cdixon - Latest Comments in Getting a job in venture capital

Re: Getting a job in venture capital

Eric Vreeland — Thu, 22 Oct 2009 21:04:09 -0000

Thanks for this post Chris. I'm about to graduate from undergrad and I have been asking this question to everyone I know who has worked in VC. This post and the comments about it were incredibly useful.

Re: Getting a job in venture capital

Michael Chen — Wed, 21 Oct 2009 16:21:35 -0000

I got to know a Glocap Recruiter who was Stanford GSB classmates with one of my former bosses at Ebay, who told me that for the average associate/sr. associate posting they will receive on the order of 2000 resumes. From that they will conduct first screens on maybe 50-70, then have <20 they will send on to the hiring company, which may over 6-9 months lead to 1-3 offers. As many have pointed out above, the numbers can be daunting, but it's not impossible. Churn at lower levels is high, for glass ceiling reasons, lack of fund raising reasons, other totally random reasons.

The best post I have read on this topic is Seth Levine's (of Foundry Group) series of posts on this topic. http://www.sethlevine.com/b... , http://www.sethlevine.com/b...

When I was trying to land an associate gig 1.5 years ago I actually passed up getting an MBA at that time, figuring I'd learn more getting to see the insides of the company building/sausage making process, and I haven't been disappointed at all.

FYI I tweet pretty frequently on the #JuniorVC hashtag trying to give people tips on what life is like as an associate. It would be cool if anyone chiming in on the topic wanted to use the same hashtag, so there'd be an easy for way for people to see what's out there on this very popular topic.

Re: Getting a job in venture capital

chris dixon — Sun, 27 Sep 2009 10:33:45 -0000

more good comments, thanks.

Re: Getting a job in venture capital

Anonymously Posting — Sat, 26 Sep 2009 18:06:56 -0000

I've known people who were at very top tier shops that left because of that glass ceiling. It's just always hard to figure out who helped a company do well... was it the partner or principal? That being said, having sourced a deal gives the junior person a bit more credibility.

One thing I've also seen are situations where junior VCs see something they really like and they hop out of the firm and into a portfolio company to make them successful. That's one way of making it to partner without ever having had "checkbook" experience (and making a little coin along the way faster than being a VC of course). This road is heavily influenced by how much risk you're willing to take though. If you fail, you may not get your VC position back and your risk exposure is to only one company (whereas at a VC firm, your exposure is to a portfolio of companies).

There's another problem going on with the glass ceiling right now. As I alluded to in a prior post, the funding of the VC and growth stage funds are just collapsing because of the situation a lot of LPs got themselves into with liquidity and in general with too much cash going into the asset class with too much money chasing too few good deals. So, if the fund size isn't expanding (if not shrinking) and the senior partners of the firm aren't leaving, then where is a young up and comer to get their way to partner at a major firm? This is where I'll agree with Chris a bit that sometimes it's better to join a bunch of senior junior principals that hop out and start their own VC firms that may not start top tier. There's just a higher likelihood of making it into a partner position when you're at the firm early on.

Last point is this. As I pointed out earlier, networking, networking, networking is the way to get into VC (especially a good one). While I appreciate the thought that it's better to get into a top tier VC fund, not everyone is fortunate enough to have access to getting into a top tier fund. Sometimes, starting at a second tier fund is better from the standpoint that it's a better platform to do networking and finding out what's going on in a geographic region. Much easier to talk to a brand name shop and network when you're from second tier VC rather than being joe schmoe off the street. Maybe you're on boards of companies or speaking at panels where you can meet other VCs. So, I don't think people should blow off opportunities at second tier shops.

On the flip side, just be ready to take the calls for business plans for crap deals they're trying to salvage by getting more dumb money into their companies...

Re: Getting a job in venture capital

Sarah Tavel — Thu, 17 Sep 2009 16:44:42 -0000

I once blogged about our statistics at BVP for hiring a pre-MBA analyst: Of the more than 650 resumes we received, we conducted 42 first-round interviews (~6%), seven second-round interviews (17% of the 42), and eventually extended one offer (14% of the seven, but 0.15% of resumes submitted!). It's a crazy process, and qualities that stand out for a pre-MBA position are different than qualities that stand out for Associate positions. Likewise, qualities for Associates are different than for Partners. For example, for the pre-MBA role at Bessemer, we get excited when we see someone who has had advertising sales experience in the past. I can't imagine a VC firm getting excited about that for a Partner!

Re: Getting a job in venture capital

chris dixon — Tue, 15 Sep 2009 12:10:30 -0000

Thanks! Yeah, when I got my job in VC it was like a political campaign. I had one partner tell me "I've heard your a great guy from 6 people" - which wasn't an accident. I had done so many free projects, favors etc for VCs and startup and then I asked them to make calls on my behalf. It's brutal.

Re: Getting a job in venture capital

msuster — Tue, 15 Sep 2009 12:04:55 -0000

Chris, I'm so glad you wrote this. Everybody asks the question and now I'll just send them the link ;-)

We recently hired an associated. I got > 700 resumes and I didn't even post that widely. 65 of them were of unreal quality in terms of education and job experience. Undergrad: Harvard, Stanford, Wharton, Princeton, Yale & MBA: Harvard, Stanford, Wharton. Many had near perfect SATs and GMATs. Many worked for Goldman Sachs, Morgan Stanley, McKinsey or had worked in P/E or VC before.

It was UNREAL. Not that you need these qualifications to be successful. But when you're staring at 700 resumes (and we VCs don't have an HR department!) you need some way of filtering quickly. In my process I also gave high street cred to CS undergrads - particularly from MIT or equivalent and for premier tech experience: Google, well-known startups or even one great candidate from Microsoft's Xbox group.

From the 65 we did 16 1-hour in-person interviews. We short-listed 6 and did full day interviews including a presentation from the candidate analyzing a market. They were given less than 1 week to prepare. We finalized 3 that we took to dinner to check social fit. We chose 1.

My point is ... the numbers are so daunting that anything "standard" won't work unless you already walk on water. The people who "sneaked into" the process were a) great networkers b) great networkers and c) had other people contact me on their behalf (great networkers). But if you don't have GREAT street cred already don't hassle the VCs. Just accept that it isn't likely you'll get in without doing great things at a start-up first.

Re: Getting a job in venture capital

msuster — Tue, 15 Sep 2009 11:53:51 -0000

Perfectly written and completely spot-on comments.

Re: Getting a job in venture capital

ceonyc — Tue, 15 Sep 2009 11:12:06 -0000

Oh... PS... I wrote this a while back:

http://www.thisisgoingtobeb...

Re: Getting a job in venture capital

ceonyc — Tue, 15 Sep 2009 11:12:03 -0000

Agreed... and many of the "brand names" are very hierarchical, so you
know there's a glass ceiling there.

Re: Getting a job in venture capital

chris dixon — Tue, 15 Sep 2009 11:01:27 -0000

Good point. I guess I'd say just because a firm isn't considered "top tier" doesn't mean they aren't great people. They could be new for example.

My main point is I see a lot of people at name brand firms waiting around to get promoted when if I were them I'd be less brand name focused and more focused on building a track record.

Re: Getting a job in venture capital

ceonyc — Tue, 15 Sep 2009 10:55:50 -0000

"My advice here is to try to get your hands on a checkbook, even if it means leaving a top tier VC and going to a second tier one."

This is one I'm sure I'll have to contend with at some point... How do you sit across the table from a great entrepreneur and try to convince them that they should take money from you if you're on the second tier? Call me naively honest, but there's no way I could take a job at a VC if I didn't think either that the rest of the team was awesome--unless we weren't leading and that the syndicate was awesome.

Re: Getting a job in venture capital

chris dixon — Fri, 11 Sep 2009 12:02:39 -0000

Great comment. Thx.

Re: Getting a job in venture capital

Anonymously Posting — Fri, 11 Sep 2009 11:59:18 -0000

Having been an analyst at a 1B+ early stage fund, here are a couple of observations:

1. Most places won't hire analysts straight out of undergrad. Typically growth PE shops (TA Associates, Summit Partners, etc) will more because they're running around making lots of cold calls to find interesting companies to invest in. That requires a lot of calling and you'll find that they tend to have larger numbers of analysts. Tech banking is one route into early stage VC, but probably not the best. Mainly because the excel spreadsheet skills and valuation skills learned from banking aren't as useful in early stage work (these companies don't have historical financials). I tended to run into more folks who had come out of management consulting (specifically BCG, McKinsey, Bain, etc.). Early stage investing has a lot more to do with understand market dynamics, market growth and barriers to entry. Often times, you're also evaluating markets that haven't even been created. So, hence why the consulting experience is useful to VCs. Entrepreneurs also will make up the third bucket, but the only problem with entrepreneurs is that it's difficult to distinguish yourself as an entrepreneur (unless you made someone $1B - then you go in as a partner at a major firm or have your own). I've met analysts/associates who came in from start-ups, but its not quite as common as the ex tech bankers and management consultants. By the way, I came out of none of the above buckets - but from what I can tell, I was kind of a weird case.

2. Networking, networking, networking is the only way to get a job in a VC fund. Best time to hit up a VC for a job is before the final close of the fund. It's still possible that a VC firm is hiring once they have the final close, but usually the firms know their employee requirements as they get along the way in their fundraising process. So, they'll already be interviewing people, if not have already hired people by the time they close their fund. So, the problem is knowing when a fund is getting ready to have their final close of a fund and that requires having contacts in the industry who know who is raising money. Furthermore, there are a lot of people looking for these jobs. So, half the trick is getting to the top of the stack of resumes (even before final fund closing) and often times the best way is to have a friend within the firm or at least a friend of a friend within the firm. I knew of one firm that got 400 resumes for an associate job. Getting someone to pass your resume along will get you to the top 20 (or so) of the stack and make it more likely you at least get a phone interview.

Network with VCs. Network with portfolio of companies of VC firms you're thinking of trying to get into. Network with folks who are at fund of funds. Maybe even service providers (but less fruitful). Get your resume in through a trusted source. In terms of knowing who is raising a fund, VCs and fund of VC fund folks are the ones who know who is raising what fund.

3. Headhunters work sometimes too. Problem is that they're magnets for talent. So, the pool there may be difficult to compete in unless you've already got VC experience and already at another firm. Headhunters that come to mind are the glocap group and there was this little outfit in Arizona I think that also did a lot of VC recruiting.

4. This point is more for the associate and principal level jobs. Be aware what is hot and what current skill sets are already in the firm. Often times, VC firms may be looking to round out experience and technology knowledge in certain areas. So, if a firm is looking for an associate or a principal, they may be looking for someone (at least in the last three years, but maybe not now) who had social media / consumer experience. If your area of expertise (last I heard) is semiconductors, you're out of luck. I'm hearing that a lot of the semis principals / associates in silicon valley are all rebranding themselves as green / cleantech experts these days.

Last piece of advice is this. Don't get into VC because of the money. I was in VC during the last big bubble burst. In some ways, this one is much much worse because the fundraising from the LPs is collapsing. While your salary will be decent and there may be some bonus from the management fee, don't count on getting rich at any level (from analyst to partner) in the next few years. The other issue is that deal by deal carry went away when the last bubble burst - so no one is seeing a carry check until near the end of the fund life.

Furthermore, what you will see at a VC fund will be very ugly. Be ready to have massive cramdowns of management teams, aggressive terms to crush other VCs (play-to-play provisions in term sheets) and working with restructuring companies. In many ways, what you will see will be very depressing and stressful at times. On the other hand, you will learn more from the experience about how business is done and how people react in weird times that will serve you a lifetime. When things are going well, portfolio company CEOs are out raising money, making sales and everything is going well. They tell the VCs to get lost and VCs generally do since things seem as if they're going ok. It's when all hell is breaking loose that the CEOs want the VCs involved (both to get more brains around the table and in hoping for the next round of funding) and when aspiring junior VCs will learn the most. As a partner used to say to me, any monkey can get an investment into a company, the real work (and 90% of the job) is getting to an exit. This will be the time to learn how to work through companies and get that exit.

Re: Getting a job in venture capital

Rob K — Wed, 09 Sep 2009 07:41:11 -0000

I think you understate the banking career path as a way into VC. Especially here in Europe, the majority of VCs are former technology bankers from the majors (Credit Suisse, Jeffries, etc.). California has a disproportionate number of ex-entrepreneurs as VCs, but there are still quite a few bankers that have made the switch and commute down to Sand Hill now.

For aspirants with a high tolerance for insufferable drudgery, the path up via an investment bank is one of the more plausible paths towards becoming a VC. Work on growth-stage tech M&A or financing deals, understand how the companies operate and you're better positioned than most for a VC job.

Re: Getting a job in venture capital

chris dixon — Tue, 08 Sep 2009 22:18:31 -0000

The cold calls - I've been debating posting about this. 99% of the time they are looking for investments and the motives are clean. They are also looking to collect information, but mostly in a non-nefarious way. They call a bunch of companies, figure out what's hot, and then invest in the best company in the space. Very few will call competitors once they've decided to make an investment in the space.

Re: Getting a job in venture capital

nikiscevak — Tue, 08 Sep 2009 21:07:22 -0000

Another fantastic post Chris. Nothing more to add on the topic but the reason I found it great was that it focused on the junior employees of VC firms. Coming back across the other side of the table how would you recommend dealing with the analyst/junior associates making the cold calls?

Or put another way what is usually the purpose of the cold calls? Is it for the analyst to present an industry analysis to the wider partnership? Are analysts looking to nurse a deal through to a funding (often the outbound interest on their part has no qualification or indication that the firm they are reaching out to is actually raising capital so it would seem an inefficient use of time)? Is the analyst helping to complete due diligence on an investment the checkbook partner is considering making by looking at tangential companies?

I realize it could be all of the scenarios but what's a general handicapping/probability of each?

Re: Getting a job in venture capital

John Gannon — Tue, 08 Sep 2009 20:37:29 -0000

@bwilson, I linked to the VC Careers section of my blog, which has a ton of blog posts, job posts, internship info, etc. I compiled this over the last couple of years while I was searching for a VC job and subsequently when I was working as a VC. I have been out of the VC game for about a month (joined an early stage software startup) but am trying to keep it up to date. Take a look and let me know if you find it helpful.

Re: day-to-day, PE Hub Wire is a great free email blast that will give you a good summary of deal activity as well as VC-backed M&A. And following VCs on Twitter is a good way to keep up with how folks in the industry are thinking about various sectors.

Re: Getting a job in venture capital

David Semeria — Tue, 08 Sep 2009 17:55:24 -0000

Umm. Your advice is factually correct - in these sense that it is useful for getting hired by a VC firm. But is the goal to be just a VC or the be a *great* VC? Investing is an art, not a science. There is no recipe for success. The world is full of me too guys. I see little difference between the entrepreneur who realizes an idea has legs, and an investor who agrees to finance it. They are different sides of the same coin - and we all know that entrepreneurs can come from anywhere...

Re: Getting a job in venture capital

Bryan Wilson — Tue, 08 Sep 2009 16:59:50 -0000

A related question to the experienced voices out there - what should those of us seriously interested in VC be reading on a daily basis (and maybe some one-time reads as well)? I'm looking at this from the healthcare side, specifically, but general suggestions would be great as well. There's so much out there, it's tough to know how to maximize your time.

Re: Getting a job in venture capital

bsiscovick — Tue, 08 Sep 2009 16:04:28 -0000

To chime in with a little more anecdotal experience -

I found the VC recruiting process to be incredibly geography-specific. Stanford and Harvard not only place the most post-bschool VC's because they are Stanford and Harvard (and don't get me wrong, that seriously helps!), but also because they are located in the heart of the two largest and most prominent tech communities in the world. By sheer force of magnitude, these locations offer the largest supply of venture opportunities (the corollary may very well be increased demand/competition for the opportunities...).

However, if you look at the NY region, the vast majority of newly minted post-MBA VC's are Columbia grads - e.g. see RRE, DFJ Gotham, L Capital and Rose Tech Ventures (no slight meant on NYU as I imagine NYU places VCs as well).

And these results should not come as a surprise - venture capital, particularly at the early stages, is innately geography-specific.

On a related note - a major point of entry into VC is through an internship. Top b-schools in active venture markets are breading grounds for VC interns. I ran Columbia Business School's PE/VC club last year and securing internships for our members was our #1 priority (http://www.cbspevc.com/site/).

Unfortunately, even an internship at a top venture firm is far from a ticket to a full-time opportunity. In fact, I would guess that only a tiny fraction of those lucky enough to land an internship eventually land a full-time job. The conversion rate from intern to full-time associate is generally driven by something completely out of the intern's hands - fundraising and or internal associate departures. Absent one of these two occurrences, it is incredibly difficult to land a junior venture position.

Re: Getting a job in venture capital

chris dixon — Tue, 08 Sep 2009 15:59:32 -0000

don't think it really helps.

Re: Getting a job in venture capital

Philip — Tue, 08 Sep 2009 15:57:26 -0000

How is 2-3 years of public accounting as a background before trying to get into vc?

Re: Getting a job in venture capital

OurielOhayon — Tue, 08 Sep 2009 15:48:03 -0000

No It was not an incubator. We funded companies at series A and for
some I seat on boards.

Re: Getting a job in venture capital

chris dixon — Tue, 08 Sep 2009 15:25:39 -0000

I think non top VC firms probably won't have positive returns hence you probably don't want to spend your career there, but if you think you really are a good investor I would say just get your hands on a "checkbook" and prove yourself. With a good track record you can move to a top tier VC.