My first 90 Days in Venture
After spending almost three years as a consultant, it has been three months since I have officially made the move to being an investment analyst at Mustard Seed MAZE impact VC fund. The past few months have been both challenging and rewarding. In many ways, venture is like an infinite hike and I am only in the beginning. If you are interested in partaking this journey too, here’s what helped me get started.
In the venture fast-paced environment, I found myself involved in different tasks during my first months:
- Managing the social and environmental impact of our portfolio companies to present to our LPs
- Attending demo days
- Participating in introduction calls and performing due diligence on founders
- Learning the legal documents of a deal
- Writing rejection emails (the not so funny part of our job)
- Analysing market trends
- The list goes on
As you see, joining a venture capital fund can be overwhelming at first, as you are constantly flooded with information on different companies, sectors, other VCs and names you have never heard before. I first focused on learning about the portfolio companies. From there, I began developing a VC network and started to screen opportunities. You will see that time will fly by and requests start increasing since the moment you change your LinkedIn name to something as “VC investor”. In the next paragraphs, here are 6 tips that helped me keep grounded:
1. Get acquainted with the VC process
There are several books you can read that will give you a good overview of the funding roadmap. Personally, I read Secrets of Sand Hill Road by Scott Kupor, but there are others popular in venture and recommended by many, such as Venture Deals by Brad Feld and Jason Mendelson. One of these two books should give you a head start in what you need to know from pitch to term sheet details.
2. Listen to Podcasts
Podcasts are a great tool to keep up with recent investments, as well as hear top investors’ views on market dynamics. Car, bus, metro or even at the beach (if you are lucky to be in Portugal) are all a good spare for your otherwise idle time. I personally like to hear Harry Stebbings on The Twenty Minute VC every Mondays and Fridays, usually featuring an investor and an entrepreneur in each day. Associated, aired on Tuesdays, is also a good one for everyone entering this business and looking to understand the daily life of analysts/associates in other ventures.
3. Be on top of what is happening
Read, read, read and once you have done it read some more! Create a routine and block one hour every day on your agenda to read blog posts, articles, newsletters and social media posts. Techcrunch and Venture Beat are good news websites that, together with following investors and VC firms on twitter and LinkedIn, will allow you to be on top of the most recent investments and market trends. There is also a great weekly sum up of the latest funding activity across Europe, written by a friend at RLC Ventures, Oliver Kicks, called The Seed Weekly. His piece is a two-pager newsletter sent every Tuesdays morning that will keep you in the loop on the hottest venture events.
4. Expand your network and build a personal brand
Once you start getting on the rails with your daily tasks, it is important to start working on your personal brand as an investor. With this I mean start making friends in venture and give them a reason to share ideas with you and your fund. Start by mapping other funds with a similar investment thesis and finding an analyst/associate with a background you can relate to, where asking for an introduction makes sense and both parts can gain something from the relation — as in any (relation), you always need to give something back, so remember to share back deal flow and opinions when appropriate! It can take a while for these relationships to pay off but give it time and a couple of calls and the outcome is worth it. This group of people will grow at the same pace as you and become a significant part of your deal flow inbound, as you will become theirs.
On a separate note, it is also important to put your opinions and experiences out there by developing a digital presence. Document your journey: write about your thoughts, learnings or experiences in venture and share it with your network, as I am currently starting by reaching out to you.
5. Screen and observe
My advice before starting to reach out to founders is to observe. First, start by understanding which opportunities are interesting for your fund — investment criteria, strategy, stages, market size, sectors, etc. A good way to do this is by assessing your fund’s past investments and understand their investment thesis, as this will become your benchmark when screening opportunities. Second, ask to participate in your colleagues’ meetings and learn their process in assessing a company and a founder. Once you have done this, you are halfway to becoming a natural in sourcing, the rest will come with experience! Finally, build your own script and start attending meetings. To do this, sign for demo days, cold call founders and take the most of your network referrals. Repetition seems to be key in this learning process, therefore, the more you do, the more you will be able to recognize patterns and develop your gut feeling. Ayrton Senna said once on an interview “And suddenly I realised I was no longer driving the car consciously. I was driving it by a kind of instinct”. This instinct is something I believe we can build in an industry like venture.
6. Be nice to founders
Remember, the same way you pick founders to invest, they pick you. Investments are partnerships. You need to be clear about why you are the right source of capital for them — it is your duty to master your elevator pitch about your fund! If you end up concluding the opportunity is not interesting for the fund, after all, let the founder know why and be respectful of their time the same way you expect them to be respectful of yours. At Mustard Seed MAZE, we live by Patti Smith’s words Your name is your currency and kindness is a good way to value this very delicate currency. Rejection emails are painful to write but if you take the time to give a detailed reason as to why you are passing the opportunity, founders usually are thankful for your input even when you do not fill their pockets with money! If you build a good relationship with founders, it is common they will recommend you to other founders and bring you more opportunities to look at.
With this said, what awaits me next is dealing with the moving target dilemma. There is always something new to learn and my goal every day is to be a true sponge and absorb all the market info I can in due time.
In one year, I aim to master introduction calls with founders and develop my hunch to assess ventures faster and accurately. I would like to believe that one day I would no longer be following a mastery, but an instinct, but the more people in venture I speak to, the more I understand that we are always absolute beginners. That is the beauty of it.
