15 things I learnt while working at a VC firm for 30 days
I spent this December pursuing a one-month internship with a leading early stage Indian Venture Capital firm. It started out as a fun way to spend a winter vacation. But ended up answering a few key questions, any startup enthusiast would have, like:
- What kind of startups get funded?
- How is Indian VC industry like?
Mostly, I worked on performing analysis on prospective investments and sitting in on pitches by prospective portfolio companies. Also, spent a a bit of time on deal sourcing and due diligence on few of the investments.
Here are the 15 things I learnt during the internship.
First five answered my questions relating to “What kind of startups get funded?”. Next eight answered “What is VC industry like?”. And the rest are general tips and tricks I learnt.
1. B-Plans are extinct.
For the 30 days I worked there, I didn’t see a single B-Plan (except for entries from a B-Plan competition).
2. Numbers are mightier than words.
3. Pitch Decks are handy.
Pitch Decks are expected to have at least Team Info, Traction Data, Competition Information and Differentiator.
I will always remember the frustration I faced when Team background was not in the pitch deck or the joy I felt when Competition Mapping was already done by the founders (it gave me a starting point of my side of competition mapping).
3. VCs talk.
Indian startup ecosystem is a very small one where everybody knows everybody. Its very difficult to hide stuff. A lot of backdoor background checks happen. So, never lie.
4. It’s sometimes okay to discuss other VC’s feedback to the ones you are currently pitching.
They are going to talk to them anyways.
5. Tools used
I can’t recollect how much thankful I was to the founders of Tracxn, Mattermark, AngelList, Crunchbase, Yourstory, Rapportive, Domaintools and SimilarWeb for creating those wonderful products.
6. Determination is the key.
Fundamentally there is nothing starkly different about successful and other people. Some just have the determination to execute, while others don’t. Its that simple.
7. Only 3 things matter in a startup — Team, Product, Market.
- Will the team be able to execute?
- How much do users like the product?
- How many and at what rate can the startup get their users?
8. Team is the most important out of the three, because it is the only thing VCs can be sure of.
Product is uncertain. Market is uncertain.
9. Things VCs look for in the team
- Do the founders have the ability of effectively execute?
- What are their views about how the market it going to turn out?
- How do they know each other?
Having a good history helps a lot.
10. Product
- How do your early customers find your product?
- How many of those you have?
- How many of them pay you?
11. You can’t create a market that does not want to be built.
During the internship, I came across a lot of companies that have been operating full time for years and still have not achieved their product/market fit and nowhere near finding it as well. So, choose your market carefully. It might very well be the defining factor to get funded.
12. Timing is the key.
Its also the hardest to figure out.
13. Sectors to look for.
During the short time, I found logistics, healthcare and food industry really promising in India. (Disclaimer: Limited knowledge)
14. Always take notes.
I learnt it the hard way. Now, I prefer the Cornell Note-taking system.
15. Always have a framework in mind. It lets you make consistent decisions.
Right or wrong depends on the framework. But at least your decisions will be consistent.
Link to the original article here.
