VC Recruiter Jon Holman on the VC Job Scene, Nine Months Into Downturn

Jon Holman is a San Francisco-based recruiter who has hired roughly 40 general partners and five times as many CEOs in his nearly 30-year career. His clients include Accel Partners, Lightspeed Venture Partners, Mayfield Fund and Opus Capital, among about 50 others. Earlier today, we spoke about the venture industry, how quickly it’s contracting and where many VCs may next find themselves.

Yesterday, a reader seemed to take issue with the word “exodus” to describe what’s happening in the venture industry right now. But it does seem like many more VCs are leaving the industry than joining it or finding homes at other firms. What are you seeing?

There’s a lot of movement; there’s no doubt about that — except “exodus” implies that they are leaving by choice, and that’s not generally the case. It’s not just 10 or 20 or 30 people who are looking for new jobs. A lot of people have to find something new to do.

This isn’t the first time that the population of VCs will go down, but this will be the biggest percentage. And they’ll all have to go somewhere.

Is anyone hiring?

I’m doing one GP search. Highland [Capital Partners] has been doing a GP search for a year now. But it has to be a group of firms you could count on one hand [that are hiring], which, by the way, I think is good. There’ve been way too many people and way too much money in the industry in recent years. Of course, that doesn’t mean it isn’t painful.

Are VCs still trying to land other jobs in the industry or do most recognize the writing on the wall?

I’m still getting a lot of calls from VCs who either want to leave the firms they’re with or have already left the firms they were with. I’m probably hearing from three times as many people as a year or two ago. That fact that there aren’t a lot of VC jobs doesn’t mean there are none. And a lot of VCs have had successful lives, so they don’t throw in the towel easily.

I literally don’t know of anyone who hasn’t first spent a lot of time trying to find something else in VC before saying, nah, this isn’t happening.

Some seem to be starting their own companies, like Sim Simeonov, who just left Polaris Ventures to form a startup advisory. Is that becoming a more natural path?

It depends on what they were before. If they came out of Stanford’s business school and went directly into VC, there’s no special reason to think that they’d be good entrepreneurs. I don’t think most VCs without operating experience are going to leave the industry and try to go and start a company. That said, I think inevitably there will be many more people starting their own companies than we’ve already seen.

Where else will we see VCs land?

Some people from second-tier firms might wind up in other firms without a partner title, or as venture partners instead of general partners or in some hybrid relationship that’s somewhere in between.

Others whose firms have done later-stage investing might join buyout kinds of things, like Paul Bartlett [long a GP at the Sprout Group who joined Rho Venture Partners in 2007 to focus on late-stage and growth equity deals]. There’s some of that.

But many of them will attempt to work with entrepreneurs, putting in angel money if they have it, or finding people to put in angel money. I think that’s the most obvious way to go.

You make it sound like these transitions have yet to come. Where are we in the whole downsizing process?

For all the upset we’ve already seen, we’re probably relatively early in the stages of people getting out of VC. Someone could know now they can’t raise another fund, but they could have another year or two of things to do in the industry before they’re forced to find something else.  A lot of funds raised in 2000 are coming to the end of their lives. All the people in those firms are going to have to go elsewhere.

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