How to Get a Job in VC
First, it’s good to start with the assumption that there are no jobs in VC and purposefully joining a VC is improbable. Very few VCs post open positions and run a hiring process. Almost all hire through their networks and relationships on an opportunistic basis. Almost all hire people they know, trust, and have worked around for many years, or candidates who come highly recommended from such people. There are less than a thousand firms, and nearly all of them are very small teams. The ones that manage a lot of money are very guarded, and don’t have that many team members either. There are maybe a few thousand people that work in VC in the US, maybe double that globally. There are probably less than a thousand new hires in VC on any year, but somehow it’s become cool so smart young people are interested these days. The demand for jobs radically outstrips supply.
Second, the old model of VC suggested it was an “apprenticeship business,” but the new model is “anything goes.” The norm used to be to get hired at entry level out of business school, learn the dark arts and the ropes and then get welcomed into an exclusive guild. This isn’t true anymore. Entry level positions such as analyst or associate are generally temporary roles, and people are encouraged to go into operating positions. People are now joining or starting venture firms through all kinds of unexpected ways. It’s largely dependent on timing, relationships, and serendipity.
Here are some patterns I’ve seen, and most people that have ended up in VC did so unexpectedly and through a combination of the following:
The paths you might have control over:
- Become a sought-after person in a domain of relevance to an up and coming industry. This can involve providing thought leadership that becomes visible, or doing deep research on something erudite and technical, or helping so many entrepreneurs in remarkable ways that a large network of people start introducing you to entrepreneurs starting companies in the domain of your expertise. VCs then hire you for your dealflow and access.
- Bring investable capital to the table for an up and coming VC that you’ve built trust with. This sounds unlikely but that’s what makes it possible. You may have access to a family office, an institutional investor, a foreign pool of capital that wants to get into VC. In the meanwhile, be helpful to an emerging VC by doing a few projects, refer them entrepreneurs, write market briefs, or help with diligence or events. If you have their trust and can show up with $20M or more, odds are that an emerging manager would be happy to have you join and hope you learn the ropes.
- Build your own angel investment track record with whatever you can scrap together, keep track of it, and make a strong impression on the entrepreneurs and co-investors. If you get into a high-growth company early, you’re golden and you can even start your own firm. If you have returns with an IRR of above 15% or a net multiple above 3X, you can show that to a firm and join in an investing role, or you can even raise a little fund of your own from LPs willing to take bets on new managers and small funds.
- Get into top-tier networks that will generate the next generation of entrepreneurs. The usual Stanford, Harvard, Carnegie-Mellon (totally unhelpful) advice falls within this bucket. You don’t have to go to these schools, you just need to be in networks of entrepreneurs. You can go to events. You can join membership networks like Young Entrepreneurship Council or Sandbox. It doesn’t really matter where you find them. But join groups and go to events until you find an environment that seems to be full of brilliant, visionary people that want to build great companies.
- Come up with a unique, contrarian, timely, and memorable thesis, do your homework and become an expert, write reports and blog, and keep at it until people start to think you might be onto something. When VCs start to contact you about it, tell them you might be open to working with them.
- Participate in VC-like activities. Work with an angel group sourcing deals, work with an accelerator or incubator, help run a student VC fund, or help host industry events, hackathons and startup weekends.
The paths you likely don’t have control over:
- Start a company that gets attention. Go through the founder ups and downs. Develop intuition on company creation and company building. Gain remarkable trust with your own investors by handling the ups and downs with poise. When the company crashes or sells, work with your own investors.
- Start a company that makes money. Bring in your own money as a GP commitment, and co-found a firm or join a firm that you’ve built trust with.
- Have key, early operational roles at the up and coming generation of high-growth companies. Worked at AirBnB and Uber and Dropbox? Come on in! You must know how to pick them!
- Work in consulting or investment banking and gain muscle memory for rapid materials generation. Work in industries or on transactions that are in emerging industries. VCs generally have to write investment memorandums, make internal decks, rebuild financial models, perform due diligence, or perform similar workflows and create similar deliverables. If you’re good and fast, and have original thoughts in the process, VCs will want you on their team because they can’t make the time to do this without top-notch help.
- Work in transactions and get close to the details. Be a corporate or transactions lawyer, work for a broker or investment banker. Sell or buy side, get deals done. Price. Negotiate. Go through redlines in mind numbingly long and boring legal paperwork and accounting. Know how to get messy, complicated deals to the finish line. Bonus points if you help take a company public.
- Develop a credible, relevant biography and make a firm look good by hiring you. This is vague, but VC needs to make and leave an impression on LPs and entrepreneurs quickly. So, personal story matters. “We invest in energy storage, and Rebecca here invented a new type of low cost battery as an undergraduate.”
- Serve time at the acquirers. In every sector there are a handful of incumbent companies that actively acquire venture backed companies. If you have a strong network at several and know how they think and operate, that’s highly relevant to VCs.
Hope that’s helpful!
In context, I joined Learn Capital as a Partner after starting a visible company, helping a few other companies at the founding stages, referring many entrepreneurs to the Learn Capital, going to too many industry events and having too many coffees, and making a few angel investments. I was a Kauffman Fellow, Class 20, and created the Fellowship program at Learn Capital.
