On Thursday, May 7th, Soma Capital and Romulus Capital hosted a virtual panel on breaking into venture capital. Here are the key takeaways.
Special thanks to the panelists who participated (linked panelists’ Twitters, as requested!): Natalie Sandman at Spark Capital, Greg Bennett at Kapor Capital, Dillon Liang at Bullpen Capital, Rachel Star at Unusual Ventures (more on their Field Guide for founders here), Lucas Bagno at Noveus Capital, Ehi Airewele at Unshackled Ventures, and Joey Kim at Romulus Capital (and my Twitter here!)
VC World
Venture capital attracts less traditional and a more diverse set of people. Prior to venture, panel attendees had pursued careers in consulting, product management, social impact, corporate strategy, startups, and investment banking. No single job will absolutely guarantee or exclude you from opportunities in venture.
Key resources to learn more about venture capital:
- Job Lists: John Gannon’s Blog, Venture Recruiting Twitter
- Company Data: PitchBook, Crunchbase, AngelList
- News: TechCrunch, Fortune Term Sheet, Axios Pro Rata, Bloomberg Technology
- Newsletters & Thought Leaders: Benedict Evans, First Round Review, Tomas Tunguz, AVC (Fred Wilson), Andrew Chen
- Podcasts: Invest Like the Best, Venture Stories, Twenty Minute VC, Evolving for the Next Billion, SaaStr, Origins
- Books: Venture Deals, The Hard Thing About Hard Things, Zero to One, eBoys, Secrets of Sand Hill Road
Each firm will attract and need a different type of person. Some venture funds always lead rounds and thus require more diligence focused work. Some venture funds focus on slightly later stages, such as the Series A and B where more analytical skills are needed. Some venture funds focus specifically on deep tech investments and require investors with expertise in these areas. Some venture funds want to be more hands on in supporting their companies and thus look for prior founder or operator experience. Understand your own skills, background, and interests and find funds that are aligned.
The best part about venture capital is imagining the future. As a VC, you get to spend much of your time learning about cutting edge technologies, meeting with people at the forefront, and supporting daring founders in what may be world changing work.
The worst parts about VC are 1) constantly saying no and 2) the long feedback cycles. Inevitably, you have to turn down most companies you meet, even if you felt their team and technology were compelling.
In the early stage (especially pre-seed and seed but Series A and B, to an extent as well), you try to make the best decisions with the information you have available but ultimately no one can predict the future. You may not know for 5+ years whether the companies you invested in will truly be successful or whether the companies you passed on will be regrettable misses. As people coming from school or more fast paced jobs, this aspect of the VC job can take a while to get used to. On the bright side, however, the lengthy feedback cycles let every investor take their own, unique approach to the core aspects of the job: sourcing, diligencing, winning, and helping companies.
Initial entry points
Get a Twitter account and follow investors there. Many, if not most, venture capital investors are quite active on Twitter and use it as a primary way to connect with each other, companies, and the news. Twitter is a great way to get the latest updates, read and share perspectives, and even build relationships with investors.
Cold outreach with a value add approach. Investors will generally not be receptive to a generic cold outreach email, but if you add value from the very first cold outreach message, investors will frequently take notice. Offer to source startups from your university, local city, or networks. Share a market map you have created on a sector that may be relevant and interesting to the fund.
Think of your value add as time. Seasoned investors may likely be better at diligencing companies than you are, but they probably do not have the time to source at such a granular level or dive deeply into the details of so many companies. If you have the time to do so and can formulate and share your findings in a digestible database or article, you will be adding value to the fund. Quality is important of course, but ultimately, time is as well, and time is what VCs lack and what you may have more of.
Do the job before you have the job. Interview promising startups in your network, write about your thoughts on the future of particular spaces, conduct data analysis on failed vs. successful startups, and share your unique perspectives on Twitter or a blog. In this way, you can form more meaningful relationships with investors and gain skills for the job even before you begin.
Join a university fund or scout program. If you are at school, apply for opportunities at student focused venture funds, such as Rough Draft Ventures, Dorm Room Fund, Pear VC, Contrary Capital, and the MBA Fund. These programs have historically been excellent pipelines into the full time VC world both through the connections you build and the experience you gain.
Beyond these more structured programs, other funds run official or even unofficial scout programs where individuals (whether students or people working full time elsewhere) can share deal flow with the fund, usually in exchange for some financial benefit tied to the outcome of the investment opportunities they share. Search for more structured scout programs and also reach out to funds to offer your help as a scout even if they do not yet publicly announce scout programs.
Have a plan when getting coffee with people. Reach out to people to meet (and doing the above will help you get in touch with people in the first place!) but also have an agenda prepared before the meeting. The investor may take the lead but more often than not they will look to see how you structure the meeting, take the initiative, and ask thoughtful questions since, after all, these are key aspects of the VC job.
While getting to know the VC world and specific funds through coffee meetings, you should generally have a goal for each meeting of questioning a particular assumption you have about the job. In this way, you can better structure your questions in meetings and leave each meeting with a clear, actionable insight.
Getting the job
Be knowledgeable about topics that interest you. Ultimately, VCs do not care whether your passion is cybersecurity or supply chain logistics or biotech IT solutions or something else entirely. They just want to see that you have closely followed a space and deeply thought about the micro and macro opportunities in this sector. The VC role itself involves tons of constant learning about new markets and new companies, so VCs want to see that you enjoy doing this and have done this of your own accord.
Think outside of the box in finding ways to learn as well. Beyond reading books or newsletters, you can learn more about specific products through connecting with customer support teams at the company in question, for example.
The first person you meet at a fund will likely be your main champion. Focus on developing a strong, meaningful relationship with this first point of contact. If they enjoy getting to know you, they will introduce you to more members of the team, including key decision makers and vouch for you internally.
Show that you have founder empathy and hustle. Regardless of what field you come from, VCs want to ensure you have proper context on the nuts and bolts of the businesses you will be analyzing and are able to translate that into genuine rapport and empathetic relationships with the founders behind these companies.
Beyond this, the large majority of the VC role centers around hustle. As a VC, you are knocking down doors to get in touch with founders in every corner of the world, selling yourself and the fund to get into competitive deals, and getting in touch with hard to reach people to effectively diligence or support a company. Consequently, in hiring prospective VCs, funds look for people who have shown incredible hustle in and/or outside of investing contexts.
Explain why this, why you, and why now. Every fund is different so make sure to articulate why you specifically are a perfect fit for them specifically. Start with the high level answers and move into specific data points and details to support your pitch.
Take a long term approach. VC recruiting is very much a marathon, rather than a sprint. Instead of a couple intense superdays seen in other industries, the full application process in VC is usually more extended. Generally, funds like to ensure that new hires get a chance to really get to know each member of the team separately and in many cases, even work closely with the team on sample sourcing or diligence prior to making offers.
