A Guide to Breaking into Venture Capital
A step-by-step guide including understanding your value proposition, resources to prepare for a job in VC, and tips on how to get an offer.
TL;DR — You can’t break into VC if you can’t articulate what makes you special, have the skills, and understand the landscape. This guide will show you how.
Venture capital is a competitive industry. While relatively new in my career, I started working in the VC industry during grad school and I’ve worked at a couple funds and an accelerator across internships and full time jobs. Over that time, I’ve spoken to hundreds of people; both those in the industry already and people trying to join. Those conversations coupled with the responses from VCs on my tweet about archetypes of VC inspired me to write this article. Here’s a how to guide that will help you answer these 4 critical questions and land the gig:
- Which type of venture capital firm do I want to work at?
- What is my specific value proposition and why should they hire me?
- What have I done to prepare myself to work in the industry?
- How do I get the job?
- Start with Understanding Your Career Goals
Before you try to break in to the industry its important to understand the type of fund you are trying to work at and the nuances of working at different firms. Entry level jobs at various firms can vary vastly based on stage, sector, fund number, and fund size.
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- Early stage vs. late stage fund: Early stage funds place more of an emphasis on networks and evaluating teams, products, markets, and ideas. Your job will probably consist of speaking with a lot of entrepreneurs and is heavily focused on sourcing. Later stage firms have more data to go off of and are more finance heavy. A later stage fund may be more suited for someone with deep analytical skills.
- Industry agnostic fund vs. speciality fund: All funds have investment thesis, but some are more well defined/rigid than others. Certain funds will look at all types of deals, while others focus heavily on one or a couple sectors/verticals. Both types of funds are great. If you have specific background in something (eg. a PhD in Biology and want to work at a a Biotech focused fund or previously founded a FinTech startup and want to work at a FinTech fund) you may be more of a value add at a speciality fund. Even if applying to an industry agnostic fund, it’s important to show you have expertise in certain topics and a unique lens to evaluate startups.
- Established fund vs. emerging fund: The amount of emerging funds has increased exponentially in the last couple of years. There are pros and cons to working at both. Established funds have more brand recognition and often times more resources. However, emerging funds may provide more hands-on work to you or allow you to shape the investment thesis more. Think of it like working for a startup vs. corporate which already has processes in place.
- Fund size: VC firms typically follow a 2/20 model, meaning they get 2% management fees on the fund size they raise. Those fees are used for operating costs including salaries. Thus, if a fund has raised under a certain amount, they usually don’t have a lot of capital (or any!) to pay analysts/associates. I can’t tell you how many people I know (myself included) who have been asked to work for free or under minimum wage when breaking in. This is something not talked about often but is something to consider.
Defining Your Value Proposition & Learning the Archetypes of Venture Capitalists:
I can not stress this enough, self awareness and storytelling is key to getting a job in venture capital. When thousands of people are competing for the same job, you have to understand your edge and why the firm should hire you. This does not mean you have to be great at everything. It just means you have to be exceptional at a few things, that will make you a a value add at a firm. The best firms have people with all types of value adds, that provide complimentary skill sets.
Multiple times I’ve interviewed for a job and in the process pitched to them specific value adds I have and they hired me for a different role. My current firm reached out to me via LinkedIn to recruit me for a straight investment role. I had the self awareness to understand I was interviewing at a top fund against many people with ivy league degrees & Investment Banking/Private Equity experience, which I do not have. I do however, have a background in branding and working directly with founders. I saw a gap on the platform side (anything value add at a fund including branding, events, talent, partnerships, post-investment support, resources for founders & much more) where my expertise could be used. I ended up pitching ways the firm I work at could improve in that area and they ended up creating a Vice President of Platform and Marketing role for me.
There are 3 main paths I see. While they are not the only ways, they are broad categories that most people who get into VC fall under. This tweet breaks it down plus responses from tons of others in the industry of ways they see people breaking in. It is important to understand where your skills align and which path you should take to break in.
Finance: PE/IB/Consulting/MBA/IVY background. This is typically the only path people think of, but is not the only one. Because of the prestige and competitiveness of the job, many VCs come from name brand schools and firms before breaking into venture capital. These firms can help provide strong finance and analytical skills critical to evaluating companies and markets. Common firms that VCs come out of include McKinsey, Blackstone, Bain, JP Morgan and many more.
Builder: Founded startup or worked for high growth one. VC firms value operational experience and insights from people who have previously been founders. These people are uniquely primed to provide founders in their portfolio with insights from their experiences. Founding a VC backed startup is a great way to build a network of VCs and understand the other side of the table. If you are not a VC backed founder, working at a high growth VC backed startup (and understanding the processes the startup used to grow) is another path to breaking in.
Network: Community builder w/ strategic network. People with a strong network (whether it is connections to limited partners, founders, or other VCs) are an amazing value add to firms. A strong way to build this network is to create thought leadership. Thought leaders create content around the startup ecosystem in the form of podcasts, blogging, social media, hosting community events, leading campus clubs, consulting with startups and more. They already talk to founders, understand markets, and source deals (sometimes angel investing themselves.) Essentially, you can start doing the job before you have the job and prove to firms you already have the network and skills to get it done.
Resources to Prepare for a Job in Venture Capital
It’s important to understand the structure of VC firms, technical items in VC like dynamic of fundraising rounds/term sheets/cap tables, how to evaluate markets & startups, sourcing methods and more. Here are some great resources to prepare you:
- Books: Zero to One, Venture Deals: Be Smarter than Your Lawyer and Venture Capitalist, The Founder’s Dilemmas: Anticipating & Avoiding the Pitfalls that Can Sink a Startup, The Lean Startup
- Podcasts: The 20 Minute VC by Harry Stebbings, The Consumer VC by Mike Gelb, Demo Day by Coefficent Labs & Sean Goldfadean, Just Go Grind by Justin Gordon, How I Built This by Guy Raz, (+ a list of twitter’s favorite business podcasts)
- Blogs: John Gannon Blog (there are so many but this is my absolute favorite, so I am just going to recommend this one!)
- VC Training Programs: Kauffman Fellows X Techstars Venture Deals Course (recommended), Going VC, Venture University
- Resource Guides: Paige Nelson’s Tech & VC Notion, Contrary Capital’s How to Start a Startup for students
- HigherED: Masters of Science in Entrepreneurship and Innovation at USC, Venture Capital Unlocked via Stanford Online
- Communities: Gen Z VCs, GSV Startup Bootcamp, All Raise (invite-only), VC Platform Global Community (invite-only)
- Newsletters: Accelerated by Justine & Olivia Moore, GSV N2K News to Knowledge (EdTech specific), Strictly VC, Pitchbook, CB Insights, Lolita’s Newsletter,
- Scout Programs/ Fellowships: Contrary Capital, Kleiner Perkins Fellows, Score 3 Venture Fellows, Indie.VC Scouts, HBCU VC, BLCK VC, Gen Z Scouts
- Invest yourself through crowdfunding & accredited investor platforms: AngelList, Republic.co, Wefunder, SeedInvest, Start Engine
Tips & Tricks to Getting the Gig
Once you understand your personal value add, the type of firm you want to work at, and have a knowledge base of VC, you are ready to apply. Venture is unlike other industries in that there is usually no formal recruiting. Here are some ways to get the job:
- Network, Network, Network: Reach out to VCs. You can cold reach out via LinkedIn/Twitter or get a warm introduction. Even if they don’t have an open internship or job now it’s good to build a connection now. I’ve personally recommended multiple people I met through coffee chats to other firms for internships and full time roles who have been hired! Pro Tip: Be aware that VCs get a ton of request for coffee chats and can’t talk to everyone. Good ones are clear, concise messages that show you’ve done your homework and provide a reason you want to talk to them specifically. The best ones provide a “give” as well as a “get” where you offer them something (a deal, speaking opportunity etc.) in exchange for their time and knowledge.
- Do the work of sourcing, due diligence, & portfolio support: Subscribe to newsletters, attend Demo Days, join startup communities, and stay up to date on new companies in various industries. You can send relevant deals to firms that you think would fit with their investment thesis. You should create your own investment thesis and start evaluating companies. You can also reach out to founders directly and offer free portfolio/consulting work to prove your value add.
- You’ve got the interview, now what: Here’s a list of common interview questions. My quick tips include; knowing the VCs investment thesis inside and out including 3 examples of startups in the portfolio you can talk about in depth, 3 examples of startups you think they should add to their portfolio and why, and the pitch of why your skills and background make you a fit specifically for their firm.
Just for students: Here’s a tweet thread specifically on ways students can break into the industry. I could write a whole article on how I broke into VC as a student but that’s for another day. Take advantage of on campus resources like accelerators, startup clubs, pitch competitions, venture capital case competitions and external student fellowships/scout programs.
The Main Message
Overall, getting a job in venture capital starts with knowing yourself. Once you understand your own strengths and weaknesses & the type of firm you want to work at, you can start to build up your own skills and apply. Hopefully you find the resources above helpful to help . My Twitter is @theaknobel. Let me know what you thought of this guide and if it helped you land any gigs!
