Analyst: Zero to One
I joined Auxano Capital in July of this year as an analyst, though I had previous exposure in analysis with CRISIL and BNP Paribas, it was never the same.
Being an analyst at a growing Venture Capital firm opens a universe of learnings as you come across different businesses everyday. Some are working towards creating an app to digitize 3w rickshaws while others are developing a lander system for the Astremis mission (Astremis is NASA’s mission to send humans to the Moon).
Though all the businesses you analyze as a VC analyst belong to very diverse industries, their value proposition revolves around very similar principles when seen through a VC lens.
Every business is governed by certain Fundamental Principles, which differentiate it from being investable or not, this nowhere classifies a business being good or bad, it’s just that a business can be a VC business or a business.
During my past months, I’ve learnt a few key things that you must know if you’re a VC analyst or are looking to be one anytime soon:
- Attention to detail:
The most important thing of it all, the minutest things carry the most important information. How about you find a spelling mistake on the website of a business that is into teaching writing skills? well you may say mistakes can happen from anyone, but will you trust your money with this business?
Moreover, missing details can sometimes turn the tables against you:
“We agreed to invest $1Mn. at a $10 Mn. Valuation”
Uhh…Post Money or Pre Money?
In that state, you might be left with owning 9% instead of 10% of the company, and that’s not very good.
2. Reading, and Reading Everything:
As I already mentioned above, being an analyst involves knowledge of very diverse areas, and I’m sure you might not have someone who can help you with each one of them.
Reading can be your hand in need.
Reading opinions and reports over the internet can sometimes be the solution to very complex problems.
How good does converting water from air sound, maybe as good as solving the water crisis in the world.
But before you invest, read this: Analysis
3. Be a Teller:
What if you put days and nights into evaluating a business, but could not convey the investment team about its viability, well that’s equivalent to not doing any analysis.
Narrating an investment opportunity is not as easy, as it sounds at an episode of Shark Tank.
Your communication must address all the important points, must satisfy the intentions of the listeners, be in flow, must be backed by facts and be as concise as possible. You should not try to oversell the analysis as if it was to, it will do it for itself.
Lastly, it’s always better with infographics.
4. Trust with Caution:
There is a lot of information available when you hunt for facts, always remember that your analysis is a point of trust for a lot of decisions.
When hunting for data points to build analysis, always look for credible sources. We often confuse opinions and statements, which can have a major impact on the analysis.
Moreover, it’s also important to take into account all the tangents of the data points, Twitter gained 1 Mn. followers in 720 days, however it took just 75 days for Instagram to achieve 1 Mn. followers.
Is Instagram a better play than Twitter?
Well not exactly as Twitter was launched in 2006 when the internet penetration was at a very early stage. However, Instagram was launched in 2010 when internet adoption was facing exponential growth.
5. Organize:
When you initiate analysis, you for sure will come across loads of documents leading to the conclusion of your research. Any piece of information can be required at any moment of time in future, and in case you lose the source, good luck to you!
It not only stands important to have the sources organized, it’s also important to have your mind clear during research.
Organizing also helps you keep track of your progress and efficiency in certain processes, which based on analysis can help you be a better version of yourself.
6. Be Mindful:
Lastly, you might research something for a long time, but it might never go through. Do not take a setback!
There are always reasons for something to happen, and understanding those can help you fast pace your career as you learn from others’ mistakes. Moreover, never forget to ask the reason why someone disagrees with you, as it might grow your knowledge about something or you might grow others knowledge about something.
In my past months as an Analyst at a fast growing Venture Capital firm, I’ve realized that there exists a steep growth curve, which can fast pace you 3 years in your career. But to achieve this growth, you must work harder and smarter than at any other job.
Author:
Kanuj jadwani
