I'm currently working as a pre-MBA associate at a leading Silicon Valley VC firm (nearly $1B in current AUM). Happy to take any questions about working as a VC associate, recruiting, etc.
In terms of my background, I've worked in both business operations at a startup and tech banking at a bulge-bracket firm. Studied CS undergrad from a target school.
How much modeling do you do? Exit valuations? Three statements? Cap tables?
How many employees at your firm? Can you list by level?
What is an investment that interests you?
What came first, IB or the startup? A recent article that Paul Graham wrote stated that a startup should just bypass an associate and try to get an introduction to a partner, what are your thought on that?
@orangebull: I do practically no modeling, though note that I'm at an early-stage fund. Folks in growth equity and later stage funds will do more traditional financial modeling. I do a lot of market sizing/mapping and some bottoms up revenue builds. I've evaluated and edited cap tables though don't built any from scratch.
@hamm0: can't give specifics without sacrificing anonymity. We have 2 funds ~$900M in total. ~15 investment partners and a handful of junior folks. In terms of investment areas, I focus broadly within software, more on the consumer side (mobile apps, ecommerce, services, digital media) but also some SaaS/BI/marketing automation.
@packmate: banking came first. I strongly disagree with Paul Graham, as a number of other people in venture do. There are an extremely lucky and small set of startups that are hot enough or well-connected enough to go directly to partners. The other 99.9% won't get a meeting without going through an associate.
Thanks for the insight!
Could you give a quick overview on how you might size a market? How would you approach something like taxicab hailing apps? I know Uber just got a pretty big valuation.
Due to the lack of traditional modeling, it seems like the most abstract of the "high finance" fields. Is the job quantitative enough without the modeling? If not then it would seem that bankers wouldn't be that good of a fit for it as other backgrounds like consulting, I take it?
Market sizing is as simple as price per unit * units sold. As a simple example, let's say you're asked to size the market for wearable baby monitors. The average price for a baby monitor is $200 (based on existing products). There are 4M babies born in the US each year per the US Census Bureau, and assuming that 25% of households can afford to and are willing to get a baby monitor, that leads to a $200M addressable market. Sometimes you'll have to go into more detail around different segments and assumptions and do a rollup to fully size the market. Cab hailing for example is a more nuanced example. You would have to research or make an assumption about the average spend per ride * number of rides per cab * number of cabs. I'd calculate this city by city for each major city and roll them up. As a sanity check, you can usually compare your results to existing offline market sizes, which are published in articles and research reports. A quick search for the taxi and limo market shows it's ~$10B in annual revenue.
As for modeling, you're correct in that all the high finance skills you learned in banking aren't directly applicable to early stage VC. There's some in growth equity but still not nearly as much as you would do in PE or banking. That being said, VCs are biased towards analytical people with pedigrees. Most associates I know in VC, even in early stage funds, are predominantly ex-bankers or consultants.
When do you typically arrive and leave from work?
Thanks for doing this.
Have you seen any European VC analysts / associates during your time in the valley? Especially Europeans that didn't study in the US (undergraduate or MBA) but rather moved after their time in banking/consulting from Europe to the US?
And what would be your recommendation for someone from Europe who is trying to break into VC in the valley? Is it nearly impossible w/o a top US MBA?
Can you describe how you got your pre-MBA role? Namely the specifics regarding headhunter/networking? Also, how engaged are you with portfolio companies? Are you working directly with management often (and if so, what type of projects)? How much autonomy do you get in your responsibilities and what's the split (i.e., reaching out to portfolio company CEO's, meeting new companies, going to events, doing analysis, etc.)?
Does being in TMT at a BB help? Do VCs target certain industry/product groups?
Comps?
Thanks for doing this!
What is your visibility on the VC industry as a whole and where do you see the industry heading? More specifically thoughts on the VC industry in San Fran vs NYC vs Boston? How does geographic location impact investments (are most local or is there no bias)?
Does an CS background in undergrad help more than a business degree, or is it valued the same?
standard question - how to break in to VC field from a non-target university? I am graduating from good US business school next May, have an interesting background and work experience, I also did a summer internship in a 100m$ VC fund and currently still working for them part time.The only drawback - its not in US, while I want to work here post graduation.
Have you seen people from valuation (specializing in tech industry) move to VC? Thanks in advance.
Thanks, appreciate the response. SB'd.
Thanks for the great commentary, appreciate the input.
Thanks for this. A few questions :
1) What do you think of product management and consulting respectively for breaking into VC? If it is prevelant, does the product management experience have to be in Google/Amazon/Ebay/Microsoft etc?
2) Your personal opinion on the social media and mobile app start-up spaces right now?
Thanks! One more question, say I had 3-4 VC internships in undergrad, all at $100MM+ early stage firms (no brand names) and founded an accelerator backed startup with a decent # of customers - can I have a legitimate case to break into VC out of undergrad, or would they probably still turn me down due to lack of FT experience?
Thoughts on your career path going forward after a pre-MBA role? Obviously it's difficult to just stay at the same firm and move up the ladder onto partner path without operational experience. Usually a lot of junior VC guys end up founding a start-up, joining a portfolio company (product management or business development), or go back for a MBA. However, each of these present its own issues: namely, as a VC despite learning a lot about how start-ups work and fundraising, you don't really directly learn the actual operational skills you need to start a start-up or be involved in product management (and less-so business development). Would like to hear your thoughts on this.
Thanks for hosting this thread.
1) Would it be possible for you to rank the following in terms of how they look to VCs a) IB b) Consulting c) F500 PM d) F500 rotations e) start-up experience *I saw the not the PM experience is preferable to start-up work.
2) How common is it to go from VC analyst/associate to partner?
3) How does B-school placement percentages for VC analysts compare to those of MBB consultants?
Can you offer some advice for someone working in corporate finance at a biotech firm? If I want to break into biotech VC at what level should I try at? Analyst/Sr. Analyst/Mgr? Is it better to switch to a sales job first so you get first hand experience that will translate into market sizing? Should the path be Sr analyst -> MBA -> VC? Just looking for your thoughts on the best way to break in.
If I'm not able to break into VC, what kind of roles would I be able to land at a startup with my VC internships and experience founding an accelerator backed startup? I have a CS major with a minor in business. Would tech roles come easier, or would I be more limited to biz roles?
Can you please expand on what exactly are the business operations roles(Google APM etc) and what individual's responsibilities are in those roles? What other similar companies are considered elite? Thank you.
Hey man. I'm currently a computational biologist at arguably the top place in the world for my field. I have a couple big time publications(i.e. nature, science) and my undergrad was in biology and economics. I'm planning on making the jump into life science VC within the next year or so. I was wondering what your thoughts on scientists making the jump into VC are?
How are engineering majors from top public schools viewed by VCs (i.e., Berkeley, UMich)?
As a follow-up to this, can you discuss the distinctions between Product Management and Product Marketing Management? I've come to understand the two roles as separate but equal on the hierarchy, but have always thought that PMM made more sense under the purview of PM. It's probably different on a per-company basis, but any insight you have as to the distinction between the roles would be great (I've been led to believe that PMM is a somewhat common role out of B-School that is actionable for non-technical backgrounds).
More importantly, how are PMMs viewed as VC candidates? Does PMM get treated as its own role or is it grouped into PM?
I think that I failed to mention that I am choosing to go the VC route instead of going back to school for my MD/PhD. In this case, what would your thoughts be on my options??
HI - what do you think of places like Acumen Fund - the impact investing VC. Any idea on how selective they are and how easy/difficult it is to go from there to a top 5 MBA?
Thanks :)
Since it seems that First Round (and please correct me if I'm wrong) is training VCs in unis with their Dorm Room Funds, what's to stop an enterprising student from networking their ass off to find mentors, on campus entrepreneurs, etc, learn what they need to analyse/valuate companies and approach angels or VCs with a scout fund or crowdfunding and do the same thing?
if someone can't directly land VC offer post-MBA, what's the best alternative? is it normal for people working at post-MBA roles in tech company (like PM or Strategy/BD in Google) and then move to VC? Can post-MBA role in VC lead to partner?
thanks.
Awesome, thanks so much for answering my PMM question man. +1.
As a follow-up to the mid-level movement comment, how flexible would you say the mid-level jump is across stages? I'd imagine it's difficult (and uncommon) for a Principal at even a tech-focused pure-play PE fund (let's use Thoma Bravo as a comp) to make the jump to an early stage fund (let's use DFJ) without some exception in his background, but how about a Principal from a growth fund (let's use TA Associates) trying to make the move? I'd imagine a decent amount of the skills are transferable, but I'm not sure. Just wanted to get your view on what the liquidity is like across stages. Thanks.
Which would be more beneficial if one wanted to join a larger more prominent vc firm as an associate. An analyst stint at smaller lesser known vc firm or management consulting? Also does your firm sponsor to b-school?
You are the best. Please keep the knowledge flowing.
Say one has medical school goals with undergrad VC experience - would you say it's harder to break into the life sciences VC space after an MD than before? Secondly, would an MD be able to enter as a partner, or would he have to start in a post-MBA role?
This is a great post.
Can I send you a PM? My question is very specific to my situation. Thanks in advance.
Did you learn everything that you needed to know on the job? Were there courses/certifications that you took to give you the 'edge' to get to getting the initial internships
Looks like I am bringing this one back. Can you briefly explain what the landscape of VC firms is like? I know there are your Sequoia Capitals and First Round Capitals etc. What does the landscape of firms look like beyond those large well publicized funds?
Thanks
The landscape is very bifurcated. On one hand top quartile funds and funds with tier 1 reputations (Kleiner, Sequoia, Accel, Greylock) have no problem raising successive funds and the challenge for them is to be disciplined and cap an otherwise very oversubscribed fund to protect returns. Outside of these funds it's really really challenging to raise, and we're seeing a ton of zombie funds that were raised pre-crisis (2004-2007) die out. So the overall industry is contracting.
What was the nature of the startup that you worked for and your role there? How many people were at the startup when you joined and what level of funding was it at?
I worked for a consumer mobile startup. It had raised several rounds of VC funding from some prominent names, though it was still fairly early (nominal revenue,
do you mean that you learned corp finance, and others you listed, all on the job? Also, what do you think the benefits of MBA are...give me a scenario without and without one, in terms of ceiling, opportunities, exit opp, etc, etc.
Thank you for the insight.
How important is it that the start-up you've worked for is financially successful? Was the start-up you worked for ultimately successful?
I have experience similar to yours but that's on a project/product in a big multinational company (bank). The project was in consumer services / payments and was carved out as a separate division from inception. It was operated like a start-up in almost all aspects (hiring strategy, team structure, business development, etc.). In fact, it was kicked off by the acquisition of a tech start-up from the valley. Funding for the acquisition and the development of the product was all internal.
My responsibilities mirror what you've described above (corp finance, strategy, product analytics, marketing analytics, and sales ops). Prior to that I worked at a large IT company (global top 5) in various Project Finance, Business Development and Business Analytics roles. I am now at a Big4 in their Transactions & Restructuring team (market sizing, business/financial modelling, deal structures etc. clients from a variety of industries). I am based in the UK, have an MSc from a top B-school (Europe) but no MBA.
Do I have a chance at the pre-MBA associate position or do I need to do an MBA first?
Hi! Thanks for doing the A2A. My question:
Would a sales role at an elite SaaS tech firm be a reasonable route into VC? The company I am thinking of is VC-funded, pre-IPO, growing fast.
I have an interview with a VC firm, what type of questions should I expect?
Have you ever worked with a post-MBA who has taken on an associate role? Is it an awkward situation to have 30-ish year olds working for younger VC associates?
Have you seen any post MBA's currently in tech banking as a RM (i.e. Silicon Valley Bank, WF Tech/Venture Bank) transition to VC? If so, in what capacity? Thanks for the feedback.
What would be the best engagements/roles for someone in MBB if they plan on transitioning to VC? Would it be pure strategy, analytics or something more operational?
Thanks!
Thank you for the quick reply. Which functions at your previous start up prepared you the best for VC?
Is my profile in line with getting an associate role at a VC firm right now?
-15 months at a high profile tech start up (think Twitter, SpaceX, Nest), this was my first job out of school -PM role, got promoted within my first year -Graduated with a BS in EE from a top-15 university -Worked at a start up (sports-related) during junior and senior year of college (total of 7 employees)
What would the marginal benefit of an MBA be for me with regards to getting into VC at the associate level?
Thanks a lot for your input, feel free to PM me if you want more specific details.
thanks for making this thread, just read through it all and very helpful. i'm looking to get into VC in nyc and have somewhat of a non traditional background and was wondering what my chances are and if there are any funds in particular i should target.
undergrad degree in finance from top state school (mich, uva, berkeley) 1+ year at top BB in high yield research 5 years running a bootstrapped ecommerce business
appreciate any insight you can provide
thanks for the reply. that confirms what i figured in terms of firms to target. i've seen a few openings for analyst positions on firms i think would be a fit. would i be "overqualified" for those type of roles or would it be worth pursuing to get my foot in the door?
.
How often does a VC firm use independent 3rd party validation before investing? I am talking cleantech, not software mainly.
I'm currently in healthcare consulting, but considering switching to a PM role at a digital agency in NYC. It's not exactly a tech startup PM role since they mostly deal with websites, but it would offer the experience of optimizing for UX and other PM skills. Would this help in the path to VC? The reason I'm considering this is b/c I can't find a PM job with a tech startup I like.
Im looking to get into later stage VC at the analyst level. Heres my background, what do you think my next move should be?
-Finance major at a top undergrad -IB internship -1 year of experience working at a late-stage online gaming startup with ~$200mm in revenue in a finance role on the west coast. promoted from Financial Analyst--->Sr. FA. Involved in everything from budgeting/FP&A to M&A and other ad hoc assignments, good amount of modeling. Finance team consists of me, one VP and the CFO. -Closely follow the tech industry -Strong banking connections if I should go that route
Are you still in school or did you graduate? The traditional way to enter late stage VC is to do a banking analyst stint first and then join as a pre MBA associate. For those MS menlo, GS TMT SF, and Qatalyst are the top regarded among VCs. If you're at a top target you should also look at the few firms that have undergrad programs (Bessemer, Insight, Summit, and Accel are the ones I know off the top of my head that recruit regularly).
I am 1 year out of undergrad, have been at the online gaming startup since graduation - I have good banking connections through my undergrad and my current company. So basically what you're saying is there isnt any way that I could go from a finance role in a successful startup -->VC without an IB analyst program first?
Im just trying to decide if it makes sense to stay at my current company for another year or try to lateral to IB ASAP.
^ You don't have to be in banking, though that is the preferred route for growth stage VCs. Those guys primarily use headhunters to recruit, so given you're out of school your best bet is to network hard with the pre MBA VC headhunters (Glocap, CPI, and Juno are the main ones). If you're at a well known company that's doing well (e.g. Kabam, Supercell, King) and you went to a top target school (e.g. Stanford, Harvard, MIT, or Wharton), you should be a pretty competitive candidate.
What's the difference between growth PE vs late stage/ mid stage VC?
In terms of day to day work and recruiting, it's pretty similar across the board. Both sets of firms hire primarily IBD analysts through headhunters. Many of these firms emphasize sourcing. The VC guys have a slight preference for people who are demonstrably tech oriented (are in TMT groups, were CS majors, etc).
Hello,
Can you share details or templates on three items. 1. Sanitized Business Plans / Pitches esp. financial estimates of pitches that where done well 2. I've read Mastering the VC Game. Would like your opinion on how accurate you think this is, and anything to add. 3. At the angel level, where does a software tech firm need to be before seriously reaching out for cash? Assume they are pre-revenue, (eg. # and size of clients, certain growth rate, etc.)
Thank you.
Thanks for this thread, really helpful. In terms of recruiting, have you seen people make the jump from equity research (covering software, semis, internet) to VC pre-MBA associate roles? Would it be possible to go from ER-->M7 MBA-->VC post-mba associate role? I'd assume tech interest (blogging, MBA clubs) would go a long way in the second instance
Yep, this is not uncommon. Assuming you're covering Internet, ecommerce, enterprise software, etc it's pretty feasible to make the jump to VC. There are a number of very prominent VCs (Bill Gurley, Mary Meeker), who have proven this path works.
how would you rank the M7 + Haas in terms of network/placement into early stage vc?
I read a study somewhere that HBS and Stanford alone make up nearly half of all VC partners. The industry is very top heavy and pedigree driven.
Thanks VC. That's what I figured. I'm hoping to land at HSW and think I should be competitive given my stats/background. Do you have any idea how much harder making the jump would be from a lower M7 (Kellogg/Sloan/Booth)?
Appreciate the thread. I have a few questions... 1. In terms of pre-VC experience, do you think it's better to get deep industry experience in one specific sector of technology (specialize in semis / internet / financial tech / software)? Or is a broader (yet less deep) perspective better? 2. Are there big differences between east coast VC's and west coast VC's? 3. How easy is it to move from an IB analyst role on one coast to the other? 4. I've been told that it's very difficult to get into VC post-MBA without pre-MBA VC experience. What are your thoughts on this?
@"Frank Slaughtery" it's harder but not impossible. I think there is a slight regional advantage to each school (i.e. easier to get into a Boston VC from Sloan, Chicago VC from Booth, Bay Area from Haas). It's super important to network a lot since students outside of HBS and GSB won't get as many OCR opportunities.
@"Ventures" to answer your questions: 1. Neither is necessarily better than the other. There are tradeoffs. If you specialize it'll be easier to fit into a firm or group that's looking for your area of specialization. As an example, if you've spend your career at VMWare working on virtualization, you'll be a great fit for infrastructure enterprise roles. However, you will exclude yourself from other opportunities like in consumer Internet. 2. Not really. The stereotype is that east coast VCs are more buttoned up and finance-y whereas the west coast ones are more laid back, but they're all pretty much the same. There is a much bigger cultural difference between seed, early stage, and growth firms, though. 3. I would imagine not super hard compared to moving within a coast. I think it's more about which firms and groups you're latering from/to vs the specific locations 4. That's partly true. It is easier to get into VC post-MBA if you have prior experience, especially for growth stage firms. That being said, it's not like PE where having that experience is a pre requisite. People with strong operating/product experience get good looks as well.
@VC_associate_13 Whoops, for #3 I meant to say IB analyst role on one coast to VC pre-MBA role on the other coast? I've seen it done a couple times, but not sure if this is fairly common or not. I would presume from your response for the b-schools that it's not too common.
Also, as an IB analyst, what's more important for experience for VC? IPO / capital markets experience or M&A experience? Someone's told me IPO, but to me, positioning a company in an M&A process seems to be more applicable, at least intuitively... Am I wrong?
Finally, how often do you see MM / boutique IB analysts in pre-MBA roles at top VC firms? What do you think made them stand out?
Again, thanks.
Yes, IB analyst to VC on a different coast is pretty common. A good number of NY bankers go to SF VCs and vice versa. It's logistically more challenging but doable if you're in a good group.
M&A vs. capital markets doesn't matter. VCs couldn't care less how well you put together an acc/dil model or do an IPO valuation. What matters is how passionate you are about startups and how well you know specific tech trends. Can you talk intelligently about how the Bitcoin ecosystem will evolve in 5 years? What about mobile app discovery? Next gen consumer lending services? What can you say about Docker and containerized enterprise apps? What are 5 seed stage startups we should invest in and why? These are all questions we're asking current associate candidates.
And finally, yes, there are non BB analysts who make it to top VC firms, and that will require extensive networking. Unfortunately most pre-MBA roles are filled by headhunters, who are very biased towards a small number of banks and top groups, so you need to do what you can to 1) get on the headhunters radar, and 2) network with VCs directly. It's harder but doable
VC_associate_13, Thanks so much for doing this. We're very grateful. I always thought that what you do as a buy-side analyst (mutual fund) is quite relevant to investment analysis roles at VCs, despite of dealing with different size/stage of companies and depth of research.
Of course, the skill sets required for analyzing/researching a negative income/startup are very different from the skill sets required for analzying/researching a public company. But wouldn't these differences be minor when compared to IBD roles and Corporate Development roles?
It seems to me that most finance-background VCs come from IBD or Corporate Development. Do you know if buy-side analysts (mutual fund) are of any value to VC firms for recruitment? What can someone in buy-side equity research do in terms of career moves to increase his chance of breaking into VC (any type/stage) ? Thanks so much.
^ It's rare, but I would imagine doable to move to VC if you network well and cover software/Internet. Btw very few VCs are from corp dev backgrounds, unless they did corp VC (not M&A). Most associates are ex bankers, consultants, or PMs.
When you said "Most associates are ex bankers, consultants, or PMs", do you mean Portfolio Managers for PMs?
what blogs / sites do you make sure to read every day?
General tech: Recode, Techcrunch, Venturebeat, Pando, TNW, GigaOM, Wired General finance: WSJ, Financial Times, Dealbook, HBS Review VC blogs: AVC (Fred Wilson), Both Sides (Mark Suster), tomtunguz.com (Tomasz Tunguz), abovethecrowd (Bill Gurley), First Round Review, saastr (Jason Lemkin), chaotic-flow Newsletters: Fortune Termsheet and Datasheet, Crunchbase, Mattermark, Venturewire, CB Insights
This is super helpful, appreciate it. Along similar lines, any book recommendations?
^ Not really. You're not going to learn anything useful and non-obvious about VC from a book. Better to watch talks that VCs and entrepreneurs have given. Those are generally much more insightful and current.
@VC - ya that makes sense, anything in particular to check out?
@"Frank Slaughtery" the Pando monthly talks are pretty good, as are Stanford ETL lectures. There are a ton that are really easy to find. Just search for "venture capital" in YouTube.
@"PARKER153" no I meant product managers. The vast majority of associates are either in banking at a top TMT group (GS, MS Menlo, Qatalyst caliber), MBB consulting (fewer from BCG than the other 2), or product management at a top tech firm (Google, FB caliber)
This helps! Thanks a lot. Sounds like a huge barrier to entry but can't give up though! :)
Can you speak to account coordinator roles at top firms like Google/Twitter/Facebook. Assuming you take one of these roles directly out of undergrad, would you have a shot at pre-MBA VC or would you need to shift into a PM role or even go b-school to reposition yourself?
^ Idk what an "account coordinator" is. Is that a sales/BD position? Going to VC is doable from a BD role, though most have a bias towards people working directly on products
Thanks for the clarity. Account coordinator would be an entry level sales position.
thanks for the great post. i pretty much read through all you answers but not sure if this is covered:
I know people either get into VC as pre-MBA analyst or post-MBA associate. My question is can people get in as post-MBA associate after 1-2 years post-MBA banking in relevant groups? I'm asking this because getting into tech banking post-MBA is much easier than getting into VC for people with no prior operating/banking experience.
^ This is hard. There are 3 real entrypoints into VC: as a pre-MBA associate, post-MBA associate (directly out of bschool), or partner. You could in theory join as a post-MBA associate after a few years as a banking associate, but it would be a step back, and people would wonder why you didn't go into VC directly out of b school.
I'm glad you're still responding to questions. I recently received an analyst offer from an East Coast seed fund with ~ $100 M AUM across 2 funds. I plan on remaining with the fund for at least 2 years if I take the offer. Would I be able to transition from such a firm to a more prominent later stage VC or growth equity position? How would I stack up against bankers and MBB consultants? My alternative is staying at my non-MBB consulting firm and trying to move to MMPE or growth equity.
I do internal strategy consulting for what I would consider a Tier 2 Tech Firm (Think IBM, Pinterest, Salesforce)..how easy will it be for me to transition to a early-stage VC?
To add on, separately, suppose I have previous VC-esque experience from college (working at an accelerator, PE/banking) in addition to the above experience...how competitive am I even though I haven't done PM @ Google/FB, or MBB or top BB banking.
What should my next steps be to better position myself for a switch?
Thanks for answering, really appreciate it!!
How impactful is HBS/GSB? I'd imagine this gives you a little credibility and an easier networking intro to alumni at VC firms, but the industry is so small and so few MBAs from these schools make it in each year. Can you give any sense of whether hoards of these students are being turned down and go elsewhere or if the people who actually want it and work at it have a realistic chance? Clearly your pre-MBA experience has a large bearing on whether you might be qualified or inclined to recruit for VC, but in general is it feasible?
HBS/GSB are incredibly impactful. It's of course still challenging to break into VC coming out of bschool, but it's a more set path than trying to break in randomly from industry if you're not in banking. Some crazy % of VC partners have MBAs from those 2 schools. Also, those roles are usually partner track, which 99% of pre MBA roles are not.
Given my background what do you think are your thoughts of breaking into an early stage fund?
Graduated from top 20 USNews undergraduate school, Econ (2014) Have been working concurrently in strategy and operations consulting and an early stage funded startup doing a variety of tasks: discussing strategy and project management
Given my background what do you think are your thoughts of breaking into an early stage fund?
Graduated from top 20 USNews undergraduate school, Econ (2014) Have been working concurrently in strategy and operations consulting and an early stage funded startup doing a variety of tasks: discussing strategy and project management
^ It seems like you have a decent profile, but hard to tell exactly without knowing specifics. By top 20 school, do you mean something closer to Harvard or something like Johns Hopkins? There's a big difference between the top 5 schools and #20. And in consulting, are you at McKinsey, Bain, or BCG? If yes your chances are significantly higher than if you are not. You have a solid profile from the limited information you gave but without knowing more it's hard to tell.
Thanks for doing this. My profile: top ranked analyst at top group and top BB (think GS TMT, MS M&A, BX R&R, etc.), London based, computer science background in university. I would like to make a move to Menlo / SF to work in VC. I'm passionate about a couple of hot tech verticals, so I think I could stand my ground in an interview. What is the best way to try and make the move? Have worked in Menlo for a few weeks as part of a client engagement, and wouldn't need a Visa. Any comment welcome.
^ If you're in a top BB group & are a top bucket analyst with a CS degree you should have no problem getting interviews for at least later stage VCs. The only complication is being in London, but if you're in a top group that shouldn't be too much of a barrier. If you haven't heard from VC headhunters yet (Glocap, CPI, and Juno are the primary ones), you should ask your peers in the US to intro you to them.
You going to CES?
What are your thoughts on this piece?
https://hbr.org/2014/08/venture-capitalists-get-paid-well-to-lose-money/
Average VC returns are bad, that's a fact. But VC as an asset class shouldn't be viewed in the context of mean/median returns. There's a very steep power law. The top funds will consistently outperform the rest by a huge margin. It's a byproduct of the power law of exit values. The top 10-15 companies make up something like 90% of all venture backed exit value. Facebook alone was nearly 80% of all exit value in 2012; Alibaba was a huge % in 2014. If you're in 1 or multiple of those super exits, you're golden. The top funds continually get early access to these best deals because of their reputation and network, so there's consistency to their outsized returns. Sequoia, Andreessen, Benchmark, etc have done well in every fund.
Outside of the top funds, yes, it's a crapshoot. Some guys get lucky once or twice, but in aggregate those VCs don't usually survive past 1-2 funds.
Do I think VCs are overpaid? Yes, as are PE guys and hedge funds. The 2 and 20 rule was invented at a time when average funds were an order of magnitude smaller than they are now. 2% of a $50 fund can support a couple partners, maybe a few secretaries, some office space, and T&E, but they're not gonna make tons off of that alone. Now VCs are way bigger. Billion dollar funds are relatively common. Partners make millions a year just in base salary, outside of carry. I absolutely think that's excessive, but I don't see that going away anytime soon since it's become such a norm of the buyside industry.
Hi
I am interviewing with few VCs. My question is how do you convince interviewer you turely like this industry and want to stay for the long run. My previous job is in IBD non-TMT and a coporate job also in non-TMT.
any advice on building up a twitter presence and investing via angellist?
Thanks for replying. I have one more question. What are the "Don't ask" type of questions in your interview? One of my VC(healthcare non-TMT) friend told me not to talk about their previous investments, he said VCs don't like to talk about what they have already done.
More questions on valuations. Does 1yr forward Price/Sales or Price/User usually increases as the rounds evlove? Is 10x P/S the rule of thumb for IPO in internet industry (excluding lending club which trades 20x)?
Can you speak a little about PMs? You mentioned earlier it was one of the paths to transition to VC -> what if you're a PM but don't work at a Google of Facebook, but at a decent venture backed company? (i.e. Urban Compass, Digital Reasoning, etc.)? Do you recommend going through this path or going to b-school?
^ if you want to do early stage VC, this could be a good path depending on the quality of the company. If you want to do late stage VC it would be better to get an MBA
@"VC_associate_13" I have a non-technical background, coming from a hedge fund, going to MBA later this year (hopefully Wharton / Booth), no specific tech experience.
In the Bay/SV, where do you see guys like that have the most success (generally speaking, not exclusively VC)?
A partner from Sequoia once told me that the best experience for me to try to get will be operating experience at a big brand name company (e.g. Google, Apple, etc.) and then opportunities will just open up for me. I'd be interested in your thoughts on that.
"Operations" / "Operating role" seem like pretty nebulous terms for me, what would those roles look like for a guy like me?
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