Jobs in the venture capital industry are in high demand these days. The lure is undeniable: successful VCs profit wildly from entrepreneurs’ hard work.
Two questions I hear frequently are: is VC the right fit for me, and if so, how do I land a job? If my recommendations sound taxing, you may simply lack the appetite for a VC career. Interest in technology, entrepreneurship and startups is essential for the job.
In all interviews your objective is to demonstrate you’re uniquely capable of excelling at the most challenging aspects of the profession. VC is no different. So, this begs the question, what makes a good VC? In my experience, the three essential components are deal flow, instinct, and personality fit.
Deal flow depends on the quality and quantity of investment opportunities you source. With inbound deal flow, acquaintances inform you of companies raising capital. Outbound deal flow involves identifying interesting companies and finding proactive ways to create a relationship with them. Though inbound and outbound deal flow are equally important, they require vastly different skills.
These days, inbound deal flow depends on savvy use of personal and digital communication. For this reason, VC is frequently described as a networking profession. High-profile deals often require a “warm intro” to get you into the fundraising process. This requires friends who are integrated into the technology ecosystem, ranging from entrepreneurs and other investors to writers and industry visionaries.
Unfortunately, name-dropping in interviews will probably make you look like a jackass! Instead, demonstrate your ability to connect with entrepreneurs. Describe your passion for technologies which revolutionize consumers’ lives or improve the efficiency of business processes. My brother once told me you have to “sell for the right to buy.” What he meant is that you have to connect with entrepreneurs’ visions for them to believe you’ll be a valuable partner as they build a business. Demonstrate that you share the enthusiasm and you’ll be well on your way to convincing VC firms that you can be a valuable resource.
Making “a digital home for yourself” is another important way to demonstrate your immersion into the technology ecosystem. If Google doesn’t retrieve tech-relevant results within the first page of a search for your name, you are missing out on an important opportunity to distinguish yourself from other applicants. Some means are:
–Blog. Keep it current and comment on the other technologists’ and VCs’ blogs.
–Tweet. Follow all the smart tech people, and tweet about relevant and interesting items in the tech world.
–Be a Beta user. Try out all the exciting technologies like Dropbox, Tumblr, Instagram and Quora as they’re released onto the market.
Outbound deal flow is an entirely different beast. Investing entails identifying interesting markets and the companies addressing those markets most effectively. It also requires intimate familiarity with
historical and current trends in the tech and startup ecosystems.
Share with interviewers that you are an avid reader of all tech publications, ranging from Techcrunch to Tnooz. You should be capable of rattling off the most exciting companies, what they do, how well they are doing, and so on. For practice, pick a few interesting areas, like mobile social media, and figure out the most exciting new companies in them, like Instagram and Path. Make sure you’re also familiar with the underlying technologies like Android vs. iOS operating systems, Facebook Connect, etc. During interviews, make a special effort to weave tech factoids into your answers to basic questions.
For instance, when I ask college kids why they are interested in venture capital, they really impress me with answers like: “Well, I spend a lot of my free time thinking about awesome new consumer technologies. Working at Bessemer would let me be close to businesses like Instagram which use photography and geography to connect people on iPhones. The prospect of taking a professional interest in something that intrigues me personally is really appealing on an intellectual level.”
At this point, I stop asking run-of-the-mill questions and start having a bidirectional dialogue about new companies and whether or not they’re interesting. As long you can hold your own, you’re more or
less assured of getting to the next round. On a handful of occasions, I’ve even reached out to interesting companies that interviewees told me about!