Sneak peak into the life as a (visiting) investment associate @ First Momentum Ventures

Ever wondered whether the shiny, mysterious venture capital world is something you would be keen to explore a bit further?

You would love to take a look behind the curtain but don’t really know where to start as you feel like you have way too little experience and no one will take you serious anyways?
Let me take you on a little throw back to a couple of months ago when I first started as an investment associate at First Momentum Ventures in a little town called Karlsruhe.

Disclaimer: As every single human being out there has different interests and strengths I won’t bet a hundred dollars that your experience will be the same or quite similar to mine. But I do hope that this article may help one or two VC enthusiastic people out there to get out of there comfort zone and start pursuing their goals.

It’s not rocket science — don’t be too scared

My first thought when I prepared for my interview at First Momentum?

“I have absolutely no clue how to do this”

Although I did have some touch points with the entrepreneurship scene during my studies I had never actually worked in a startup before, let alone for a venture capital investor. And with First Momentum Ventures being a VC focusing on startups with a strong technical component, I figured that as a business administration student my technical knowledge would be way to sparse to assess any startup I would be talking to.
Besides that, the fancy word “Due Diligence” kinda scared the crap out of me. How the hell should I be able to do all of that, seemingly really difficult, stuff? But after a couple of months in I guess it’s safe to say: Don’t worry! It sounds way more difficult and mysterious than it actually is.

Your road to First Momentum will probably start with a first phone call to see whether you are a good personal fit or not. Afterwards you’ll get one or two case studies to work on. What do I mean with case studies exactly? Based on a pitch deck from a random startup your task is to have a look at the deck, analyze the idea, market, team and so on and then give a first assessment whether you would think this would be a good investment opportunity or not — thus, would you suggest to continue talking to the startup or not.

First Momentum also invests quite some time to make sure you are a good fit in terms of personality, values and passion. So you’ll probably be invited for one or two “trial work days”. In case you’re thinking “quite a lot of steps for an internship, is it really worth it?” → Yes it is. See it this way: You will spend a lot of time with these guys. So you yourself should make sure as well that you can imagine spending several hours a day side by side with them. In the end, it is a job that is really fun but also consumes a lot of time, so the team you are working with should consist of people you could imagine becoming friends of yours.

You’ll probably have some “I have absolutely no idea what he/she is talking about” moments

→ And that’s totally okay.

Alright, lets jump to some areas of responsibility you will deal with. As an investment associate, it is your job to identify new, possibly pretty awesome, investment opportunities. So you’ll spend a lot of time sourcing potential deals. Do you have a niche or a potential sector you have a particular expertise or interest in that you would like to focus on? Awesome! You have a pretty broad interest and don’t really know what area you should have a closer look at? No worries. You will find a niche area and become an expert step by step.

As an investment associate you’ll also spend a lot of time on the phone or in video calls talking to startups First Momentum would potentially like to invest in. When I had my very first phone call I was pretty nervous. How the hell should I be able to tell whether this is a good opportunity or not? I also often felt kind of stupid whenever I had trouble to understand a business idea or product details within just a few seconds or minutes and in the beginning I was often too shy to ask a second time as I felt like I would present myself as unintelligent or not worthy of the job. Screw that! Ideally the person (most of the time the CEO of the startup you are talking to) has a way better understanding of market, product and technological components, than you do. So it kind of should be the way that he or she has a pretty good answer to all the questions you are presenting him/her with. Imagine you are ending the call with the feeling “this person really impressed me, I was not able to fluster her, she seems really smart” — that’s kind of a good thing considering that that’s the person that is supposed to build the next unicorn, right?

I’ve been guilty of “bluffing” and then feeling like the moment to ask the stupid question has passed. — Francesca Warner

But still — you holding back your questions because you don’t want to be considered stupid does literally help nobody. Not the founder, not yourself and most of all not First Momentum when they are trying to assess whether they want to invest or not. As a VC associate you simply cannot be an expert in every field. And it shouldn’t be the case anyway. Don’t be afraid to ask twice if you didn’t understand it the first time. After all, you need as much information as possible to be able to assess whether the startup is a potential investment case. I read an article from Francesca Warner a couple of weeks after starting at First Momentum. Her insights into the life as an investment associate and her learnings from working at Downing Ventures really helped me to lose some of my insecurities.

You thought your last job / internship let you experience an enormous learning curve?

→ Be prepared for a wild ride

You were pretty happy with your last internship as you would say you learned a lot? Well, look forward to the next couple of months because “enormous learning curve” will be set to a whole new level.

You will probably have a lot of uncomfortable moments where you feel like you are not quite ready for the situation. Well guess what that’s exactly where you start learning. Nobody learns while being in their comfort zone all the time. One of the awesome things I realized after a couple of calls — on one hand you continuously get better, since you’ll develop some kind of routine. In some aspects all early stage startups looking for a first investment are the same. And you’ll also realize when picking a niche to focus at, that after a few calls talking to similar startups you are getting faster and faster in assessing whether you are talking to a good team or a great team that really understands the market. On the other hand, no startup is the same, no founder is the same, and no phone call is the same. There is always something new thrown into the ring that you weren’t aware of before. Something to learn and evolve from.

And the great thing with First Momentum: It really has a startup vibe. You are never “just an intern” or “only the associate” — you are a full-time member of the team. Your opinion is valued. I remember joining a team pitch in my very first week, probably day two or three. Holy, I had no clue how to behave, what to say, how to ask smart questions, how to do anything basically. But it was so cool to experience that only on day two! Imagine what’s to come on day 10 or 12 ;-)

You’ll also get the possibility to be present in final investment discussions and experience first hand how the partners come to the final decision. And you’ll get to take part in them as well. So be prepared to get asked for your opinion. And be prepared that your assessment will be questioned. I not once had a situation where I felt like they only asked for my opinion so I would feel like they valued me being there. But I did for sure experienced situations where we had some pretty long and intensive discussions and some pretty controversial viewpoints. And that is exactly the environment where you start to actually learn and develop.

So who will you actually be working with?

→ Some insights into the First Momentum Family / Crew / Mafia

If you check the @firstmomentum instagram page from time to time you’ll realize the common hashtag #vcbutdifferent. So what the hell makes First Momentum so different?

When googling First Momentum Ventures you’ll probably see the phrase “from students for students” floating around the internet from time to time. By now none of the partners nor the rest of the employees is studying full-time any more, so that phrase is kind of outdated. Nonetheless I believe that one of the main advantages of First Momentum is definitely the close relation to the universities all over Germany. As some of the partners founded startups while being enrolled in university themselves, they tend to understand the issues a young first-time founder who is still enrolled in university or just finished their studies might be struggling with. And since they are not the oldest crew in terms of age, I do think that First Momentum is able to actually be a partner on an eye-level basis. Which does not necessarily mean that you’ll be exclusively in contact with really young founders. They talk and already invested in a colorful mix of founders, all different and yet the same in terms of determination, passion and drive.

The First Momentum Family / Crew / Mafia — the really cool name is still to be decided on — consists of a bunch of different personalities that in combination form a pretty outstanding team. I guess what combines them is a passion for really great technical ideas and a huge hunger to learn, develop and progress, to build something meaningful that creates impact and makes a difference. And they are pretty fun to be around as well. Although sometimes I had absolutely no clue what they were talking about during lunch since I was one of the rare employees without an IT or engineering background, I always felt welcomed and valued and we had quite some fun discussing all kinds of topics while grabbing lunch, a coffee at Tostino (best coffee in Karlsruhe!) or team dinner. Also pretty fun was our Christmas party where we visited a local escape room. Let’s just say that you really get to know your team mates under pressure! They definitely do not like to loose. And they are also always up for a round of beer pong, a glass of wine or some card games :)

To sum it up: These guys (and girls! — although they somehow always were able to escape my camera) are freaking awesome.

For anyone out there thinking about starting in the venture capital world — I strongly recommend having a chat with them.

Any questions left? Hit me up!