Venturing as an Analyst: What to Expect.
A reflection on my time so far as an analyst in venture capital.
Six months ago I started my analyst internship at Supernode Global. Over three months, I worked hard to make the role permanent and I’m happy to say that I’m now a full-time team member.
The internship was challenging. On the one hand, I was completely immersed in the VC ecosystem and excited by the prospect of a career in the industry. On the other hand, I knew I had to prove myself to the team so I could earn my spot as an analyst. I found it difficult to balance these realities.
It has struck me how unique an analyst role in venture capital really is. It’s unlike typical graduate programmes that you might get at consultancies/investment banks. Whilst the majority of your time will be focused on sourcing and supporting deals, and portfolio related tasks, one analyst’s experience will vary widely from another’s. For this reason, it’s hard to know what to expect so I decided to outline some important things you should consider if you are an aspiring analyst or, like me, are just starting your journey in venture capital.
1 — You will review a LOT of pitch decks. I underestimated how many startups are looking for venture funding. As an analyst be prepared to review multiple decks on a daily basis. You may be the first ‘screener’ and have to get used to making a lot of quick decisions, with limited information, most of which result in a pass.
Don’t worry if it takes you time to get to grips with reviewing decks. The more I worked through them, the faster I learned what to look for and spot red flags. I discuss decks on a weekly basis with a colleague and this really helps speed up my learning.
2. You will say no often. Saying no is a major part of an analyst’s role. Sometimes you will pass because the businesses are not the right ‘fit’ for your investment area, and other times they will fit but you don’t have conviction in their potential to succeed as a business. As you develop as an analyst, the way you say ‘no’ — the art of saying no — will evolve, and you’ll get better at passing.
But, don’t panic. I always find it strange passing on a business in a market I have limited knowledge about. However, only by reviewing more decks was I able to build conviction and develop strong opinions, weakly held.
3. You will come across good businesses that are not venture backable. It will be common to look through a pitch deck and think the product they’ve built is neat and solves a real problem in the world that you yourself might experience. However, the market may simply be too small for venture investment. It can be frustrating to pass on these opportunities.
Since being here I have traded in a “I would use this” mindset for a more well-rounded, analytical approach.
4. You’ll find the role is very unstructured. Often there is no set project to deliver, but instead, you are continuously learning and becoming more knowledgeable about a particular market or how VC works generally. It’s crucial to ask yourself whether you are the type of person that thrives in a somewhat unstructured environment or role. However, be aware that when a deal comes in there are usually very tight deadlines for the due diligence process.
I really enjoy this element of the role and find it more rewarding over the long term than regular project-based work.
5. You will have a lot of autonomy. Due to the unstructured nature of the role, you will be given a lot of autonomy. You have the ability to decide what to do on a day-to-day basis, and the chance to develop your own opinion on what makes a good investment opportunity.
This is another thing I like about being an analyst in VC, however, having this level of autonomy won’t suit everyone. Do you like to be told what to work on or do you enjoy the freedom of deciding for yourself?
6. You’ll find the intensity of your work will vary. Some days you will have ample time to read, research and think. On others, you will have a barrage of internal meetings, founder calls and demo days to attend. When a deal comes through, you will likely be working intensely on due diligence and evaluating the opportunity. Often your week will be a mix of these activities, but there is no set structure to follow and I find no day is the same.
At first I struggled with this but it’s very much a case of embracing the ambiguity, and not letting it deter you.
7. You’ll learn most by doing. It’s unlikely you will have a structured training programme to follow. Accept that it’s a steep learning curve but that the best way to combat this is to be proactive and get involved in different projects. Don’t expect these projects to come your way without asking.
At the beginning of each week, I’ll often have a few projects in mind that I want to work on and will reach out to those leading on them.
8. You’ll realise how precious time is. I value my time far more now than I did before becoming an analyst. There’s so much to get on with that you can’t afford to be inefficient. Time amongst the team is limited too and is, therefore, a precious commodity. This means you will often work on your own and so being driven by self-motivation rather than tight deadlines is important.
Due to this I initially didn’t want to ask too many questions but it’s crucial that you do. Never be afraid to seek help when you need it. I’m lucky to have such a great team, who are always there if I have a question or need support.
9. You may experience some degree of imposter syndrome. How did I even get here? Why did they hire me? Do they regret hiring me? How do I learn all this stuff I don’t know? Will I ever get to their level? Don’t worry, it’s natural to doubt your abilities and feel a bit like a fraud when you start out as an analyst in VC. You’re regularly working with highly intelligent and creative people which can lead to an inferiority complex. Remember that surrounding yourself with the best people will not only make you smarter and more well-rounded, but also a better person.
I still ask myself whether I can be successful in VC and I think it’s an important question to ask. More important, however, is not letting imposter syndrome prevent you from thriving in the role and answering this question.
10. You won’t truly know how well you’re performing. Be aware of the incredibly long feedback loops. You have no idea if you’re performing well or not, besides qualitative feedback from people you interact with. Don’t get disheartened when you spend months looking through hundreds of companies and don’t end up investing in any. No one will be able to tell you how to succeed, because no one truly knows.
I use learning and value add as a barometer for success. I’m happy if I feel I am developing personally and professionally and providing value to the team.
I’ve found being an analyst in VC to be enjoyable, intellectually stimulating and rewarding. However, as you’re not too sure what to expect when you enter the VC world, I also found the role to be all-consuming.
In the early days — and to some extent even now — outside of work, I was still at work. My mind was constantly thinking about VC and everything I read and listened to was industry-related. If this happens to you, I advise taking a step back so you can re-energise. It sounds simple but it’s crucial as only then did I truly enjoy the role.
Overall, I’m immensely proud and happy to be an investment analyst at Supernode Global. It’s been a whirlwind of a journey so far and I’m excited for what’s next.
Contact me on joe@supernodeglobal.com and on Twitter @joe_j99 if you would like to chat about anything you have read here.
A special thanks to my team who have guided me so far.
