Becoming a Venture Capitalist is a career path that attracts more and more business school and engineering graduates, mid-level tech executives, and exiting startup Founders. The good news? As the VC asset class matures, there are more Venture Capital jobs than ever.
What does it take to succeed in VC?
I’ve been training Aspiring VCs and Junior Investors for over a decade. Here are the 3 most impactful steps you need to take to nail Venture Capital job interviews and accelerate your way to the coveted partnership level.
1. Build A VC Mousetrap To Get Venture Capital Interviews
The first step to your successful VC career is to get a foot in the door. The problem is that Venture Capital jobs are rarely advertised publicly, although that is gradually changing—at least in some countries.
Another issue is that, while there are more jobs in Venture Capital relative to previous periods, they are still relatively scarce in absolute number.
Besides, they recruit at varying levels according to their fund’s development stage: Venture Capital firms are more likely to hire partners when launching a new fund, and entry-level professionals right after the fund is closed.
The 100 most active US Venture Capital firms account for 38% of deals done.
Source: Crunchbase
It seems that the power law distribution that characterizes VC returns holds true for Venture Capital jobs, too. The most active funds in terms of investments done account for the bulk of hires. There is more demand that supply in the Venture Capital job market.
Given this situation, your objective as an Aspiring VC (or as a Venture Capital analyst or associate looking to change firms) is to be top-of-mind at potential hiring VC firms.
Fun fact: the techniques honed by fundraising startup Founders to contact Investors and get money can be harnessed to build the said mousetrap.
But it is the most effective way of obtaining interviews at reputable Venture Capital firms. You need to build an inescapable mousetrap for Venture Capital jobs so that the next opening at a Venture Capital firm on your wish list falls on your lap first.
2. Demonstrate Your Combat-Readiness To Hiring Venture Capital Firms
The Venture Capitalist career path has become so competitive that you need to make sure you stand out in the masses of applications received by recruiting investment firms.
One example I often use when I train experienced professionals who want to get into mid-level positions at Venture Capital firms is that they wouldn’t themselves hire someone in their current companies who doesn’t show strong motivation and has at least basic knowledge of how their industry works.
The same applies to Venture Capital.
Twenty years ago, nobody really knew much about this secretive asset class. If anything, we are now experiencing a totally opposite situation. There is so much information out there, many of which produced first-hand by active Venture Capitalists, that it has become difficult to make sense of it.
There is so much to learn, however. How do you get to that point?
After years of training individuals at various levels to break into Venture Capital (as well as Private Equity and M&A), my take on the learning process is unequivocal:
- The basic theory must be presented in a dynamic way with concrete examples
- You need to hear Venture Capitalists repeat the same concept and show how it applies to their daily tasks
- Only active practice will ensure you integrate newly-acquired knowledge
It’s with these principles in mind that I spent a good chunk of the last four years building a unique curriculum to help Aspiring VCs break into Venture Capital, but also so-called “Junior VCs” (anyone with less than three years experience on the job, whether they got in at entry-level or at a higher position) accelerate their career path.
The VC Career Accelerator program is built around weekly live sessions with myself and other participants, who all bring their perspective, particular angle, and field anecdotes to enrich the dialogue.
We cover all the bases useful for a successful career in VC. For example, we watch real-life startup pitches and analyze them as we would in an investment committee at a Venture Capital firm.
To make the discussion meaningful quickly, you also have access to vide-based online modules covering a particular aspect of the Venture Capital job. Here’s how the program is organized:
- What Do VCs Do: this online module (60 units, 40 videos, 6 quizzes, 1 assignment) covers all the steps in the VC cycle, with a specific focus on generating deal flow, evaluating startups, and monitoring & exiting portfolio companies. You will produce an Investment Deck that we’ll discuss during our live session
- How VC Funds Work: a live session to understand how VCs deploy capital, and how they make money (we go into the details of management fees, carried interest, and hurdle calculation). We cap the session with a workshop centered around our proprietary VC Fund Financial Projections template, which allows you to build your own fund and defend your investment strategy as you would to a potential LP
- Startup Cash Flows & Valuation: during this live session, I go over basic accounting notions needed in early-stage Venture Capital, with a focus on cash. I also explain what Investors are looking for when they analyze startups’ financial projections. Each participant then builds their own case study based on our Startup Cash Flow Forecast template and applies the Venture Capital Valuation Method to defend a valuation to other participants
- Preferred Shares & SAFES: we look at the mechanics of these tools most used by Investors and illustrate what their comparative pros and cons are with concrete real-life examples
- Negotiate VC Term Sheets: this online module (50 units, 25 videos, 6 quizzes) is the prelude to a live session focusing on the reasons all these clauses exist, what risk they are meant to cover, and how you can negotiate them optimally with startup Founders
- Startup Boards: an unparalleled online module (40 units, 20 videos, 4 quizzes) to share best practices from the best Venture Capitalists out there, also highlighting what risks you take, and how to become a valued Board member. I also profusely share my observations from having sat on Boards for over a decade. To my knowledge, there is no comparable training material elsewhere in the world.
I’ve patiently built this unique curriculum for the best part of four years and tested it with dozens of students from the HEC MIF program (ranked the #1 Finance Master globally for 10 of the last 11 years) as well as active Junior VCs. Since the online modules went live in the spring of 2021, dozens of participants have confirmed its quality and practical use to get a Venture Capital job.
The VC Career Accelerator program has been a critical resource to help our Junior Investors get better on the job.
Mike Mompi (Enza Capital)
You can apply to the VC Career Accelerator here. The core program lasts 8 weeks but you can join at any point in time, as I run live sessions all year-round. Participants who graduated from the program are always welcome to join future sessions and network with the new batch’s professionals.
3. Grow Into The Partner Role From The Start
In most Venture Capital firms, roles within the investment team are distributed according to experience levels. Junior members tend to focus on deal flow and rarely negotiate term sheets or sit on Boards. These tasks are reserved for more senior members. At the top of the chain, senior partners also raise funds with potential Limited Partners.
The problem is, Venture Capital is an experience-based business. The more deals you’ll do, the more failures and successes you’ll be exposed too, and the better you’ll become.
How do you accelerate this natural learning process?
I use practice-based learning to train professionals who recently joined a Venture Capital firm in an investment role. We focus on more technical stuff like term sheets, preferred shares and SAFEs, as well as how to prepare a compelling Investment Deck.
But we also share experience and best practices on soft skills such as how to conduct themselves in an Investment Committee and in a Board meeting.
Promotion to Venture Capital partner is mostly decided on how larger you can make the cake for the other partners, which is a function of how good you are at catching the best deals plus your ability to raise funds with potential fund investors. Acquiring technical knowledge and learning the tips and tricks from more experienced Investors will take you faster through the path.
That’s the critical advantage of e-mentoring: guiding you in a personalized way to achieve your goals.