Recruiting for Venture Capital

I am a second-year MBA student now (still can not believe it) who is being asked for VC recruiting advice by first-years. So I decided to distill some of these conversations and blog about a couple of key points. It might also help my parents (avid readers of my blog) understand my summer job and future plans :)

Venture Capital is very little Finance - Venture Capital deals more with technology risk, people risk and product market risk. With such unquantifiable risk, financial modeling does not yield a compelling valuation. VC deal valuation is based on "use of funds" necessary to get from this round to the next round of financing. Therefore, as a VC, it is important to be technically sound (which is why lot of VC's hold graduate degrees), and competent at judging people. Financial modeling and the use of finance concepts starts when a company raises Round C financing. At this stage, PE firms start to lead the financing rounds. Keep in mind that this is a very simplistic view.   

Most venture firms do not have job openings in a normal course - Only when a new fund that is significantly larger than the previous fund is launched is an opening created, otherwise the opening has to be created by an extremely motivated candidate. How do you do this? There are several ways an entrepreneurial person can achieve this :) I reach out to venture funds and offer my expertise in the energy space to help out on portfolio companies or perform due diligence on a company. Ventures firms love to have smart students help out because most investment professionals are always over worked. An extra body allows the VC's to evaluate and be knowledgeable about deals that would have fallen through the cracks in your absence. As a result, you tend to become part of the investment team and an opening gets created for you. Disclaimer: I do not guarantee this will work but worth a try...

Comments

[truck rental]

Great Information ! My son second Year MBA student. And I think your post is very much informative for him. I have just saved the link. And I will surely tell him about this link. Thank you for post !

[Francis]

I appreciate your honest post here on . As hard as it is to believe, it is possible you overlooked the few things in question. It would appear it has become a little out of hand with a so much of information to manage about . As a experienced person of nearly 15 years, i must say i totally agree with you on .