The competition to get into venture is intense.
There are approximately 800 venture capital firms in the US[i], employing 5,500 venture professionals[ii]. Given this small number of firms and people, we estimate that the industry recruits fewer than 1,000 roles annually – and this is before accounting for other limiting factors like the firms’ location, specialization and culture, or the level and salary of the open position.
For any one advertised role in venture, it’s not unusual for hirers to receive hundreds of applications, and for the most part, positions aren’t advertised, but filled through word-of-mouth, networking and talent specialists.
So, to get the right role in venture capital and a foot in the door, you truly need to stand out from the crowd.
Specifically, candidates wishing to enter the industry for the first time, need to build a resume that demonstrates three key competencies:
1. A real-world understanding of how venture works
2. A proven ability to build specialty networks
3. A thoughtful approach to analyzing emerging markets and technology
We discuss these in more detail below.
1. A real-world understanding of how venture works
Venture capital employers are looking for candidates who understand how venture works. You may not have worked in the industry previously, but can you demonstrate your knowledge and passion for the industry? A few ways to show that you understand the business basics include:
- Showing work experience (including internships) in a venture firm
- Taking venture or private equity courses
- Joining or managing an angel network
- Investing as an angel
- Hosting ongoing forums that stimulate and support early stage companies
- Advising a venture fund or prominent accelerator or incubator program
- Starting your own business
- Helping to raise capital
VCs recruit people who understand how the venture ecosystem works from the inside, know the basic terminology (and maybe also the basic metrics/ calculations), and have proven that they enjoy working with the level of ambiguity and – let’s face it – unconventional behaviors and unusual stresses, that are unique to venture. VCs also want to see that you’ve had first hand exposure to a broad range of entrepreneurs: the good, the great and the terrible, and you have views on how to identify one or the other.
2. A demonstrated ability to build specialty networks
Whether you are an experienced hire, or seeking a junior role, it’s important to show that you bring an existing network with you. Venture analysts and associates need to leverage their networks to identify and attract entrepreneurs to their firms. More senior personnel are expected to bring domain expertise, and their associated specialist networks that they can leverage for diligence and activation purposes. To demonstrate the existence and ability to build these networks, hiring firms often look at:
- The scale and demographics of your social media followers (particularly on Twitter, Linkedin, Medium, Facebook and other forums)
- Whether you are considered an industry maven on a particular topic (demonstrated by your speaking, panel and media engagements, your quotes in media, your advisor and board roles, and articles and books you have published or been quoted in)
- Your role in managing or participating in relevant industry groups, meetups, associations and hackathons
Your network must include a good number of emerging companies, as well as, professional advisors, technical specialists and angel/ venture investors who are relevant to your focus and interest areas.
Our advice: if you don’t currently have these networks, start building them now. It’s never too soon to start, and you won’t succeed without them.
Venture firms that are hiring will be very interested in the value and breadth of your networks. Consider your network a personal asset that you need to cultivate.
3. A thoughtful approach to analyzing markets
Arguably the most critical skill required to be a successful investor is opportunity identification. This is the ability to:
- Identify attractive markets,
- Categorize the emerging companies in those markets, and
- Determine which companies represent the best investment opportunities within those segments.
At the most simplistic level, venture firms will examine a candidate’s investing track record to see whether the person has demonstrated the ability to invest in successful companies. Most angel investors don’t yet have any exits yet (it can take 8 – 10 years to realize investments after an angel round), and so, when interviewing angel investors, the VC selection process typically reviews the companies a person has invested in to understand the rationale that an angel investor used to select one particular company, over others, in a similar segment.
If you are not an experienced VC or a disciplined angel investor, there is another way to demonstrate you bring this thoughtful approach. We call it “market mapping”. Analysts and associates in disciplined venture funds spend a significant portion of their time reviewing an emerging market, identifying the companies in those markets, categorizing these companies, and then forming an investment thesis about the specific companies to pursue. These outputs are then presented in a market map (CB Insights has some good examples of high level market maps). To really nail the interview, candidates should present a market map for an area they feel is interesting (ideally, also relevant to the investing lens of the firm they are interviewing with), and explain the categorizations they have identified, the investment thesis (i.e., the ideal attributes for target investments in the sector) and be able to articulate two or three investment opportunities on the market map.
Venture is an incredibly rewarding industry and career, but not for the faint-hearted.
Before considering a job in the VC industry, make sure that you know what you are getting into and put in the upfront work to build a resume that stands out from the crowd: know the business terms, and build a deep business network. In parallel, develop and act on an investment hypothesis to build a track record that can demonstrate your ability to analyze markets, and act on your findings.
About the Authors
Hilary Gosher (@hilbil175) is a Managing Director at Insight Venture Partners where she leads Insight Onsite, the firm’s team of growth experts who help scale Insight’s portfolio companies. Hilary founded this team in 2000 and has worked with more than 100 software, Internet and mobile companies. The Onsite team leads Insight’s due diligence and has expertise across the talent, product and go-to-market functional areas of software businesses, as well as M&A.
Hilary is currently a Board member or advisor to Datasift, Drillinginfo and Turnitin. Prior investments include Argus Software (acquired by Altus Group), Medidata Solutions (IPO), OverDrive (acquired by Rakuten), Planview (acquired by Thoma Bravo), Primavera (acquired by Oracle), Scriptlogic (acquired by Quest Software), Shunra (acquired by HP) and Vertafore (acquired by Hellman & Friedman).
Hilary is an Adjunct Associate Professor at Columbia University’s School of International and Public Affairs (SIPA) where she teaches tech entrepreneurship. She held the same position previously at NYU’s Stern School of Business. She is a co-founder and Board member of Parity Partners, an organization focused on driving gender diversity and inclusive leadership and decision-making in the alternative asset industry.
Claudia Iannazzo(@claudiaiannazzo) is a managing partner and co-founder of AlphaPrime Ventures, a New York based venture capital firm investing in technologies that protect people and assets. Claudia has been investing in and working with technology companies for over 20 years, and has facilitated more than $10 billion of acquisitions, divestments, IPOs, investments, alliances and partnerships for public companies and new ventures around the globe.
Since starting her first company in compliance management while at University, Claudia’s career has spanned 5 continents, working on a broad range of safety and security initiatives, ranging from patrol boats in Vietnam, to remote location logistics, to NATO and other defense programs as Head of Commercial for the Weapons Systems division of BAE Systems. She has also been a commercial executive with numerous multinational companies, including Infosys Technologies, Tabcorp Holdings and Fosters Group.
Today, Claudia lives in New York with husband, daughter and two dogs, and spends her days investing in the next generation of innovations that keep her family, friends and city safer from emerging threats. Claudia is also a co-founder and Board member of Parity Partners, an organization driving diversity and inclusive leadership in the investment industry.