Back in August I finished VC University (VCU), a program designed to teach venture finance. The course was new this year, so I figured that writing up a review will be useful for anyone considering taking it.
VCU’s homepage says it’s for “entrepreneurs, investors, attorneys, and anyone else interested in emerging company finance.” I check several of those boxes with my background: I’m an investor both institutionally at Accomplice, a seed-led firm in Boston, and personally as an angel; I have a law degree; and I’ve worked at a few venture-backed startups and founded my own initiatives like Rev Boston. I don’t have a finance background, though, and felt like brushing up on the foundations of venture would be helpful. Plus I always like to learn and I enjoy the organized, achievement-oriented realm of school and classes.
VCU is a partnership between Startup at Berkeley Law and the National Venture Capital Association (NVCA). I did the online course, although there’s apparently a live version with in-person office hours in Silicon Valley. The online course costs $1500 and is designed to be finished in 8 weeks, which felt like more than enough time to cover the ~20 hours of content at your own pace. Content takes the form of video lectures, quizzes, Excel exercises, and video interviews with people in the industry. There was also a discussion board but students rarely used it in my cohort. Full disclosure: VCU offers tuition scholarships to people who have been traditionally underrepresented in finance, and they gave one to me.
The syllabus covered:
- Introduction to venture funds (VC basics, what’s a fund, when to raise, having an investment thesis)
- Startup fundamentals (deal sourcing, entity formation, HR and personnel, IP issues, founders’ equity, raising money, diligence)
- Venture deals (structure, convertible debt and equity, seed/convertible financing, priced rounds, term sheets)
- Venture deal economics (historical VC financing, more on priced rounds, modern VC financing)
- Cap tables (modeling for a Series A, convertible/seed, anti-dilution, down rounds, exits)
- Advanced topics (public policy, corporate VC, board governance, getting into VC, diversity)
My high-level review (I’ll get into details below): 7/10
Very useful foundational information on the how and why of venture capital. Great for founders who want to understand the VC universe or for existing VCs who want a stronger finance/legal foundation. Less useful for people trying to break into VC because simply having a financial/legal base doesn’t get you a job or make you a great investor. Needs to work out some product kinks.
VCU gave an awesome review of venture capital. I wish I’d had this 4.5 years ago when I entered this world because it would have answered a lot of questions I’d had about the basics. I thought they were stupid questions at the time — and they weren’t, because VC is a weird industry with lots of unnecessary jargon that can make people feel stupid. Concepts like “2 and 20” and carried interest and the differences between SAFEs and convertible notes are second nature when you’ve been in VC for a while, but they’re alien at first.
Although the content feels geared towards investors, I think founders will benefit most from it. Knowing how VCs think and what they look for in investments, even the lingo we use, gives founders a serious edge. Even employees who work at venture-backed startups would gain a lot from the content in VCU, especially around understanding their stock options and the macro pressures driving their founders to make decisions.
Also shout-out to some of the speakers who were particularly enlightening in their topic areas, including Neil Dugal on the structure of funding rounds and Charles Hudson on when to raise a fund from LPs.
The course vacillates between esoteric details that feel like they’re for lawyers or financial analysts and broad themes on how VC works as an industry, which felt uneven. You’d go from “what are the key roles at a VC firm?” or “what is carried interest?” to “how do you file a Statement of Designation by Foreign Co with the CA Secretary of State?” or “enter this insanely complex Excel formula” without much buffer.
VCU could have used less of the perspectives videos, interviews with various VCs on different topics. They ranged widely in quality and how interesting they were, but almost all had a semi promotional vibe about either their own firms or the NVCA (given that they all seemed to be member firms). I would have preferred links to tried and true blog posts by VCs on these same topics rather than force these interviews, which were long and felt like a slog to get through (at least that 2x speed option on videos helped).
My two criticisms are nitpicky but also annoying enough to detract from the experience. First, the cap table sections were tough to follow. They used low-resolution screencaps of Excel that were blurry at best and impossible to read at worst. One of the instructors didn’t take the time to write out Excel formulas in larger format on the screen (one did, though: thanks, Adam), so I had no idea what he was doing. Some of the Excel files you’d download to use alongside the lectures had data that didn’t match the videos.
Second, the logic of the course’s quiz system was bizarrely off and kept marking answers as wrong that were right. I wasn’t doing this course for a grade, but they say you’ll get a certificate if you get 75% or higher on everything (and WHO DOESN’T LIKE AN AWARD?). There’s no way that people are going to know that “30 cents” must be entered as exactly “0.30” versus “.3” or “0.3” in the system. I contacted the course admins about this, as did other students, and they were responsive about updating the scores on their side of the system. But it was still irritating to encounter this all the time.
VCU is an awesome resource on the building block knowledge that you need to understand VC, or even just be in a board room or around investors and not be writing down mysterious terms to Google later. And that really does matter: having a familiarity with these concepts makes it easier to navigate the VC world and use it to your advantage.
Just understand that it’s foundational. From the many conversations I’ve had with people trying to get jobs in VC, the (incorrect) outside perception of this role is that it’s all Excel modeling and term sheet negotiation and memorizing valuation multiples for different industries. That couldn’t be more wrong. 90% of what makes a great investor are the intangibles: high EQ, an ingrained curiosity and thirst for knowledge, having your own storefront, building your dealflow engine, having good instincts about people and businesses, and having unique technical/industry knowledge.
That 10% foundation around legal jargon and finance is useful, yes, but that’s not what makes the best VCs. They aren’t great because they can model a bunch of exit scenarios if a company gets acquired, or because they were a stickler for some liquidation preference in a term sheet. They’re the ones who their founders text in the middle of the night when they’re afraid everything in the business is going to hell, and who have the empathy and the pattern recognition and the humanity to help those founders in their worst times. They’re the ones who spend years obsessing about a tech breakthrough because they love it, and then jump on a red-eye to chase down and woo a founder building a company in that area because they’re convinced it’s the next Slack.