Corporate Venture Capital vs Independent Venture capital firms ?
what's the pros and cons of starting your career in CVC vs independent VC firms? Will having the brand name on your resume (i.e intel capital, comcast ventures and etc) help you to move to top VCs like Sequoia or Andreessen? or I'm better off starting at a independent VC shop with a good track record and multiple funds. Thanks!
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Harry Stebbings had a 20min VC podcast where he interviewed a head guy in Corporate VC. Here is the link
http://www.thetwentyminutevc.com/nagrajkashyap/
I remember listening to the podcast and thinking that the guest did a good job laying out why he moved to Corporate VC and why its a good starting place.
Overall corporate VC is easier because you never have to fundraise and you're not as strictly judged on your returns. The mindset is a little different because you're really looking to invest in businesses where the tech is interesting and could potentially be complementary to the broader business down the line. Even though people in Corp VC will tell you that they still track all their performance metrics such as IRR, MOIC, etc the reality is they're not beholden to a set of LPs and usually won't get judged as harshly if the returns aren't there. The goal of corp VC also isn't to return as much money as possible, so its just not going to be as much of a focus.
In normal VC you'll probably learn more about what it truly takes to run a fund. IF you make it to the upper ranks you'll have to think about fundraising, managing LPs, capital calls etc. In my opinion thats a huge part of being successful as you move to the VP, Principal, Partner level. You're also much more focused on making investments that will make you money, which probably sharpens your skillset more than Corp VC where you can be a little sloppier. Obvsiol these are generalizations, but you get my point.
If I had my choice between the two, I'd start in normal VC and stay as long as I could. It's easier to go from a brand name VC fund, into running a Corp VC group then the other way around
Oh and forgot to mention, there's more money to be made in normal VC vs corporate. In most corporate VC you're just getting paid a standard salary + bonus + equity, similar to a Corp Dev or any other finance related role. In VC you get carry once you get to the upper levels, which is where you can make some big money. Now actually getting carry in VC is a whole other post from me, but in theory there's more upside.
ok. does the same apply if you're an undergrad?
If you seriously have your pick between the two, I'd probably start in normal VC given its at a brand name shop. Analyst positions at those places are few and far between though so not sure if you're asking for a hypothetical scenario or if you actually have a pick between the two.
If you're an undergrad I'd think seriously about VC as a starting point for your career in general. VC is all network and no real hard skills. Plus to go far in VC, in addition to a great network, most people have one if not a few "superpowers" which help them to spot opportunities. For finance guys it might be deal structuring/making, for Entrepreneurs it might be empathy towards founders and an ability to help guide them. For the most part, the entrepreneur/product/tech operations skill set is valuable extremely highly with many VCs heavily favoring former operators for both mid level and senior level roles.
That's not to say you couldn't make it as a career VC but I guarantee you'll run into discrimination vs the kid who came out of MIT with a CS degree, worked at Google/Facebook/Airbnb etc for a few years on cool products and now is vying with you for the Associate promotion that you're coveting.
Having done an internship in a CVC I echo what was said above, although some Corporate Venture Capital funds are running on their own, with their LPs being entities of the firm (at least at my firm). We were a returned focused fund, running similarly to a traditional VC fund for partners etc. however we had a BizDev team working to work with our portfolio startups to add value - if a startup has a Fortune 50 firm as a client it helps them get other big clients and they could get feedback from our firm on their product/develop products adapted to our need. The BizDev team was also working on potentially 'integrating' them in the Corporate - it was not always the end goal to have our Corporate buying the startup.
In the long run the partners want to open the fund to other investors after developing a track record with the first funds.
On a side not the Corporate had a huge focus on innovation for a firm outside of the tech world, there was an internal incubator, nursing projects and startups.
would you recommend starting out at a normal VC fund as well VS CVC? for an undergrad.
I would generally not advise to start in VC except if at one of the very large funds. CVC will very much depend on the strategy of the CVC, some are more like corp dev some more like VC
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