There’s something special about venture capital that draws people to it. Maybe it’s getting to work in the world of startups; maybe it’s the big bets and even bigger returns.
Thousands of new aspiring venture capitalists try to break into the industry every year. It isn’t easy, and the barriers to entry can sometimes make it seem impossible. However, with the right combination of education, experience, personal aptitude, and a lot of luck(!) you might be able to land your first role in VC.
In this guide, I’ll break down the education, work history and skills that can help you get your foot in the door with venture capital firms.
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What degrees can help me break into venture capital?
How much education do I need?
Pre-MBA (Analyst or Associate)
Post-MBA (Associate or Senior Associate)
PhD or MD (Associate, Senior Associate, or Principal)
What about work experience?
Management consulting
Investment banking
Operating experience at a startup
Experience at a big tech company
Key takeaways
What degrees can help me break into venture capital?
In a 2018 survey of American and Canadian VC partners conducted by TechCrunch, the publication found:
- 27% had undergraduate degrees in technology or science (the most significant group)
- 26% had majored in social sciences, mainly economics
- 18% had business degrees
An undergraduate degree in finance, economics, or business administration provides a strong base for venture capital. Given that many startups are tech-oriented, a degree in engineering or science can also be invaluable for startup assessment and sourcing.
Interestingly, the survey also pointed out that around 70% of the investment partners had graduate degrees, predominantly MBAs.
How much education do I need?
Let’s break down the typical education requirements for non-partner VC roles.
Pre-MBA (Analyst or Associate)
If you’re eyeing this role, firms generally hunt for youngsters under 25 with 1-3 years of experience in investment banking, management consulting, or tech companies. These positions usually aren’t on the partner track. After a few years, you’d likely transition to an operational role at a portfolio company or jet off to business school.
Post-MBA (Associate or Senior Associate)
The post-MBA scene is a tad different. Whether you’re on the partner track is a toss-up. If you stick around for a few years and clinch a promotion to principal, it’s a nod from the firm seeing you as potential partner material. But it’s not rare to find post-MBA VCs shifting firms due to structural constraints or hopping into operational roles within portfolio companies.
PhD or MD (Associate, Senior Associate, or Principal)
Got a PhD or MD? Biotech-focused VC funds often scout for such credentials to fill their nonpartner ranks.
Remember – Even if a firm’s job ad seems fixed on a specific educational level, remember, they’re hiring! If you don’t perfectly fit the bill, take the leap and reach out.
Setting up an informational interview can work wonders. Given the often fluid hiring processes of these firms, meeting the “right” candidate could prompt them to rethink their prerequisites. So, gear up, present your story effectively, and remember, flexibility is key in the VC world.
What about work experience?
Your work experience, whether traditional or unconventional, can be a strong asset. Let’s explore some common career paths and how you can leverage your background.
Management consulting
VC firms investing in later-stage companies or assessing early-stage markets highly value skills from management consultants. If you’ve partnered with tech companies, highlight this in your pitch. Enhancing your resume despite a rigorous consulting schedule? Emphasize your commitment and readiness for a VC role.
Investment banking
Investment bankers bring crucial analytical skills. Venture capital revolves around deal-making, so spotlight any direct deal experience. Remember, even if you’re from a smaller banking institution, your experience with startups remains relevant.
Operating experience at a startup
Working at a startup offers vital insights into company operations. If you held a leadership role, make sure to underscore its significance in discussions. While a startup background is beneficial, VC firms also seek individuals who can resonate with and earn the respect of entrepreneurs.
Experience at a big tech company
Roles in major tech corporations provide solid industry knowledge. Many VCs have backgrounds in product management, product development, or business development. Product managers can provide unique product insights, while those in product development can evaluate novel technologies’ potential. Engaged in corporate development? Highlight mergers and acquisitions experience. Business development professionals should leverage their expansive networks and partnership skills.
In essence, position your background effectively, and remember: it’s all about presenting your story compellingly.
Interested in a deeper dive in venture capital? Check out the VC SAFE Practice Problem for an Excel Workbook that shows you exactly how to model out a post-money SAFE.
Key takeaways
A significant number of VC partners hold degrees in fields like technology, science, economics, or business. However, it’s crucial to remember that a rich industry experience, especially from the startup ecosystem, can be just as impactful.
Your work history plays a pivotal role. Those with backgrounds in management consulting, investment banking, startups, or tech companies tend to have a leg up. It’s essential to weave your experiences into a compelling narrative, showcasing how your unique skills and insights can add value to a VC firm.
While it might seem that VC firms have strict hiring criteria based on education, the reality can be more flexible. If you come across a position that aligns with your passion and expertise, don’t hesitate to reach out, even if you don’t fit the educational mold perfectly.
