Why not you? Tips on breaking into a career in VC.
At Harvard Business School, less than 1% of each graduating class acquires full-time employment in venture capital. It’s certainly not for lack of interest, as venture capital remains one of the most sought-after careers among business school students. It’s undoubtedly an exciting field of work. Daily responsibilities include discovering and evaluating breakthrough technologies, working alongside inspiring entrepreneurs, and growing companies with the potential to change the world. It’s challenging work, but there is huge upside, both financially and in terms of personal fullfillment. The question I receive most often is “how do you get into VC after business school?” Here are my top 4 tips for breaking into VC.
Network, Network, Network
The single most important asset of a VC investor is her or his professional network. A robust network helps you connect entrepreneurs with potential customers, partners, employees, and other VC investors. As a prospective VC yourself, you should be aggresively building your own network ahead of time. Moreover, the recruiting process in VC is notoriously haphazard, disorganized, and rushed. Positions will rarely be posted online; instead, it’s largely based on word-of-mouth recruiting. While this may seem archaic, it’s actually a remarkably effective method to recruit strong, well-networked candidates. One of my mentors and professors at Harvard Business School, Prof. Matthew Rhodes-Kropf, uses the analogy of a VC firm as a house with a single doorway. When a VC needs to hire an Associate, they quickly open the door and grab one of the few people who happens to be standing there. Your goal should be to be one of the people standing at the doorway. In other words, you need to be both a person that the VC recently talked to and a person they could see as a strong fit with their firm. The best way to start this conversation is to simply ask for a 15 minute phone call or in-person meeting to ask a VC about their experiences or portfolio companies. Explain to them your ambitions to work in VC and why you think their firm is an especially good fit. If they aren’t currently hiring, ask them if they know of any other firms that might have open positions and if they wouldn’t mind providing an introduction. Set a goal for yourself to reach out to 10 VCs per week as a starting point, and see where it goes.
Acquire relevant experiences
Getting direct VC experience is difficult, but not impossible. For example, I spent a summer working at Cue Ball, a venture capital firm based in Boston, in between my two years at business school. In addition, I know of other students who worked for half their summer at a VC firm and half their summer with one of VC firm’s portfolio companies. In either case, the pay will be modest (at least compared to your consulting classmates), but the experience itself is worth far more. Working at Cue Ball was an outstanding experience that opened my eyes to the career I wanted in the future. The experience also gave me credibility when applying for full-time roles in VC. If a summer internship isn’t possible, I recommend working on an independent project with a VC firm during the school year. At Chrysalix, we recently started running this type of program with top business school students. It’s a great opportunity for you to get some VC experience and course credit toward your degree, while the VC gets access to your time and brain power. Even if the firm of your choice doesn’t have a history of doing these type of projects, you should pitch them the idea. I also recommend getting experience at a startup, if possible. Starting your own company is ideal. You’ll never gain a greater respect and appreciation for entrepreneurs than if you become one yourself. Working for a top-quality entrepreneur would also be a great experience to have on your resume, perferably in a portfolio company of a VC you admire. Don’t be afraid to take some risks. After all, VC investors tend to have a higher risk profile than most.
Stay up to date on innovation
If you really want to be a VC, you need to know what’s going on in technology and venture capital. You need to be up to date on the latest in terms of what technologies are creating buzz, who’s getting funded, what companies recently failed, and what VCs are raising new funds. I would recommend reading TechCrunch and VentureBeat on a daily basis. If you are an energy-tech person like me, I would add GreenTech Media and GigaOm. Another great resource is the StrictlyVC daily newsletter, as it synthesizes all VC activity across the globe everyday and sends it directly to your inbox. You should also be an early-adapter of technology yourself. You will raise eyebrows if you aspire to become a tech VC and you don’t even have a Twitter account. You should be an early adapter of all the latest apps and services. The important point here is that you can’t fake passion for technology. You have to live it everyday. If you can’t meet this requirement, then you should rethink how much you really want to be a VC. There are plenty of people that do this as easily as breathing, so you won’t stand a chance if you don’t make this part of your routine.
Be lucky
The one common thread I’ve found in talking to other VCs is that luck played a substantial role in starting their career in VC. For better or worse, it largely comes down to being in the right place at the right time. If you take all the advice above, you still might not land a spot at a VC after business school. And it’s not because you wouldn’t be a great VC. The fact is that the odds are stacked against you. For many people, the probability itself is the main reason they choose not to pursue this path. But, as former VC and now successful entrepreneur Jess Bloomgarden once said to me, “Every year VCs hire about 10 business school students. Why not you?” If you’re really passionate about VC and you put in the necessary leg work, you will drastically increase your odds of getting lucky.