Want to Break Into VC? Try CVC!
Why corporate venture capital offers an accessible career path
It is undeniably difficult to get a job in venture capital, since there are only about 13,000 total VC positions (Source: NVCA) in the United States. As Baiyin Zhou of Ascent Venture Partners points out, there are about as many opportunities to be a professional athlete in this country as there are to be a professional venture capitalist.
Brendan Baker, formerly of Greylock and AngelList, says finding a job in venture capital is similar to trying to find an apartment in San Francisco: “It takes longer than you’d expect, feels discouraging as you try, and often happens through personal networks.” In countless books and blogs sharing advice for breaking into the business (like this helpful list of resources from Diversity VC), the discussion focuses on institutional venture capital. But corporate venture capital (“CVC”) may offer an attractive path, too.
CVC is one of the fastest growing parts of the venture capital ecosystem. The segment has been expanding rapidly in recent years, becoming increasingly mainstream as it accounts for a larger proportion of investment activity. As reported in the 2017 PitchBook-NVCA Venture Monitor, CVC firms participated in nearly one-third of all deals in the U.S., and these investments composed a record 44% of total venture deal value. Between 2011 and 2016, the number of corporate investors tripled to 965, and as of May 2017, 75% of the Fortune 100 were active in corporate venturing, according to Global Corporate Venturing.
There are three compelling career reasons for job seekers to consider opportunities in corporate venture: 1) there are a large number of jobs being created in the field, 2) exposure to corporate leadership that improves your value as a venture capitalist, and 3) acquisition of multiple skills that can create attractive options for career advancement in venture capital and in other roles, too.
1. There are many job opportunities
The growing relevance of CVC is evident in the job market, and this might be the most important reason for candidates to consider corporate venture roles in addition to institutional positions. Entrepreneur, author, and ex-VC John Gannon assembles a list of VC job postings monthly. Out of the 432 positions listed on John’s blog during the second quarter of 2018, 36% were for positions in CVC, and nearly 50% of those were entry level. Especially for young people looking to break into venture capital, it is clearly worth exploring CVC.
Job creation in CVC tracks the overall rate of new fund creation. During the same five year period studied by Global Corporate Venturing when more than 600 new corporate venture capital programs were launched, there have been 379 new institutional venture capital funds created, as reported in NVCA’s annual yearbook. As a proportion of new funds created, CVC programs are well-represented. More funds equals more jobs.
2. Corporate investors often work directly with C-level executives and build relationships can make you a better VC
One of the main roles of a venture capitalist is to help startups develop strategic relationships that create distribution, positive press, follow-on financing, and ultimately liquidity options. Where do these strategic relationships come from? Many times, VCs must take years to build relationships with executives at large corporations.
So it stands to reason that working inside a corporate VC, where you will build hands-on relationships with senior executives in your industry, can make you a better investor.
As a result, when you’re on a CVC team you’re also in the position to offer startups more than just capital. A corporate investor can bring:
- Industry expertise
- Sales and distribution channels
- Marketing support
- Product and technology collaboration
- Recruiting talent in the industry
- Exit opportunities
Corporate VCs may also able to use in-house resources to diligence investment opportunities. Corporate investors tend to be industry-focused, and domain experience can lead to better investment decisions. As our colleague Eric Budin recently wrote in our Risky Business blog “It’s Never Too Early,” a corporation’s ability to run a commercial pilot with a potential investment can be one of the best forms of diligence. These relationships can pay off throughout your career as a venture capitalist.
3. There is a path for advancement
Many junior roles in the financial world are designed to be “two-year-and-out” programs, but this isn’t necessarily true in corporate venture capital. A corporate environment can provide more opportunities for training, with established systems to develop and retain talent. CVC may offer more room for promotion and job exploration because in addition to the team that directly manages the venture fund, there are usually multiple business units and other departments that are deeply involved in the program. For someone considering career progression, a corporate fund can be a great springboard to explore different parts of the venture world.
Another draw of working in CVC is the opportunity to advise senior executives on corporate strategy and overall digital transformation. The strategy of a corporate venture arm typically intertwines with the company’s overall roadmap, so CVC investors must develop a deep understanding of the broader needs and priorities of the organization. At Touchdown, for example, we frequently speak to dozens of operating executives and company leaders to develop an investment thesis for our corporate partners. It’s an exciting opportunity to help drive a company’s innovation strategy while serving the company’s broader needs, and may present additional opportunities for career advancement.
Corporate VC can be an excellent means to start a career in venture capital. At Touchdown Ventures, where we manage the venture funds of multiple large corporations, we’re always looking to add to our team. Candidates will have the opportunity to obtain significant venture capital investment experience working on these corporate venture funds. If you’re looking to break into venture capital, please apply here!
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David Horowitz is a co-Founder and CEO of Touchdown Ventures, a Registered Investment Adviser, that manages venture capital funds for corporations. Touchdown’s Philadelphia-based Analyst Jennifer Sieber contributed to this article.
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