How could a Junior Analyst become a Partner in a VC Firm ?
Ventech is one of the few VC teams in Europe with Partners being both men and women, coming from different countries (France, Germany) and with ages between 40 and 60 years.
Yes, we believe that a Junior Analyst may become a Partner one day!
A Partner in a Venture Capital firm acts both as an investor and as an asset manager.
Few ideas on how to develop your ‘Investor’ skills ?
Strong analytical skills are required to invest in venture. During due diligence process, all aspects of a project will be carefully scrutinized : from value proposition, targeted market, product’s differentiation, business model,…
But it is not enough when it comes to identifying the winning team, or predicting the future : remember, we are investing in breakthrough technology, new business model, new usage! On the top, good teams often attract competition. So you need to add commercial understanding and experience to make your own firm conviction.
My tips:
- Be very strong on the analytical review : work hard, practice on many due diligence…. Use that to assert yourself overtime.
- Learn by experience: Venture capitalists are craftsmen. So, work with different partners to understand their reasoning to assess risk/reward, to get feedback on what has worked, not worked in other situations…
- Build your added-value over-time: To build a strong network in the industry will always be an asset. Accept that you will not act as board member right away but nevertheless be pro-active to interact with the management teams on specific topics such as finance, market competitive analysis…
- Develop sound relationship with CEOs: I am not speaking about being best friends but more about being someone that a CEO will trust and will call (early in the morning or late at night because the rest of the day is fully-booked!) to test ideas, get feedback with an open mind….
Constantly look for the best way to communicate: Relationships between CEOs and investors can be difficult sometimes. I try to always remember 2 points : (i) the CEO is in the driving seat not the investor (the fact that you finance a company, obviously gives you some leverage but be carefull not to use it wrongly!) ; (ii) the CEO has ‘one’ baby, his company, while the investor is managing a portfolio of companies and therefore mitigating his risk. - Develop your autonomy…and not your independence : You will have to make decision on behalf of the fund. Some decisions require partnership approval and timing is key. Anticipate (don’t wait for the last minute for negative news such as ….the company is out of cash next week !), give regular and precise updates, get feedback from the partnership before you convey the fund’s position.
WARNING : This takes time ! You are building your credibility…and very importantly your own track-record .
Few ideas on how to integrate the Partnership?
To demonstrate your willingness to collaborate on the long-run (in French, we call it ‘affectio societatis’) is paramount to become a Partner… and then the existing partners will decide whether they feel the same for you! All partners depend on each other or put in a more positive way, jointly contribute to the fund:
- First in attracting investors in the fund and investing their own money alongside them,
- Second in making joint investment/exit decisions but also generally participate to the life of the fund : fundraising, HR, communication, finance,
- Third in committing towards the team and the limited partners to stay during the life of fund (‘key-man clause’). This means that when you have issues with your partners (yes, it sometimes happens !), you need to sit down and find a solution.
My tips :
- Show your ‘affectio societatis’, i.e., that you are interested in playing a collective game. The fund’s success is a joint contribution of each member and is not a one-man/woman show.
- Understand the values of the team, be passionate and professional.
- Develop sound relationship and satisfactory working mode with all existing partners and members of the team. Listening is important. Accept contradiction but be ready to fight to convince. Ask for feedback.
- It can be good thing to have one ‘champion’ that will support your wish to become a Partner
- Be ready to commit for at least 10–12 years and to invest your personal money
- Timing is important : teams are usually completed for each new fund’s generation. This is the time to take your position.
WARNING : Selective process and Partnership’s decision!
Then, how long does it take to become a Partner ?
This is not a steady evolution where you go from one position to the other one in a very formal and pre-defined way and with a whole list of job titles. VC firms have few levels between the Analyst and the Partner.
Nevertheless, as far as I am concerned, I am much less bored by this type of structure than by what I have experienced in the banking industry. I don’t miss the very complex HR process based on so many useless criteria !
