My startup failed. Is it possible to break into VC as a former unsuccessful founder or do I need an MBA?

I started a company my senior year of college in the CPG food space. Long story short is we spent a lot of time and money in R&D and by the time we launched Covid-19 hit and everything went downhill from there.

 

My startup was largely unsuccessful from a sales standpoint, however we did accomplish quite a bit and it is a very sellable story. I'm very interested in getting into VC, specifically a firm with an Ag-Tech focus because I know the space. I have a finance degree from a non-target and a not-so impressive GPA. 

 

Is it possible to freshen up on my modeling skills and recruit for VC analyst positions or should I try to get into a decent MBA program and recruit out of there? I appreciate any insight. 

 

Thanks

Comments (11)

 
Aug 20, 2020 - 12:08pm

For the only funds worth joining...usually you need have raised a significant round or grew the co to $10M+ in rev quickly to do so. 

 

 
Aug 20, 2020 - 12:13pm

Thanks for your comment. Can you elaborate on what funds you're talking about? For example, there are a lot of boutique shops in my city. Is there significantly less comp or prestige at these shops? Is the recruiting pipeline the same for boutiques as megafunds?

 

It does seem that my story would be more attractive to MBA admissions rather than a VC firm considering I have no deal experience.

 
  • Analyst 2 in IB-M&A
Aug 20, 2020 - 3:36pm

I don't think I have anything helpful that would answer your question but want to follow this thread. I'm leaving IB after almost 3 years to go focus on my own startup and hope that I'll have the option of returning to the industry should it fail. A little different from your situation since you launched your thing right out of school but hoping you can find your way into the job you want.

 
Aug 20, 2020 - 4:05pm

Would you consider CVCs?

- there are various CVCs in many industries, and some will understand the subject matter / what you have tried in your company

- CVCs are less competitive than larger funds, but give you the experience you need to make a move afterwards

- the people I have met in CVCs are quite "open minded" and might like your background; the fact that you went out and tried something is useful knowledge

  • 1
 
Feb 15, 2021 - 2:17pm

Hey man, just wanted to follow up and thank you for the advice. I ended up landing a job in strategy/CVC and I'm really enjoying the work. Thanks

  • 1
 
  • Associate 2 in VC
Aug 20, 2020 - 5:52pm

First of all, I'm sorry your startup failed. That's always tough. But I'm sure you learned a lot from the experience.

As for breaking into VC, former entrepreneurs who break into VC generally are successful ones with exits. Sometimes, entrepreneurs with failed ventures do break in, but these are high-profile folks who've raised large amounts of capital for a "hot" startup. They end up working at one of the firms that backed them, either as an investor or an EIR (which might eventually convert to an investor role).

Since none of these cases really apply to you, you likely won't be able to break into VC right away. But, there are a couple ways through which you could down the road. You can join an early-stage startup that ends up growing fast (which shows you can pick winners) or get into a product role in Big Tech. Combined with your entrepreneurial background, either of these paths could get firms interested in your profile.

Or, like you mentioned, you could get an MBA. But breaking in with an MBA is still hard - if you can manage to do it without an MBA and you want to stay in venture long-term, that's probably the best outcome.

 
Aug 21, 2020 - 6:14pm

Breaking into VC is tough. It's significantly more competitive than any other area of finance. Not because the calibre is people is necessary higher - but because the model isn't scalable and there are consequently very, very few entry level positions.

Broadly there are 2 ways to break into VC at entry level:

1) Startup experience route: generally founder or co-founder of a venture backed startup or senior employee of a well funded growth company (or corp dev at FAANG). You'll need to show that the firm is credible and generated some traction and should have a deep network that you can leverage for deal sourcing - particularly in your vertical.

2) IB/consulting route: a few years at BB/EB or MBB - almost certainly with a TMT focus. These people almost invariably have built networks with startups. To that end some people on this track do an MBA - but its increasingly seen as irrelevant in the industry. Given that the value for VC is brand & network - if it's not Harvard/Stanford/Wharton I wouldn't bother.

Ultimately, VC is a relationship business: if you have VCs in your network (so you can actually find out when firms are recruiting - most VCs have no standard hiring cycle and probably won't even publicly post open positions) and can show your ability to source quality deals - you may be able to pull it off, but honestly I think it's unlikely.

If VC is the dream, I would forget about the MBA and double down on your operating experience: leverage that to get a great role at a promising venture backed startup. Build your network, learn skills you can leverage for your future portfolio companies, and become known as an expert in your vertical.

 
  • Associate 2 in VC
Aug 21, 2020 - 6:47pm

Very valid. But, OP, do be careful not to get into the platform team track if you want to source and invest in deals. It's very easy to be pigeon-holed into being the ops guy, and it could prove difficult to break into the investing side from there. Senior platform folks can be involved in the investment process but it's harder for them to be promoted to GP.

 
Aug 21, 2020 - 10:03pm
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