Venture Capital as Pre-MBA experience

I am going to complete my undergraduate studies (in the UK) and have the opportunity to be an analyst at a solid venture capital firm in London. I was wondering whether an MBA at a good US university would be in the cards with that experience. I realise that there are many other factors but assessing this one, do you think it would be a positive experience

Thank you

Comments (32)

 
Jan 31,2016

Probably, but depends on what you make of it: source some great deals and you'll have a great story to tell for b school.

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Jan 31,2016

Business school programs 'bucket' their applicants.

If you're an investment banker, your application is compared only against the pool of applicants with work experience analogous to your own. You don't compete against the non-profit kid, the management consultant, the military veteran in his 30s, or the retired professional athlete.

This helps the admissions committee compare apples to apples. This is where caliber of prior educational institutions, grades and test scores, prestige or brand-name of employer(s), level of civic or philanthropic involvement, 'hooks' (being an under-represented minority, first-generation college student, physically handicapped, LGBTQ, etc.), warmth of recommendation letters, whether your recommenders are alumni of the school or objectively famous people with a lot of acclaim, unique professional accomplishments within your previous roles, and other similar things all start to become factors.

For instance, the investment banker who spent two years at Wells Fargo before moving to join Huron Capital Partners gets beat up in the admissions cycle relative to the guy from Morgan Stanley who moved to Bain. The nonprofit kid who spent four years in inner-city New Orleans at a little known NGO with a tiny budget loses relative to somebody who did two years in a strategy role at Habitat for Humanity before moving to the Harlem Children's Zone. The consultant from ATKearney who then moved to an industry role at a lower F500 firm fares worse than the McKinsey kid who moved on to Coca-Cola.

In summary, you need to think how attractive your profile is relative to other junior VC employees thinking about business school. They tend to come from Stanford, Harvard, or Wharton. They tend to have higher grades (your system is different; get a first and you're fine).

Beat or compete with them on all that, and fill out your profile. Get some compelling nonprofit or civic board (or junior board) positions. Above all, crush it at work. If you lead your firm into deals that you can list on your resume as home runs ("exited at 56x MOIC after securing PS60m in further financing from prominent co-investors including Balderton, Advent Ventures, and Index"), you'll stand out.

The real question is why you'd even want b-school at that point. If you're crushing it at work, don't stop printing money. If you want to transition to U.S. VC, people will care more about your track record than your educational credentials. If you're trying to go back to Europe, why on earth do you want an MBA? The City doesn't value them that much. I don't think the continent does either, and when they do, it's INSEAD or LBS.

 
Jan 31,2016

Thank you for the insight and advice, I appreciate that you took the time

 
 
Jan 31,2016

Getting into Bschool is about spin...saying you're from VC, you have a lot to pitch about yourself (going to the board, meeting entrepreneurs, etc); you're in a small population group also making you inherently attractive...i've met a ton of no-name VCs who've gone through HBS, Stanford, Wharton...just get over 700 GMAT and you should be set...

 
Jan 31,2016

It's hard to imagine that you wouldn't get into a top 10 b-school after 2-3 yrs at any VC, as long as it's legit and you're actually making investments. Whether you're Harvard or Stanford material will likely depend on the rest of your profile - did you join the VC firm right out of ugrad? any other work experience? are you an analyst or associate? Have you really added value to the firm in terms of supporting current portfolio companies, sourcing, diligence, helping to build their rep, etc?

 
Aug 31,2018

Do you consider Plug and Play Tech Center to be legit?

 
Jan 31,2016

Interested in this thread as well.
The VC I did an internship at is unknown beyond a tank of gas in any direction, but it was an incredible experience. To me it seems most VC firms are unknown to anyone except the big players in Northern California, so it shouldn't be a big deal. The first comment about spinning for MBA admissions really rings true.

"You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right."

-Warren Buffett

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Jan 31,2016

sorry to be off topic, but what kind of payment start-ups does your company invest in? I'm actually working at a an online payment start-up now and we're thinking of going the vc way.

pm me if you'd like.

 
Jan 31,2016

Go to Stanford b school and people will drop on their knees to suck you off

 
Jan 31,2016

VC is very highly regarded work experience as far as business schools are concerned, especially as it is typically more difficult to gain entry into the industry right out of undergrad compared to ibanking and private equity.

of course, as usual, this is only one piece of the puzzle, as the pedigree hurdle youll have to overcome still exists (ie, clearly you did not work at KKR).

lastly, i think bschools would view the transition you speak of as a natural outgrowth of your vc position (i personally believe an operations management role in a small business allows you to accumulate a huge range and depth of experiences). in fact, your path sounds like the beginnings of a good story to sell for your admissions essays.

 
Jan 31,2016

to the OP, VC looks good for bschool, simply for the reason that its a prestigious industry that's hard to get into (in general)

However, to have a successful career in the long run, you definitely need the operational experience as well, so your plan is very good...go to a startup for 2-3 years.

the reason is that the skills you gain in VC are mainly soft skills, not the hard technical, operational, or tangible skills so crucial early in your career. This is exactly why most senior folks in VC got here later in their career thru entrepreneurship or ibanking. You will never see a successful VC guy who has only done VC and academia, they've always done somethign else.

 
 
Jan 31,2016

So your question comes down to: should I trade off prestige for the sake of lucrative / learning opportunity? As someone who just went through b-school applications, I completely understand the fear. Despite that, I'd say you should* join the VC firm.

I'd offer a couple of reasons:
1. Implicit in your question is an assumption that you have / think you can get other high prestige opportunities. That + your BB job + your current offer means that you probably have strong credentials and/or pedigree to begin with. This won't disappear when you apply to business school: you'll be a very strong applicant right off the bat for all the same reasons you're a strong job candidate now.
2. Could you be a stronger applicant if you took on an even-more-prestigious job after BB? Yes, but probably not by as much as you think. B-school adcoms think about this very differently than us neurotic, type-a forum dwellers. Sure, they'll note the lack of the brand, but it'll just be one note in the context of your essays, your recommendations, your experiences, etc. If you make those other factors strong enough, it will overwhelm the brand difference. Give them a another reason they NEED you in your class for a diverse perspective.
3. I suspect VC firms aren't on the radars of b-schools much anyway. B-schools know Carlyle because Carlyle sends them two dozen top-notch applications each year. A place like Accel probably sends an applicant to HBS / Stanford once every two or three years. So even great VC firms often aren't on b-school admission radars. Remember, your application will probably get read by a 30-50yr old woman with a liberal arts degree. (OK, so they may be aware of Accel... and maybe Sequoia / KPCB, etc., but not too many others).
4. The biggest reason you should do it is because you're young and should be optimizing for learning things over absolutely everything else (pay, b-school shots, etc.) in the known universe. The stuff you put in your brain now accumulates compound interest for a long, long time, so put as much in there as possible! Your long run career will depend on this way more than whether you end up in HBS or Wharton or Columbia.

Again, as someone who was recently in your shoes, I sympathize. In my case, I left a highly regarded PE/VC gig to join a little known startup, and I wasn't sure what the consequence would be for b-school (which I knew I wanted later on). The way I tried to mitigate was tell a continuous story of interest and career progression where (a) it made sense why I'd take a prestige drop given my interests, and (b) it was clear that the level of exposure I got in my new role was far and beyond what most b-school applicants got. That approach worked for me, but even if it hadn't, I'd still re-join the startup given the incredible amount I've learned.

* "Should" if you buy what the VC firm is telling you about their track record. Be careful: VC can be a brutal industry for all but the top 10-20 firms (simply because deal sourcing can be so difficult), and a big part of why so many smaller VCs have succeeded is that they're supreme bull shit artists with their LP base (not sustainable).

 
 
Jan 31,2016

Tough call, in a similar position as you and I'm gonna bump this a bit as I'd love to hear from people with more experience.

 
Jan 31,2016

I'm still an analyst but here is my tentative plan:
1) 2 years analyst VC
2) 2 year associate position in either VC or PE
3) MBA
4) Stay on the buy side as VP+ positions at certain firms finally start to give carried interest.

Like I said, I'm pretty young in the industry but I have a good number of family/friends in VC/PE that have done the following:

1) What my plan is

2) Depending on how talented you are -- I know a guy who graduated 1st in his class at a top 10 undergrad business school. Worked at Boston Consulting Group, then Bain, now VC. Never did an MBA but is constantly moving up the ranks. I've heard his mentality is that an MBA isn't worth the time currently.

3) If your not 1st in you class like most of us, I have a friend who did 3 years IB, then VC Associate program, unfortunately didn't get into top 3 MBA's so just decided to continue working his way up the latter. Mind you he had kids by this point and couldn't justify the opportunity cost.

4) A friend started out of undergrad in a start up, stayed there till his MBA. Jumped to a VC/consulting shop in the VC component post MBA, 2 years later moved into their consulting component for start up tech. Finally he has ended up at a family office as head of their investments.

5) A lot of guys jumped into MM PE funds or the M&A division of strategics similar to the VC they worked for. Ex: Heathcare VC Associate --> MBA --> UnitedHeath M&A

Hope those examples helped a little. Like I said, I'm still young in VC, these are friends/family experiences.

"If you want to succeed in this life, you need to understand that duty comes before rights and that responsibility precedes opportunity."

 
Jan 31,2016
TheBigBambino:

I'm still an analyst but here is my tentative plan:
1) 2 years analyst VC
2) 2 year associate position in either VC or PE
3) MBA
4) Stay on the buy side as VP+ positions at certain firms finally start to give carried interest.

Like I said, I'm pretty young in the industry but I have a good number of family/friends in VC/PE that have done the following:

1) What my plan is

2) Depending on how talented you are -- I know a guy who graduated 1st in his class at a top 10 undergrad business school. Worked at Boston Consulting Group, then Bain, now VC. Never did an MBA but is constantly moving up the ranks. I've heard his mentality is that an MBA isn't worth the time currently.

3) If your not 1st in you class like most of us, I have a friend who did 3 years IB, then VC Associate program, unfortunately didn't get into top 3 MBA's so just decided to continue working his way up the latter. Mind you he had kids by this point and couldn't justify the opportunity cost.

4) A friend started out of undergrad in a start up, stayed there till his MBA. Jumped to a VC/consulting shop in the VC component post MBA, 2 years later moved into their consulting component for start up tech. Finally he has ended up at a family office as head of their investments.

5) A lot of guys jumped into MM PE funds or the M&A division of strategics similar to the VC they worked for. Ex: Heathcare VC Associate --> MBA --> UnitedHeath M&A

Hope those examples helped a little. Like I said, I'm still young in VC, these are friends/family experiences.

does doing an IB analyst stint give you an advantage for getting an analyst spot for VC, or is it just as easy to go straight from undergrad to VC?

 
Jan 31,2016
idrankmalk:

does doing an IB analyst stint give you an advantage for getting an analyst spot for VC, or is it just as easy to go straight from undergrad to VC?

Yes it's easier. A banker will have more skills and if they covered a similar industry they will bring a network with them.

Getting in from out of college is very difficult but sometimes possible depending on the fund.

"If you want to succeed in this life, you need to understand that duty comes before rights and that responsibility precedes opportunity."

 
Jan 31,2016

Obviously it's an advantage...who would you hire: undergrad student or 2 year IB analyst?

 
Jan 31,2016

Great thread. I am an associate at a top European VC firm after a few years of strategy consultancy and will share my views. I will get carry starting next year. I haven't gone to business school and am not planning to. Interested in hearing other people's experiences as I'm also quite new to VC and haven't really found much information, not even here on WSO, on how careers develop in this field. That said, paths I've seen are:

  1. After a few years as an associate, co-found a startup or join one some time after founding to support the current management team and scale the business (these positions come with equity of course)
  2. After a few years as an analyst or associate, move on to another fund (mostly other VC, some growth equity, more rarely buyouts - banking exp pre VC seems to help here) or a family office (which can be incredibly great if you find the right place) for better 'title' and comp.
  3. Staying on. I know a few guys who've been at their funds through what would be the VC equivalent of analyst, associate and VP levels at banks, hoping to eventually make partner, yet can't really think of anyone (again my sample size is still quite small) who's done all this at just one firm.

Personally, I am interested in path 3 at this stage.

For those interested in getting in, it seems the best paths are interning during your undergrad and converting to FT, alternatively a few years in consultancy (should really be a top firm with relevant sector and functional expertise). I don't think IB gives you an ideal preparation for this job as this field is heavily emphasising qualitative aspects during diligence, and a mix of strategic and operational issues after an acquisition where previous consultancy experience may help a bit. That said, I know a few associates that have come out of IB, so still seems to be a viable route in.

 
Jan 31,2016
 
Jan 31,2016

Bump, would love to hear from more people in VC

 
Jan 31,2016

Bump again, any pre-MBA's considering corporate development, product management / business development at a start-up, founding their own start-up? It's tough to make partner without leaving the VC world to gain some operational experience, although at the same time there have been some people that have done it...curious to get some other people's thoughts on this.

 
Jan 31,2016
 
Jan 31,2016

Post MBA, it seems like Corp dev or mgmt positions in startups or growth companies is what people end up in quite often if there isnt a direct path to partner in your firm or elsewhere. Switching to PE also possible but you need later stage experience.

 
 
Jan 31,2016

sounds like you already have a great job offer, whats the rush?

 
Jan 31,2016