A lot of people have been asking me what it takes to get into a VC firm. Few pointers:
- At an analyst level, most firms are looking for smart people, perhaps with some background in equity analysis or business analysis. It is not unusual to have fresh MBAs with some pre-MBA work experience to be considered.
- Different firms have different views on whether analyst position is a career track position or not. A lot of firms see this as a 2-3 year relationships. Some firms believe that analysts can graduate into leading investments.
- At a senior level, different firms look for different profiles. Somewhat later stage focussed firms are happy to look at people from equity and business analysis, consulting or investment banking backgrounds. A lot of early stage firms tend to want prior entrepreneurial or strong operating backgrounds. There are no simple rules here.
- VC business is a highly reference driven business, and there are very few openings. So make the right approach and engage early in the cycle.
- Different firms have very different formal and informal decision structures – understand them well before you jump in.
Many VC firms are setting up their presence in India, and hence there are perhaps more opportunities than would exist in stable state. Amongst the US venture firms, there are two approaches. Some firms want people to join in US, work there for a year or two, do a couple of deals by travelling down, and then take a call on whether they want a full time person in India. Other firms, such as Canaan, look for people who have the network and operating/entrepreneurial experience in India to directly be part of the India team.
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Old Hand ,
I would like to know how does one evaluate such things before joining a VC firm? I think these things can only be evaluated after someone has joined and has spent some time in the firm. Let me know your thoughts on it .
here is a relevant post
http://www.venturewoods.org/index.php/2006/12/01/guys-venture-capital-aptitude-test-vcat/
Hmm, interesting thread. Here are a couple of perspectives:
* A lot of VCs in India (or for that matter globally) are first time VCs eventhough the VC business as a whole is approx 12+ years old in India. The VC business has a chronic case of of herd mentality and it is also a puppet in the hands of global economic sentiment. The firm an analyst joins, may or may not ultimately remain one of the leading lights in the business (regardless of how much glamorous branding it may be doing today). As an analyst and if you want to become a VC over long term, think really hard who your firm is, where it is going, the people, and the quality of deals they are doing.
* Evaluate VERY WELL the partners who are running the firm as they pretty much hold the keys to your future. If they are first-time VCs (especially with no entrepreneural experience), or evaluating deals based on perception rather than rigorous analysis, showing strong signs of herd mentality, not doing enough risk management or proactive monitoring of ventures, ask yourself whether you want to start off your VC career with such a team.
* Finally, if you want to be VC over the long term AND if you have ONLY i-banking, consulting, or large-corporate background (no matter how senior), don’t even think of a VC career until you have done one or more startups. A startup is the toughest and the most “right” learning ground for a future VC, regardless of whether it succeeds or fails. So have some patience and do a startup for 4+ years. (That will only increase your marketability in the VC world). To add some spice to the experience, I’d recommend the startup should be “self-funded” for at least a year 🙂
Hi Alok
Just wondering are there part-time opportunities available too in this area for a start-up entrepreneur? after resolving the conflicts of interest?
For example, I may be interested for hourly basis and needs basis arrangements for technology assessments and possible platform/product innovations. My profile is available in venturewoods.
Hi Alok,
Nice post. I have been following this blog for sometime now. I just have a question regarding “enterprenuers” joining a VC firm. Does an enterprenuerial experience help even if the the enterprenuer has failed in his endeavour? My question might sound a bit naive but as a future enterprenuer I do get lots of questions like these in my mind.