Yet Another (ex-)VC Blog

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Questions from a PhD who wants to work in VC

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Subscribers from my VC Careers email list (you can subscribe from this page) often email me asking for advice about how to get their first VC job. Below is one such email from a PhD student who is hoping to work in VC. I’ve responded to his questions below in bold.

Hello John,

Following your suggestion, I have recently had an informational intervew/conversation with a managing partner of a VC firm. The overall feedback is good, I felt that he is happy with my qualifications (PhD in —-, and currently working in a —-). Now I have two questions emerged after this conversation, and I think your insights would be very much appreciated on them:

1) The partner said that his firm only hires junior members as analyst/intern who works for them on a hourly basis. He even shared with me the salary that they are paying which is really an intern salary.

My question is: in your book and on your website, you repetively emphasize entering VC is hard, once you are in, you are in. I am really interested in and passionate about a career in VC, but is it worthy for me to enter VC as an analyst/intern, receiving hourly salary ( abandoning a consultant salary and not to mention no additional benefit with an hourly pay such as pension and health insurance etc)?

I wouldn’t create financial stress for yourself in order to break into the VC business.

A VC firm with >$50MM AUM should be able to pay you a salary that will at the very least pay your bills, and even smaller firms will offer basic benefits like health insurance. For example, the firm where I worked ($160MM AUM) had 3 junior professionals and 2 full time partners and we had a great health insurance plan.

Here’s an alternative for you: Have you thought about taking on part time or project based work with the firm? This way you’d gain experience, they’d get the benefit of your services, and you wouldn’t have give up your day job (and salary). One of my friends took this route with a US firm and ended up getting hired (at a livable salary) after a few months of hourly work.

If you want to go the part time / project route, be proactive and propose a project that would dovetail nicely with the firm’s interest areas and your experience. Even if they don’t like the project idea, it will help start a conversation that will hopefully end up with you doing some work for the firm.

Last, I’d leave compensation discussions until the end – when you know they’d like to bring you on board. Talking about compensation during informational interviews will get you sidetracked and take the firm’s focus off of what you can contribute.

You can politely deflect compensation questions in a couple of ways:

  • State that you’d want to be paid similarly to your peer group at other funds of similar size OR
  • State that you’d prefer to discuss compensation later in the interview process once you have a better sense of the job requirements and the particulars of the firm.

2) Secondly, he suggested I could go for a secondary captial firm (secondary buy-out / directs), as he described they are having a booming business right now in life science session. Are you familiar with this kind of VCs? and any difference in the job-hunting tactics with such VCs?

I think the networking tactics (some of which I have outlined in my VC Careers and job hunting eBook) would be quite similar. However, I’m not sure how secondaries firms source and analyze investment opportunities. I’m sure the day-to-day is quite different than what you might see at an early stage VC firm. You’d probably want to do some informational interviews with people with secondaries experience before making a decision if that line of work is for you or not.

If you liked this post, and are interested in careers in venture capital, think about subscribing to my mailing list. I promise not to spam you and will only send information related to venture capital jobs and careers. Please input your email address in the field (and click ‘Submit’) below if you would like to subscribe.

Written by John Gannon

December 29, 2013 at 9:36 pm

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What happens in a VC informational interview

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I originally posted this account of a VC informational interview on my Columbia J-Term Business School Blog in 2007.  You can view the original here.

This afternoon I met with a principal from a late-stage VC here in the city. This was a follow-up to a meeting I had last week (which was made through a connection on LinkedIn via a woman I used to work with prior to business school). I thought it went very well and I think I had a good rapport with the person I met with. He told me to keep in touch and that there may potentially be either an internship or a full-time opportunity in the coming year. So we will see.

Here are some of the questions I was asked, in case you are curious what sorts of questions might be asked of you in a VC interview…

- Why do you want to get into VC?
– What opportunities for investment do you see in the space you worked in prior to business school?
– How did you do academically in your undergrad program?
– Discuss your involvement in vendor selection at your previous jobs.
– Talk about leadership experience you’ve had.
– Tell me about what you perceive to be the functions of the job.

If you liked this post, and are interested in careers in venture capital, think about subscribing to my mailing list. I promise not to spam you and will only send information related to venture capital jobs and careers. Please input your email address in the field (and click ‘Submit’) below if you would like to subscribe.

Written by John Gannon

November 7, 2012 at 9:51 pm

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Bessemer Pre-MBA VC role

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Image representing Bessemer Venture Partners a...
Image via CrunchBase

(Thanks to Mark Davis who forwarded this one to the Blue Venture Community List)

Venture Capital Analyst at Bessemer Venture Partners

Location: Greater New York City Area10010 (Greater New York City Area)

URL: http://www.bvp.com

LinkedIn Exclusive — this job is available only on LinkedIn

Job Description

BVP is seeking an investment analyst to join the firm for a two year analyst program. The analyst role is ideal for someone who is self-motivated, competitive, passionate about technology, and excited about the opportunity to speak with hundreds of entrepreneurs. The position is located in the firm’s Larchmont, New York office, which is 35 minutes by train from Manhattan.

Analysts gain first-hand experience with the full breadth of venture capital activities and work on the cutting edge of business, technology, and innovation. BVP takes a “roadmap-driven” approach to investing by developing investment theses in sectors that are ripe for innovation and proactively reaching out to companies within these areas. Analysts serve a critical role in working closely with Partners and Associates to map out investment roadmaps, predict emerging trends, and identify exciting investment opportunities.

Analysts’ primary responsibility is to interact with hundreds of entrepreneurs each year in an effort to originate new investments for the firm. Analysts are given the opportunity to work in a wide variety of sectors— including consumer Internet, online retail, mobile, enterprise software, financial services, healthcare IT/services, cleantech, and emerging areas of technology. Analysts also work closely with the firm’s senior professionals to develop investment roadmaps and conduct due diligence processes associated with these opportunities.

The Analyst position provides a unique opportunity to experience the role of a venture capital professional, speak with hundreds of executives at high-growth technology businesses, and gain exposure to all aspects of the venture capital investment process.

Skills

Job Requirements

- BA/BS from Ivy League or equivalent institution.

- Outstanding academic record with significant campus leadership experience/extracurricular achievements.

- Intellectual curiosity and passion for technology/entrepreneurship.

- Basic understanding of business and accounting, but extensive study in these areas is not required.

- Comfort proactively contacting and speaking directly with CEOs of companies.

- One to two years of prior work experience at a leading investment bank, consulting firm or technology business is preferred. Outstanding graduating Seniors from the class of 2010 will also be considered.

- Two year commitment in the New York office. Select analysts who demonstrate exceptional performance will have an opportunity to stay for a third year.

Company Description

Bessemer Venture Partners (BVP) is the oldest venture capital firm in the United States, carrying on a tradition of active venture investing that has continued since 1911. With offices in Silicon Valley, Boston, New York, Israel, and India, the firm manages one of the largest venture funds in the industry. Over the past 30 years, BVP has taken more than 100 companies public and generated top-decile venture returns.

BVP was an early investor in dozens of companies that have fundamentally changed industries, including Skype, Postini, LinkedIn, Yelp, Diapers.com, VeriSign, BladeLogic, HotJobs, Gerson Lehrman Group, LifeLock, Gartner, International Paper, Maxim, Parametric, Staples, Veritas, Parallels, Sports Authority, and W.R. Grace. BVP invests across investment stages and across all areas of high technology—including Internet, software, digital media, cleantech, biopharma, healthcare IT, and financial services.

Job ID: 844169

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Written by John Gannon

February 6, 2010 at 4:01 pm

Observations 6 months after leaving the VC business

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Two boys jumping & diving. Dos chicos saltando...
Image by Xosé Castro via Flickr

It has been a little over 6 months since I took the plunge and left L Capital Partners to join VMTurbo.  It has been a great move so far and a huge learning experience.  Unfortunately, this move hasn’t been helpful in maintaining a regular blogging schedule (See “Prioritize relentlessly” section below) so this post has been a long time coming.

I hope some of these personal experiences and observations are helpful to some of my VC friends who have always toyed with taking the plunge, as well as people who may be thinking about careers in VC or in VC backed startups.

And if you’ve played on both sides of the ball, or have thought it about it, chime in with your thoughts.

1) Prioritize relelentlessly. If I was 23, unmarried, with no kids, I could devote 80 hours a week to work.  In fact, that sounds like many weeks at my first startup.  However, I’m now 32, married, and have two kids. :)  Therefore I need to make every working hour as productive as possible-it is just not an option to work on the wrong things.   Fortunately, startups are about results and not “ass time,” so I can be creative with how and where I achieve them.  Another good reason to set 3 goals per day and per week, and devote yourself to crushing them, instead of having 10 TODOs and doing a mediocre job on all of them.  (Better get this blog post done and get back to work…)

2) Beware of spinning your wheels on way-too-early business development. So far I have not heard (or witnessed) any good reasons to put much effort into seeking partnerships right off the bat.  In the software biz, business development is all about taking your product and combining it with the products of other companies to develop a Whole Product.  When you are still doing Customer Discovery and Customer Validation (see Blank and 4 Steps to the Epiphany), you’re still trying to figure that stuff out and aren’t going to have much of an idea of where you can plugin with other companies to make that Whole Product.  An exception to this caveat would be opportunities to use APIs as business development, which in an ever more cloudy world would allow you to create a Whole Product without having to cut any deals.    However, for most behind-the-firewall enterprise software stuff, an APIs as BD strategy isn’t going to make much sense.  (BTW I have heard from friends doing mobile startups that BD is critical in the early stages…so your mileage may vary with this particular tip.)

3) Learn to love “The Ask“. In a startup, you’re constantly asking prospects to take the next step, asking for introductions, asking for feedback, asking for money, asking for references.  You’re constantly asking, when often it is not immediately clear to the receiver of “The Ask” what the benefit will be.  Nothing at a startup happens unless you make it happen-and making stuff happen usually requires an “ask”.  So get comfortable with it!

4) Business development skills and personal network are highly transferable between VC and startup...  Warm intros and getting people to take my calls/emails was a big part of my job as a VC, and its a big part of my job at VMTurbo.  If you’re looking for an escape hatch, moving from VC to business development at a startup is a pretty logical move, and one where your industry network will have the most impact.

5) …and those due diligence tools come in handy, too. Startups play in a world of imperfect information and compressed timeframes, as do their investors.  Being able to get a quick handle on markets, competition, and processes is very important when you’re trying to quickly determine the best route to market, or to pivot and investigate new processes or markets when the first set doesn’t pan out.

6)  Fail.  It’s OK-really. Given the uncertainty within and around early stage startups, there is a better than 50% likelihood that any decision you make on any given day will be wrong.  I’ve never been wrong so many times in such a short period of time :) Just means you need to fail faster.  Get your minimally viable product to the market as fast as possible, hear the feedback, iterate, lather, rinse, repeat.  This really hits home once you actually try it, because you find that erring on the side of releasing something what seems like “too early” is actually the best way to get feedback.  Customers engage most deeply when they can see and touch.  Slide decks and landing pages are nice and can certainly help gauge demand for a solution to a problem, but there ain’t nothin like the real thing.

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Written by John Gannon

February 2, 2010 at 9:47 pm

If you fold at the first un-returned email what hope do you have as an entrepreneur? (via @msuster)

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If you fold at the first un-returned email what hope do you have as an entrepreneur? As an entrepreneur, people aren’t going to respond to you and it’s your responsibility to politely and assertively stay on people’s radar screen. You no longer work for Google, Oracle, Salesforce.com or McKinsey where everybody calls you back. You had no idea how important that brand name was until you left it behind. Your customers don’t care that you went to Standford, Harvard or MIT. It’s just you now. And frankly if you went to a state college in Florida you’re at no disadvantage in the tenacity column. Persistence will pay off.

via 10 skills I look for before writing a check – Venture Hacks.

Written by John Gannon

December 7, 2009 at 5:58 pm

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VC associate role in NYC

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Interesting VC associate role in NYC for someone with ‘big data’ experience and an MBA.  Brief snippet below and more details here.

I am currently spending a lot of time evaluating companies targeting “big-data,” predictive analytics, anomaly detection, machine learning, high-performance computing, data visualization and related fields, and am seeking an Associate to be involved in all stages of the early-stage venture investment process.The successful candidate will be a key member of a small team of highly successful investors and entrepreneurs. This individual will be a highly analytical, innovative and driven self-starter with deep technical experience combined with business judgment.

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Written by John Gannon

September 30, 2009 at 8:54 pm

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Building a business before raising money

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SEOmoz was also helped in this deal by an important factor I think every startup should consider – WE DIDN’T NEED THE MONEY. We were already profitable and growing, already had a brand name in the industry and had attracted interest from multiple investors. I think that every entrepreneur who’s considering startup-dom should think about establishing those goals before they go for institutional capital – a profitable, growing company with a product that’s on the market and a brand name that’s well known makes you:

* A) Lower risk to investors

* B) Interesting to multiple parties and multiple kinds of investors (angels, VCs, private equity, etc.)

* C) More confident in every step of the process

* D) Able to walk away from a deal you don’t like

This psychology is so powerful that I can’t imagine doing it any other way. If I wanted to build a travel portal to take on Kayak.com, I’d start a great travel site (maybe even just a really interesting blog), build up some brand recognition, use advertising or low-cost premium features to drive revenue and only after those numbers made for a compelling story, approach investors. I’d use that same formula even for a capital intensive business – start with cool ideas, great writing and valuable resources, become a hub for your industry, show web traffic and positive interest, then go fundraise.

via SEOmoz | My Startup Experience: VC, Entrepreneurship, Self-Analysis & The Road Ahead.

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Written by John Gannon

July 1, 2009 at 1:56 pm

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