e’ve said it many times on this blog, and we’ll say it again - venture capital can be a tough industry to break into. It’s quite difficult to find a VC job that’s entry level, and even when you do, they rarely go to college graduates – only those with tons of experience and past internships at reputable VC firms seem to get those opportunities.
With that being said, VC is a great industry to work in, which is why so many people desire jobs in the industry. The sheer amount of applicants competing for jobs could discourage even the most optimistic of people.
But if you are truly passionate about VC, keep at it!
Most of the people working in the industry were once in a similar spot as you and had to work for many years to get where they are today. If you want to break into VC but have no experience, here are five ways to start padding that resume.
1. Learn the business
Okay, maybe this may not jump off the page of your resume. But trust us, this will prove invaluable once you make it to interviews. It’s also one of those things that most aspiring venture capitalists will take up on their own.
A lot of people just assume that VC is the equivalent to throwing darts at a board and hoping that you’ll hit a bullseye on your 10th try. But there’s so much more to the industry. Hence why you need to study up. This means learning the different components of the term sheet, learning how cap tables work, learning how to model out a startup’s projected revenue, their market size, burn rate and a lot more!
If you can show some of your models to people in the industry it will go a lot farther than just saying that you’re bullish on a certain sector. With the internet, there are also plenty of free resources that can help you learn this material without spending too much money.
2. Join a startup
Venture capital is the business of investing in startups. So naturally, the best way to get to know this business is to first be a part of it. That’s why so many former startup founders end up in VC. Joining a startup is likely going to be easier than getting a job in VC because there are lots of startups out there at various stages.
The goal is to obviously join a startup with a bright future, which could turn into a tremendous opportunity of its own but being a part of a pre-seed startup can also be helpful, even if it eventually fails. You get to see firsthand how everything works: the difficulty in gaining traction, making the first sale, the pressure on the startup founders, the amount of work required, the difficulty in raising funding, and much more.
This experience is invaluable and will help you better relate to startups and their challenges once you are a VC yourself. If you can’t join a startup full-time, there are other ways to get involved, whether it's joining one in some kind of part-time capacity or serving as an advisor if you have a special skill set. VCs love to see startup experience on the resume – it speaks to your work ethic and passion for the industry.
3. Try Your Hand at Investing
With the internet and the rise of crowdfunding, you can go invest as little as a few hundred dollars in startups online. But don’t just throw money at it blindly. Approach it as you would if you had your dream job in VC and the entire fund is counting on you to produce.
Go in and do extensive research on the company, the industry it’s in, and the addressable market. Try and speak to the founder and get some financial information on the company like an analyst would. Do your best to model out some projections. Bring it all together and write a blog post about it. Then share it on Twitter and LinkedIn to start getting your name out there. It’s not about picking 10 baggers but demonstrating your thorough and unique approach to investing.
Maybe part of your research intrigued someone in the industry and lands you a phone call. It can also be pretty powerful to have a line on your resume that says, “Conducted extensive due diligence on and invested in X startups that did crowdfunding,” and then link to your blog.
4. Start networking
A huge amount of VC is about who you know. You want to be hooked into the industry so you can identify startups to invest in early before everyone else and so others will funnel startups your way as well.
A big reason a VC might be interested in you is if they think you have a huge network and a reliable method for sourcing good companies. There are a number of ways to approach this but you can really do them all at the same time. Reach out and have conversations with people in the industry – anyone who will talk to you.
Start a newsletter featuring startups in some unique way. Go to VC networking events and pitch contests, hang out around accelerators, and check out what’s going on with college startup programs. Hold a startup event of your own. If you do enough of these things, people in your local VC scene will get to know who you are, which will help on the networking front.
5. Try to lock in an internship
We wrote a whole separate post dedicated to this one. Lastly, getting some actual experience working with startup investors can go a long way to showing prospective firms that you’ve done the job and are ready for all the challenges the industry might throw at you. We listed this phase last because you’ll likely have to do the other steps first before landing an internship, although there is no right way to break into VC.
Getting an internship in a competitive industry like VC can be tough even if you do several or all of the steps above, so don’t sweat it if you aren’t getting noticed by the big players like Andressen or Sequoia because there are plenty of smaller funds that you might be able to wedge your way into. Or perhaps there are some angel investors or groups that might let you do some due diligence for them.
Smaller funds or investors may not carry the same brand value as a big firm but they may be more helpful in the long run because you will likely get to play a bigger role in the investing process. Maybe some of the investments will turn into big winners.
A few internships at smaller funds may even snowball into landing a bigger internship or a job at a more reputable fund. You may also find that you enjoy working with smaller funds and playing a larger role in the process.
Again, there is no one-size-fits-all approach. Everyone has a different path.
Don’t give up!
