How To Get Into Venture Capital?

Venture capital jobs are provided by the venture capital firms who provide the funding to startups or businesses which are in their early stages that are generally risky to get into the field of venture capital; one should have the required degree, where getting the MBA degree would be an added advantage along with excellent skills of communication.

Venture capital firms provide much-needed capital to businesses based on a detailed assessment of their potential as a worthy investment. Usually, they provide funding for early-stage enterprises or startups; however, they may also choose to invest in late-stage businesses depending on several factors.

Venture capital is an exciting field to work in. Still, aspiring individuals need to possess the necessary knowledge and skills, and the right attitude to be a success.

For your benefit, you can find the below summary of how to get into venture capital firms.

While networking might work well for early-stage and smaller VC firms, it may not always be the case as late-stage firms and larger VC firms usually hire headhunters, so it would be recommended to seek their help instead.

It is important to position oneself in keeping with the kind of VC firm one is applying for, and it would be even more important to choose VC firms with a certain type of focus area that aligns well with the skill set.

It is important to remember that although VC might look similar to investment banking and private equity in terms of desired skill sets, the similarity ends right there.

In VC, there is a greater focus on hiring individuals with more of a presentable personality, excellent communication skills, intelligent opinions on investing in companies, and a genuine interest in startups and technology.

The interview process in VC is likely to be more informal than in investment banking and private equity. One should be confident in expressing opinions on specific companies and how they might fare based on relevant factors. Analysis of companies should be more market-oriented instead of product-oriented since the former approach holds greater relevance in VC.

In the past decade, business dynamics have changed greatly, and market competition has intensified for new businesses. This is why how to get into venture capital investing are hogging the limelight as startups are vying with each other to find long-term investors. So naturally, this has also spurred greater demand for skilled and competent venture capital professionals who enjoy some of the best career prospects in the financial industry.

You will find below our helpful guide on how to get into venture capital.

While it would be useful to list any deal experience one possesses, additional details about working with top-level executives would be helpful to get a venture capital job. Any experience in business development or market sizing might also be relevant.

• Listing your credentials might sound good, but it would be better not to stuff too much information and keep a resume short and simple. However, if you have earned an MBA or other relevant credentials from a top institute, don't forget to highlight it.
• In general, VC firms look for people with presentable personalities and a keen interest in startups and technology. If a resume successfully creates this impression, it might be very helpful.

Usually, interviews at VC firms are far less technically structured, unlike investment banking and private equity. For example, candidates might not be asked to take any financial modeling case studies or other technical assessments, as is common in investment banking or private equity. Instead, a VC interview might be carried out in an informal setting, maybe even as a casual conversation over lunch or breakfast. Typically, they are more interested in finding out how much the person is interested in the field and if they are passionate enough to excel in the field.

• Many VC firms pay less than private equity firms, and though prospects are good, they would not prefer to hire someone whose main motivation to work in the field is the kind of perks it offers. It can be considered a turn-off as the person might have a small real interest rate. This is why they are more attuned to the idea of a 'cultural fit' compared to most other fields.
• However, firms more or less inclined towards the private equity side might also prefer to go along with technical assessments. If applying for an alternative technology company, one should be prepared for questions related to technological innovations in the field.

One of the most important points one must keep in mind is that VCs are not only looking for good industry knowledge but also well-formed opinions on industry and companies. For an investment banking professional, more of a balanced and neutral view of the industry might work well; however, on the buy-side, when you have to invest in businesses, you need more of an opinionated approach to be successful.

Aspiring VC professionals should be confident in expressing their opinions about the industry at large and specific companies and how they view their prospects based on certain key factors.

Focusing solely on the products instead of the company's market position might also not impress the interviewer as much since investments in VC are primarily market-driven business decisions.

In closing, we might add that venture capital is set to grow fast in the emerging markets of India, Brazil, China, and Canada, which might be all the more reasons why aspiring VC professionals might look forward to exciting opportunities in these markets.

Even though this is a very lucrative industry to work in, where a huge number of applicants compete for an opportunity, prior experience is an important plus. But in case a candidate does not have that, there are a few ways which can help.

• Knowledge about the business – A thorough knowledge about the work process, the business, the various components, steps, rules etc, proves very important during an interview even though the candidate has not actually worked in the field. This often includes learning about creating models of revenue projection, calculating market sizes, creating term sheets, etc. Such knowledge helps a lot which is easy to gain from various online resources.
• Experience in startups – Since the main objective of venture capital is to fund startups, working in similar job environment will be a great experience. It is not important whether the business has a good future prospect. Mere learning, even if it is from an idea that does not succeed well, will add value. This will help relate the challenges and benefits well with the job later.
• Investment experience- Investing in startups is also a great idea to learn about the business. The idea of how to get into venture capital investing, however, should be done carefully and with seriousness. First, it is necessary to do some research on the business regarding market size, background of founders, and financial condition, read social media posts about them, and after a thorough knowledge, invest in it. Such research may attract companies looking for candidates with curiosity and the urge to learn.
• Networking – Net working is a important way to know more about this field. Approaching and communicating with people in the industry, creating newsletters, blogs about startups, organizing startup events, contests, etc will put the candidate in the limelight for VCs to know. Good network means lots of sources who are reliable and experienced enough to invest.
• Internship – Some experience, even if it is just an internship can help to a great extent to prove that the candidate has knowledge regarding the possibilities and challenges in the industry. Though it is competitive, getting internship in even small startups and doing proper due diligence for them dedicatedly is valuable. Small firms actualy give bigger opportunity and exposure to invest or learn.

However, each candidate may have their own approach to get into this industry. But the above steps should prove helpful.

This article is a guide on how to get into Venture Capital. Here we discuss the strategies and tips for breaking into a venture capital firm. Also, we discuss resume building and top tactics to handle Venture Capital Interviews. You may learn more about Venture Capital from the following articles –

• Venture Capitalist Salary
• Angel Investment vs. Venture Capital Differences
• Private Equity vs. Venture Capital
• Private Equity in Dubai