership and firm like this versus working at a product focused company is that there aren't really deadlines or pushes to get things done by a specific day - everything happens more organically because there are no launches or need to increase revenue through constant selling of goods or services.

Thursday
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I get into the office before 8:30 (finally!) to get some work done, but get slightly distracted by general browsing and some of the deal flow. Another deal has come in that is similar to one of the businesses we're in. It has pretty good revenue and good growth figures (but not insanely optimistic). Not something we'll invest in, but always good to keep an eye on the sector.

My associate comes in at 9am so I get back to working on my analysis. Emily comes over and asks me about my day and plans for the weekend. She mentions some good bars to go to around the city. Two partners stroll in within 10 minutes of each other, so it must be a pretty busy day as they're in early.

I finish up my analysis at around 12:30 and get some lunch. Bring it back to my desk (par for the course here - and everywhere else I've worked). I browse through the deal flow a bit more. It's incredible how many pitches come through with major spelling and formatting issues. It ruins the point that you're trying to get across!

After handing in the analysis, I don't have much else to do. So I browse around and look at the usual sites (TechCrunch, VentureBeat, etc-) just to see what is going on. I head out a little after 5:30 as I don't have much else to do! Though it's the beginning, I'm working far less hours than I did at the tech firm last internship.

Friday
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Finally, Friday rolls around and my first week is over. I'm in at 8:45, and it's very, very quiet (more so than usual mornings), which is nice. A pitch deck has been referred to us and I take a look. It's a little ambitious.... They anticipate revenue growth from 200k to 62mm in 5 years..., as well as a 2000x return on profit... It is very well put together and has some backing, but still very ambitious. I continue to comb through the deal flow and see what is of interest.

A few things are interesting so I forward them along to my associate and see how she wants me to proceed. She asks me to reach out to them and see if they can send a one pager over. A one pager is effectively an executive summary of your business - a bit about your current financials and idea and team - just a teaser to get a VC interested.

10:30am rolls around and the office isn't buzzing too much, must be a bit of a lazy friday! I sift through more of the deals that have come in and organize them into the weekly spreadsheet for the partners to go through in their weekly catch up meeting at the beginning of next week. I'd love to be a fly on that wall. At this point in time, we're starting to spin up a new fund, so there is a lot of work to be done on bringing in LPs and organizing any documents and pitches as we work to raise capital.

I continue browsing around and looking more into the startup ecosystem when I get an invitation to one of our portfolio companies' party and their CEO now follows me on Twitter - which may seem slightly trivial, but it's a worlds away from university for me.

My afternoon is primarily spent talking about valuations with my associate, as well as learning more about capital tables (models we use to discuss and assess various rounds of funding that we're involved with and to see how our equity will change as we bring in new investors (since there is obviously dilution that occurs as you bring in additional rounds). It seems as if there are some issues with one of our companies who is currently raising a round. We're participating to ensure that we don't get too diluted (depending on the company, sometimes we'll participate, sometimes we won't, sometimes we'll put up a large amount of money to be a bigger investor ~ >2m). Partners have been discussing it all day and on and off the phone, but it seems as if there has finally been a resolution and all parties are satisfied.

I continue to look at more deals and Emily asks me to swing by to take a look at a deal she has seen and what my thoughts are on the product. I wasn't really into it and it didn't seem like it had a strong future. Additionally, pro-tip: please don't call yourself a disruptive innovation - let your product do the talking.

5:30pm rolls around and beer o'clock has begun for some of the portfolio companies - whilst the partners are about to jump on a board call to continue talks about the cap tables. I decide to take off as I don't have much else to do and want to be able to get out and explore a little! After having wrapped up my first week here, I do enjoy it. It is very, very different from working at any sort of company that sells something - the atmosphere is just very different, not bad different, just an adjustment for me.
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Apologies for how long the above was, but the tl;dr is "I'm a VC intern. This was a week in the life (sort of). AMA.

Anyways, with that "week in the life of a VC intern" done, feel free to ask me almost anything! I'll try to answer as quick as I can, but I won't always be able to immediately, so sorry I'm not sorry.

Comments (57)

Mar 20, 2014

Interesting take, thanks. A few questions to get it going:

- How did you get the internship? Through a posting, cold calling/emailing, network or?
- Could you elaborate a bit more on the interview process - did they ask for any 'unusual' things besides CV/CL, what did the questions focus on etc.?
- Do you have citizenship? If not, how do you go about Visa stuff when looking for internships/jobs after graduation?

Mar 20, 2014

Do you participate at all in the sourcing process or do you focus on analysis/evaluation of incoming pitches?

Mar 20, 2014
TheSanchize:

Interesting take, thanks. A few questions to get it going:

- How did you get the internship? Through a posting, cold calling/emailing, network or?

- Could you elaborate a bit more on the interview process - did they ask for any 'unusual' things besides CV/CL, what did the questions focus on etc.?

- Do you have citizenship? If not, how do you go about Visa stuff when looking for internships/jobs after graduation?

1) Cold emailing. I would say that networking is probably a lot easier, but I didn't have any connections in Europe (where I'm interning). I emailed and applied to over 30 different firms (banking to VC to PE, anything really related to tech). I ended up cold emailed the recruiter at the firm (included a nice cover letter focused on the firm & my resume); luckily I go to school where she was from so we had a connection and I got an interview. All it takes is one. I got one positive response. Then one interview. Then one offer. That's all it takes!

It seems a little easier at the smaller places because you're actually going to hit someone who will be very involved in the firm. It's not so much a gatekeeper as the person who will also have to approve your personality on such a small team versus an HR person at a large firm who is just looking at your numbers.

2) The interview process was pretty much just culture and fit. They know that anyone can do the deal flow and analysis of their companies. This is early stage, so there are no DCFs or anything like that - we do a bit of FP&A on their burn rates (rate that they'll run out of money), but we mainly look at the team and the idea. So at a place that's small like my firm, culture is everything. Additionally, my background of working with tech helps when I'm working with our portfolio companies as I have some connections & knowledge of bigger names doing similar things. I would say that the focus was primarily on why I wanted to work with them, what I worked on at my prior tech firm, and then just my general involvement in the tech & startup community. I had my first interview with my recruiter, then I had a call with one of the partners to ask her questions and to get to know her and she wanted to see my background and what I was like, and finally, I had a quick call with my associate just to chat and to get her final approval. Effectively, I had the job from when my first interview ended, unless I completely spooked the partner or associate - they were just calling to have some contact and stamp off on me joining.

3) I do not have US citizenship. My first two internships (F500 & Tech firm) were on my CPT. I ended up using 11 months of CPT (which means I have OPT for next year - Do not use all 52 weeks of CPT or you don't get OPT. . So for this one, I had to branch out to Europe, where I do have citizenship. When looking for internships, CPT is really easy. You just have to get your I-20 changed (and approved by the US gov't with proof of an offer) to say that you will be working and get it resigned (your int'l student office should be able to help you with this). If they don't do CPT, tell them you want to use it (try and force your office to help as much as possible with this) for your internship and I think you can actually get the firm to help you if your school is unwilling. It's never a good idea, in my opinion, to use OPT for an internship and it's very helpful to have a year of work after graduation in case of any issues with the H1B process (particularly as the process to apply for visas begins in April and if you don't have a job offer, you have to wait till next year to apply). I haven't gone through the H1B process yet. I'm a little nervous, but hopefully a firm will be willing to sponsor me for that, but time will tell.

7xEBITDA:

Do you participate at all in the sourcing process or do you focus on analysis/evaluation of incoming pitches?

I do both really. I'll go to demo days and various networking events to meet startups, as well as tap into various communities and networks that I've formed in previous internships & at uni. I will say that most of the deals we do won't necessarily be sourced by myself or my associate. A lot of startups will be referred at a high level to our partners and so they'll be choosing from those mainly, but I do go and meet with entrepreneurs and can bring them in if I feel like they are a good fit for our portfolio.

    • 1
Mar 20, 2014

People get in at 1030/11 jesus

Mar 20, 2014

thanks for doing this! putting on the frontpage around 6pm et today

WSO's COO (Chief Operating Orangutan) | My Linkedin

Mar 20, 2014
Solidarity:

People get in at 1030/11 jesus

Haha, yeah. Although, a lot of them work really late + weekends, so it does add up. The partners get in fairly late, but they're always working when they're away from the office (networking, email, traveling, etc-)

AndyLouis:

thanks for doing this! putting on the frontpage around 6pm et today

Awesome! Glad it's of some help to the community.

Mar 21, 2014

any interest in blogging more for WSO? shoot me an email at [email protected]

WSO's COO (Chief Operating Orangutan) | My Linkedin

Best Response
Mar 20, 2014

Good write up. Just a couple of notes, mostly to contrast your experience to show the breadth of experiences you can have in VC.

While some VCs might have rudimentary means of tracking deal flow, most firms have something more sophisticated than spreadsheets and google docs.

Also, while it might be annoying to see people label their own stuff as "the next facebook" or "disruptive tech", it is critical that they do that. Every good entrepreneur knows that you have to pimp your own product because if you don't, nobody will. Like you said, so many ideas and business plans are thrown around that you have to have a hook. Investors don't drop out of the sky now like Markkula, especially in the early stage. Post tech bubble VC returns have been generally awful (with obvious notable exceptions) and are only now starting to ramp up. It's been hard for entrepreneurs.

Also, if you're not disrupting, you're doing it wrong. And talk is cheap, for sure, but don't ding something just because they self promote, because they really have no other choice.

    • 2
Mar 21, 2014
Mr. Manager:

Good write up. Just a couple of notes, mostly to contrast your experience to show the breadth of experiences you can have in VC.

While some VCs might have rudimentary means of tracking deal flow, most firms have something more sophisticated than spreadsheets and google docs.

Also, while it might be annoying to see people label their own stuff as "the next facebook" or "disruptive tech", it is critical that they do that. Every good entrepreneur knows that you have to pimp your own product because if you don't, nobody will. Like you said, so many ideas and business plans are thrown around that you have to have a hook. Investors don't drop out of the sky now like Markkula, especially in the early stage. Post tech bubble VC returns have been generally awful (with obvious notable exceptions) and are only now starting to ramp up. It's been hard for entrepreneurs.

Also, if you're not disrupting, you're doing it wrong. And talk is cheap, for sure, but don't ding something just because they self promote, because they really have no other choice.

Very good points. Definitely could be chalked down to the difference in funds. Everyone has their own style of course.

On deal flow, I'd love to hear more about solutions you've come across? I've done a bit of research through various outlets (Quora + various googling and asking around a bit) to see if there is a better way of doing it, but haven't come across anything (could be due to the way our deals come in, but maybe not as well), so I'd love any feedback or information about systems that you've come across, as my firm can sometimes struggle with the organization of everything.

I apologize if I came off as a bit flippant with regards to that. I think there are two points on the calling yourself the next Facebook that I have issues with. They both mainly have to do with expectations. The first is expectations of the entrepreneur - if you don't have the growth to call yourself the next Facebook/Google/whatever, make sure you're honest about that. We look at a variety of metrics and indicators to see how a product is received (since we're early stage, financials aren't that important to us), but if you're numbers aren't there - have an honest conversation about it. I think that if the company that says they will be, will end up having unrealistic expectations and nothing to back them up, and in the long run - that harms them because they aren't setting goals that they can hit and improve upon. I love ambition, but I think it should also be attainable ambition. The old cliche "it's a marathon not a sprint" can apply to a lot of companies (not all, but a fair amount that I've come across).

That leads me to my second point, I think that if we were to invest with that expectation, then the amount of pressure on the team to grow and hit astonishing numbers is incredibly high. (Again - limited experience here, so based on conversations ~ real world may vary..:) ) From what I've spoken about with the partners at my firm, we would never want to have a team under pressure to perform like that - we want them to be cohesive and execute well rather than crack under pressure.

It's a very good point, though, regarding branding. Something does have to set a team apart from another. (I think, personally, I look at decks and their product and if their design and passion comes through in the product, I'm more likely to pass it on - but everyone is different.) I will definitely try not to paint everyone with the same brush, though - I'm sure there are some really good teams or products that do call themselves that and it's not necessarily fair of me to ding them immediately because they are trying to self-promote. Definitely appreciate the advice! Good stuff.

    • 1
Mar 21, 2014

is the firm in europe?

Mar 24, 2014
ivedtara:

is the firm in europe?

Yep

Mar 26, 2014

Hey thanks for doing this! I hope I haven't arrived too late to the party, I have a few questions:

How old are you and what did you study in University? Do you think your prior internships helped a lot in landing the job? How is compensation? Is it safe to assume you are located in either London or Frankfurt/Munich?

Thanks again!

Mar 28, 2014

thanks for sharing.

are you hooked on the industry? why/why not?

Mar 31, 2014
gscape:

Hey thanks for doing this! I hope I haven't arrived too late to the party, I have a few questions:

How old are you and what did you study in University? Do you think your prior internships helped a lot in landing the job? How is compensation? Is it safe to assume you are located in either London or Frankfurt/Munich?

Thanks again!

Not too late - sorry for my delay!

I'm 22; studying Economics (still in university). I definitely think it was the reason they took a shot with me. Working at the tech firm gave me a ton of knowledge both in understanding the industry from the deal flow side of things. but also to help any of our portfolio companies out.

My compensation is on the low end (pays my bills/I can still have some fun, but I really do watch what I spend) as it's an internship and it's a smaller fund (at this stage, though, it's experience/connections > money for me), but I'm not sure what others within the fund take home (obviously partners make a lot, but they have a lot invested as well). I am in a major European financial center (sorry - don't want to be too specific, VC is a really small world/I'm overly-cautious haha) ;)

bigtree53:

thanks for sharing.

are you hooked on the industry? why/why not?

I think so. When I first got here, I wasn't so much as I hadn't met many people in the industry. Since then, I've been introduced to so many different people (including really influential people in tech, both European & American), and have started to get more of a grasp of the networking/who you know aspect, that it's definitely addictive. It's also helped build my networking/going up and introducing myself-to-people skills, which is something I would never really do before.

The lifestyle is also a lot of fun - there are days that I'm working long hours, but I may not be in the office; it's a lot more varied than working at a large company - you're very mobile most of the time (at events, coffees, demo days, etc-). Personally, I've always loved tech, but I can definitely see myself really enjoying being a partner at some form of VC firm - what's still unclear is the path to get there.

From what I've seen, you don't really start off in VC (some places do have people straight from uni, it's true), but it's unlikely as you have little to add & are expensive overhead. So, depending on how this turns out/who I meet, I'll probably be looking to either do TMT IBD (I view it as a necessary evil, really) or maybe try and see if I can get a CorpDev position within a large tech firm [would love this, I think] and then move to the VC world after. Though, if I was offered an analyst role at a VC firm, I'd probably jump on it really quickly.

Mar 31, 2014

Thanks for your replies! Super insightful!

Couple more questions:
How technical is your day to day work? If at all? Or is it a Sales type position?
If it's technical were you trained by them? Or how did you achieve the technical skills to do the job?

Thanks again!

    • 1
Apr 3, 2014

Hi thanks for your great post. I am an international student as well (currently sophomore). I am thinking about taking a semester off to do off-cycle internship and realized that CPT/OPT thing is quite complicated.

I was wondering how you got those off-cycle internships at the F500 Financial Services and top tech firm. Does that mean you took a year/semester off after finishing sophomore year? And how long were those internships?

Thanks!

Apr 8, 2014

Cool writeup, man. If this isn't already obvious, I really like this style of writing and I think it's perfect for the WSO community. We're mostly over analytical types here and like to absorb excesses of information that most people wouldn't even think to look for. I'm interviewing with a couple VCs as part of a post grad program I'm doing and found this very informative.

Apr 17, 2014

Great write up. I'll be starting an internship with a VC group next month and wanted to find out if you had any tips for my start. Anything that you wish you did differently in your first week? Any technical skills that I should make myself an expert in before starting?

Also - if you plan to be a VC later on do you think you will stay with your current firm or gain operating experience and then loop back around?

Apr 28, 2014
moneymogul:

Cool writeup, man. If this isn't already obvious, I really like this style of writing and I think it's perfect for the WSO community. We're mostly over analytical types here and like to absorb excesses of information that most people wouldn't even think to look for. I'm interviewing with a couple VCs as part of a post grad program I'm doing and found this very informative.

Glad to hear it's of some help! I hope the interviews go well & you enjoy the VC world :)

lifestudent:

Great write up. I'll be starting an internship with a VC group next month and wanted to find out if you had any tips for my start. Anything that you wish you did differently in your first week? Any technical skills that I should make myself an expert in before starting?

Also - if you plan to be a VC later on do you think you will stay with your current firm or gain operating experience and then loop back around?

Awesome job grabbing an internship like that! As some tips, I would say just to listen and learn as much as possible. Each firm & group is really different so they all have their own style of how they get things done and ensuring that you're part of that culture is huge in the small VC world.

Depending on the stage of VC that your group does, financial modeling practice could help (if you're later stage where revenues are pretty big already & cap tables are fairly complex). Also, make sure you know what's going on lately in the tech scene (both with public companies whether it's M&A or just general product launches, and with TechCrunch type news). Other than that, just be sure to have fun your first week and get to know the people you'll be working with! The area is a lot of fun, so I hope you enjoy it!

I'd love to be a VC later on, but I think that it's going to be important to have held an operator role first and then join a vc later on [not necessarily be a founder, but at least have a fair amount of tech experience]. Some of the biggest names (thinking A16Z, Google Ventures [little unorthodox, but great firm], Sequoia, etc-) in the VC world have been started by former operators and they seem to end up with the best know-how in the industry (both in terms of deal flow and helping out their portfolios with connections).

Ideally, I'd want to work at a fully rounded firm (think: Google Ventures) that offers more than a check, but design skills & legal advice, financials, mentorship, etc-, as I believe that's the trend that the VC world will end up following due to the increased competition in the space.

Apr 29, 2014

Did you have to go on any Burger King runs this week?

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Apr 30, 2014
heister:

Did you have to go on any Burger King runs this week?

It's not America, in Europe we go on broccoli & carrot runs.

Disclaimer: Above may or may not apply to the UK. Does not apply to the UK.

Apr 30, 2014

Nice post! 25 SWOT analyses must have been a pain ...

I work in growth equity, without any debt financing, although we're changing our strategy as we are now a listed holdings company rather. This means that we will be doing three tranches of investment: VC/GE type of big return deals, appr. late stage 2 year investments aimed at exiting through IPO, and buy-and-hold deals aimed at paying dividends. All of these will be on balance sheet investments.

Btw, I am included in those weekly pipeline meetings etc ... not as interesting as you may think. :) But it helps align tasks and plan for the week.

Question: Do you do any financial modeling at all? We're big on very detailed and granular financial models (revenue & cost models), and valuations. Like you said, these are mostly aimed at figuring out how much capital the company actually needs before it can organically grow, and to identify what milestones should be used in the motivation for DD, and the eventually the term sheet. Perhaps since you guys are more early stage (i think), this isn't as important? We also, btw, place huge importance on the team and most notably, their coach-ability.

Also, how involved are you guys in the portfolio company's operations? And lastly, does your firm only do local investments? In fact, if anyone can answer this, are there any VC/Growth Equity firms in Europe that focus on Africa?

Sorry for all the questions, just very interested ...

May 1, 2014
heister:

Did you have to go on any Burger King runs this week?

I didn't thankfully. But someone else from our office did. It was really weird - a partner wanted to try one of everything. Something about looking at the sesame seeds - I don't know, I got a weird vibe from it all. All I know is that I ended up with free BK at the end of our day & one of our portfolio companies didn't go insolvent. A pretty hectic day, but it all worked out! ;)

Orkid:

Nice post! 25 SWOT analyses must have been a pain ...

I work in growth equity, without any debt financing, although we're changing our strategy as we are now a listed holdings company rather. This means that we will be doing three tranches of investment: VC/GE type of big return deals, appr. late stage 2 year investments aimed at exiting through IPO, and buy-and-hold deals aimed at paying dividends. All of these will be on balance sheet investments.

Btw, I am included in those weekly pipeline meetings etc ... not as interesting as you may think. :) But it helps align tasks and plan for the week.

Question: Do you do any financial modeling at all? We're big on very detailed and granular financial models (revenue & cost models), and valuations. Like you said, these are mostly aimed at figuring out how much capital the company actually needs before it can organically grow, and to identify what milestones should be used in the motivation for DD, and the eventually the term sheet. Perhaps since you guys are more early stage (i think), this isn't as important? We also, btw, place huge importance on the team and most notably, their coach-ability.

Also, how involved are you guys in the portfolio company's operations? And lastly, does your firm only do local investments? In fact, if anyone can answer this, are there any VC/Growth Equity firms in Europe that focus on Africa?

Sorry for all the questions, just very interested ...

Haha, yeah - they took a while, but it was good practice and I learned a lot through it.

Oh okay - that's pretty cool. Quite unusual (at least from my limited experience). Would you end up holding some of your earlier investments into perpetuity? [I'd imagine yes - but I suppose it depends on your investment & lp agreements?]

Haha - that's good to know! I'd just love to learn from them. I find that I've learnt the most from just listening on meetings with how partners and the like deal with situations or entrepreneurs etc-

On your questions:
We do limited to no financial modeling in our DD, it depends on the company and where it is at, really. As our companies grow and look to raise more funding, we start to do more financial modeling. A lot of the times we'll have been invested during pre-revenue (or limited amounts) and we'll be with the company as they start ramping up their revenue (even >100k per month). In this case, we will begin doing some financial modeling in terms of valuation of the company and its projected future growth. The partners have a good grasp on who our big winners will be and are very invested when it comes to this research because it can make or break a funding round (large series A/B rounds primarily).

With regards to involvement, we're as involved as we think we need to be and as our companies want us to be. It's pretty case by case, but often some companies management (or the product + management) is good enough to have a strong growth trajectory without our involvement operationally. We're happy to provide advice and connections and whatever these companies ask for, but we're also happy to leave them be during the quarter to get on with shipping their products. With other companies, whether it's a harder space or newer entrepreneurs or just teams that want us to be involved, we get pretty involved in the operations. We'll do anything from helping with copy writing/marketing/financial planning & analysis to setting up intros with potential key partners/customers. It really depends on what the team wants and what we think they need. We're also constantly working the PR (whether it's over Twitter or just general submissions for awards etc-)

On your last question: we generally do local investments. However, we won't pass up a great deal if we see one - so primarily local, but not exclusive. I'm not sure of a specific fund that specializes in VC in Africa. One PE fund I know that has Africa as a focus [however, more of a improving community life + making money focus] is Bamboo Finance (http://www.bamboofinance.com/about/). Helios Investment also does later stage/PE investments in the region (http://www.heliosinvestment.com). I think there might be specific funds in Africa - but I'm not sure exactly (we have no African investments and only one deal from Africa has come across).

No problem! Glad I could be of some help!

a654321b1:

thank you a lot of doing this, i'm trying to know more about VC

No problem! Glad to be of some help!

torchic:

Excellent - not too much out there on this, great post !

Thanks! Appreciate the feedback!

gscape:

What is compensation like in the industry for an entry level position?

I can't really speak much to that. The path to VC at the entry level is pretty limited and it very much depends on the fund (funds with larger AUM can afford to hire entry level if they want to vs an early stage smaller fund). I would say that it would probably be somewhat lower than an entry level position at a boutique IBD/PE role. However, it's highly fund dependent and not so much industry specific. We don't have any entry level people at our firm (just me as an intern), so I have no metrics to go off of unfortunately!

Apr 30, 2014

thank you a lot of doing this, i'm trying to know more about VC

Apr 30, 2014

Excellent - not too much out there on this, great post !

speed boost blaze

Apr 30, 2014

What is compensation like in the industry for an entry level position?

May 1, 2014

.

Jul 3, 2014

Thanks for sharing your experience as a VC intern! Reading this gave me an idea of what VC is like. What is your major? How many internships have you had before?

Jul 14, 2014

Excellent write up!

Jul 14, 2014

sounds good

Jul 29, 2014

Good read. Thx

Nov 22, 2014

Hello SmokeyTheBear, thanks for the post ! Interesting read.

I got offered an internship in VC, and have also exciting opportunities in start-ups - especially one that is going to raise money very soon, and they don't have a business guy yet.
I experienced my internship for one day and a half to make the transition smooth, and it actually sounded a bit 'empty' to me, as compared to previous internships where there were tons of interesting things to do and projects to get involved in.
I'm actually worried that I could accept the VC offer just because it seems rare to get one, as compared to some early stage start-up, but I think I could regret it.
My goal is to found my own company in a few years, but not before having tried a job or two, maybe in consulting to get rid of my student loan.

Regards

Nov 22, 2014

Sounds like quite a fun internship, and interesting main project. I would have thought majority of the analyst's role would be market analysis and venture pitch screenings.

Did you end up getting the client?
Also interested in the backgrounds of the partners at the firm, how did they end up in VC?
Did your firm have a specific investment thesis?

Nov 22, 2014
Yekrut:

Sounds like quite a fun internship, and interesting main project. I would have thought majority of the analyst's role would be market analysis and venture pitch screenings.

Did you end up getting the client?

Also interested in the backgrounds of the partners at the firm, how did they end up in VC?

Did your firm have a specific investment thesis?

As I said, the responsibilities are vague. Analysts do everything. I was lucky enough to get invovled in a major deal. Sometimes the analysts would prepare a 20+ slides deck only to be informed that the deal was off the table.

Deal is on 9/1. We are the leading investor so I dont think there will be a problem.

One former salesman and programmer. One former investment banker. One former corporate banker.
I worked with the partner that was a former programmer. He liked to invest and thought that VC was a triple win. You win. LPs win. Entrepreneurs win. VCs aren't playing a zero sum game. What they are doing is giving capitals to the right hands.

Investment thesis. The partner that I worked with said that he always followed the guideline of:
1. Is there a demand for what the company is doing?
2. Is the business model viable?
3. Is the trend right?
4. Is the management team right?

If the above four are all checks for the company, he would do the deal.

Nov 22, 2014

1. was this in california?
2. any word on how the VC scene is outside of Cal?
3. it doesn't sound like the technical aspect of what drives investments is any different from PE. any truth?
4. was the option for a full time return offer on the table when you took the internship?

happy to give advice; no asking for referrals please

Nov 22, 2014
matayo:

1. was this in california?

2. any word on how the VC scene is outside of Cal?

3. it doesn't sound like the technical aspect of what drives investments is any different from PE. any truth?

4. was the option for a full time return offer on the table when you took the internship?

1. Nope.
2. Not sure how to answer this question. Specifically in what aspect?
3. This came from the partner that I worked with:

PE is more technical and involves more financial statement analysis. That is because PE analyzes return and growth in a financial prospective. PE firms do all sorts of restructuring to their portfolio companies and expect to generate return by changing companies around.

Not VC. The screening process in VC is more intuitive because companies in their early stage don't really have numbers to be analyzed. Yes, there are numbers and these few numbers are being frequently played around like I said in the article.

The things VCs can do to a portfolio company is limited. Can't change the CEO. We did that once. The management team were all BFFs and they left with the CEO. Guess what. the company became empty. To a VC, nothing is more important than a company's management team and their ideas. All venture capitalists can do is provide the CEOs with advice & hope for the best. A perk for doing VC deals is that while in most time you lost money or generate limited returns, one portfolio company may one day be bought at 20x its original price (our record was 30x. for the deal i in which was involved, the word is it has the potential to go 100x). You don't see that a lot in PE.

4. Yes. However, I enjoy dealing with numbers so I figured that VC wasn't something I wanted to do in the future. I want to give IB a try next year.

Nov 22, 2014

What was the most interesting part of it all that you would see yourself working in full time?

Nov 22, 2014
bilalo:

What was the most interesting part of it all that you would see yourself working in full time?

This is a tough one. The exp of working with a CEO is awesome. I don't mean this in a condescending way but the entrepreneur in the deal described in my article studied UG and MS in MIT. He's now a division head of the government's research facility. I'm only an UG and he answers every single one of my questions with patience. That is an amazing feeling. Also, sales projection is one fun but tough game to play. The partners would challenge your logic in every way possible until they get a satisfactory answer. Tough, but fun.

Nov 22, 2014

If you work in an Emerging market this doesn't hold: "They had a loyal client: the government." Seen quite a few investment in my region (Eastern Europe) that ended up bankrupt because of government "loyalty".

Thanks for the write up, I m very interested in VC.
Can you tell us how are the hours compared to IB?

"When a defining moment comes along you define the moment or the moment defines you."

Nov 22, 2014
ibsee:

If you work in an Emerging market this doesn't hold: "They had a loyal client: the government." Seen quite a few investment in my region (Eastern Europe) that ended up bankrupt because of government "loyalty".

Thanks for the write up, I m very interested in VC.

Can you tell us how are the hours compared to IB?

Here's how it works (we know this because many of our port comps have the gov as their client): every division in the gov has to budget their expense before the fiscal year begins. If the actual spending is more or LESS than the budgeted #, they have to write a report to explain why. Thus, they always spend the exact amount. The only problem is that the gov money comes very slowly so there s a time gap between AR and AP realization. I won't go into that though.

Hours are better because VCs are the one with the money. However, don't expect partners to be more merciful than MDs. They sometimes do have a false sense of urgency. They need the reports to be done in a timely manner regardless of their level of interest. Bad weeks can reach 80 hours. Still better than banking.

Nov 22, 2014
kyc133enydc:

1 takeaway from a partner: there will be a correction in the tech industry. Capitals are flowing to software companies because other tech areas hit a plateau. Once there are developments in robotics, energy and other high tech you see in movies, capitals will flow to those areas. Your thought?

I completely agree with this. I'm just starting to learn about the software space. It's really interesting when you see the importance of software companies to the entire Tech industry. Hoping to get more involved down the road with software companies, specifically in the growth phase. I find that to be a pretty fun time of a company's life.

Thanks for writing about your experience. How did you come across the opportunity? And how did you position yourself to get the offer?

Nov 22, 2014
NupeOnTheStreet:
kyc133enydc:

1 takeaway from a partner: there will be a correction in the tech industry. Capitals are flowing to software companies because other tech areas hit a plateau. Once there are developments in robotics, energy and other high tech you see in movies, capitals will flow to those areas. Your thought?

I completely agree with this. I'm just starting to learn about the software space. It's really interesting when you see the importance of software companies to the entire Tech industry. Hoping to get more involved down the road with software companies, specifically in the growth phase. I find that to be a pretty fun time of a company's life.

Thanks for writing about your experience. How did you come across the opportunity? And how did you position yourself to get the offer?

A contact of a contact. I did not know I would end up in VC initially. It came as a total surprise. It is very important to give the partners the impression that you can THINK and LEARN. It doesn't matter how well you know the accounting dynamics. When you see the financial statements you need to be able to tell what's important and what's not. You need to be able to tell if something is wrong. When you see a company that sells products that you have never heard of, you learn them upfront. The software company that I mentioned? It took me one month to understand what they are selling. That's what makes it attractive yet dangerous. Attractive why? It's not typical. It has a unique position in the market. Dangerous why? When it's that hard to understand, it is unknown whether the entrepreneur knows what he is doing.

Nov 22, 2014
kyc133enydc:

1 takeaway from a partner: there will be a correction in the tech industry. Capitals are flowing to software companies because other tech areas hit a plateau. Once there are developments in robotics, energy and other high tech you see in movies, capitals will flow to those areas.

That's interesting. I take that to mean that software has numbered days as a growth area, and will soon plateau as well.

Is there a way to gain this ear-to-the-ground that you have with the VC community without actually being in the industry? That is, being privy to what areas are growing and what areas are dying?

Excellent writeup, by the way.

Nov 22, 2014
Glothyc:
kyc133enydc:

1 takeaway from a partner: there will be a correction in the tech industry. Capitals are flowing to software companies because other tech areas hit a plateau. Once there are developments in robotics, energy and other high tech you see in movies, capitals will flow to those areas.

That's interesting. I take that to mean that software has numbered days as a growth area, and will soon plateau as well.

Is there a way to gain this ear-to-the-ground that you have with the VC community without actually being in the industry? That is, being privy to what areas are growing and what areas are dying?

Excellent writeup, by the way.

You do research. You talk to people. You observe. You think. As I mentioned earlier, thinking is VERY IMPORTANT. Everyone can tell you what the data are but coming up with your own conclusions is what venture capitalists have to do. There is no shortcut to this. The partner who said this used to work in the tech industry for years and has seen many companies succeed and fail under our portfolio. He has his opinions about how the industry works.

Nov 22, 2014

Why VC? Plans post graduation? What kind of work did you do at the VC? How did you get the internship? What kind of experience/skillset did you need or learn for the job?

Nov 22, 2014
  1. passionate about entrepreneurship and finance. really enjoy advising/fixing problems/innovate
  2. hopefully FT VC in Silicon Valley!
  3. participate in board meetings, help co's grow revenue, some financial work
  4. alumni worked at the VC. a lot of networking and a lot of luck i'd say
  5. i had startup experience and a previous internship at a wealth management firm. it really helps to have worked on a startup in any capacity. and you really need to be passionate about the industry and articulate why
Nov 22, 2014
Tam Wake:

Why VC? Plans post graduation? What kind of work did you do at the VC? How did you get the internship? What kind of experience/skillset did you need or learn for the job?

1. passionate about entrepreneurship and finance. really enjoy advising/fixing problems/innovate
2. hopefully FT VC in Silicon Valley!
3. participate in board meetings, help co's grow revenue, some financial work
4. alumni worked at the VC. a lot of networking and a lot of luck i'd say
5. i had startup experience and a previous internship at a wealth management firm. it really helps to have worked on a startup in any capacity. and you really need to be passionate about the industry and articulate why

Nov 22, 2014

hello, what is your name? I would like to have a friend that can chat with me about Bloomberg financial news. My whatsapp is +55 21 998071214

Nov 22, 2014

Do you think the CS major helped with breaking in?

Nov 22, 2014
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Nov 22, 2014
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"Even if you're on the right track, you'll get run over if you just sit there" - Will Rogers

Nov 22, 2014