Yet Another (ex-)VC Blog

I just heard that Highland Capital Partners is hiring a Senior Associate for their IT/Communications venture capital investment team.  The role is based in Cambridge, Mass.  They are a highly regarded firm and I have some personal experience with them (did a project for them in business school and also worked for one of their portfolio companies, VMTurbo).  It’s a great firm and if you’re looking to learn the venture capital business, it would be a great place to cut your teeth.

Also, I should mention that if you’re interested in venture capital careers, you may want to join my mailing list.  It is primarily focused on jobs and job hunting within the VC ecosystem.

(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

Having seen this come up a couple of times over the last couple of weeks, I felt it was worth blogging it.

Don’t give the product sales pitch when you’re pitching an early stage investor.

An investor presentation, although technically a sales presentation (you want the investor to buy equity in your company), should not be a product sales presentation.

Yes, we want to understand the product you have built or are building, but if it’s 100% about the product (or even 70% about the product), it’s hard to tell the story that will convince the VC that this is an exciting team and market opportunity, with the right product at the right time.  Getting bogged down in features and functions is going to take the investor’s eye off the vision and into the weeds.

There’s plenty of time to get into the weeds once you have the investor’s interest, but not in a first meeting.

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Here’s the first stab at the forward for the VC careers eBook.  I’m going to build the content around this, so please let me know if there are topics that you think I missed or that you want to make sure are included in the chapters I’ve outlined here.  Comments are very welcomed and appreciated.

Forward

It’s no surprise that it’s not easy to get a venture capital job when you consider some of the factors at play:

• There are very few VC jobs to begin with
• People tend to stay in a VC job for a long time
• Venture capital is not a growth industry; The number of people employed in the field does not typically increase annually (in fact, it may start decreasing going forward)
• VCs only hire through trusted referrals
• VCs are generally well compensated
• VCs work with entrepreneurs who are trying to change the world, or at least the industries in which they operate (which is no small feat, either!)
• Bottom line: VC is a great industry and the jobs are great, too

The combination of scarcity and quality of the jobs makes for a big labor supply/demand imbalance that works mightily against the venture capital job seeker.

• Acknowledgements and thank you’s (A shoutout to everyone that I can remember who helped me or met with me during my search)
• What’s the job of a junior VC? (A discussion of the day-to-day work of an analyst or associate)
• Onramps to venture capital (Discussion of the feeder jobs and industries to the venture capital industry)
• Do you need an MBA?
• What makes a good VC? (Discussion of skils that can help you be successful in this industry)
• Where are the jobs? (Finding/creating venture capital job opportunities)
• Where are the internships? (Finding/creating internship opportunities as an undergrad or grad student)
• Introductions and followups (The lifeblood of a VC job hunt)
• The Informational Interview (Once you get it, how to get the most out of it)
• Offer negotiations (If you’re fortunate enough to have offers to join multiple firms)
• Exit options (If you’re not a VC lifer, some thoughts on careers that might make sense post-VC)
• Final advice
• Online information sources (Sites and blogs that I found useful during my job hunt)

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• Venture Capital Careers Panel at Columbia Business School (johngannonblog.com)

(This post is one in a series of posts and third-party resources related to careers in venture capital.)

As a junior staffer at a VC firm, I think its important to understand where and how you can be helpful to portfolio companies.  The advice I received from my venture capital teachers Stuart Ellman and Will Porteous of RRE Ventures (blog) has stuck with me, and I’ve tried to operate using that advice since starting my VC career.

I’m paraphrasing here (it’s been about a year since the class where we discussed it) but in essence, the advice was to simply be helpful and humble.

Here are some examples of ways that a junior VC can add value:

• Business development: Introducing the company to potential customers and partners in their network.
• Fundraising: Introducing the company to other VCs during the fundraising process and helping the company develop their investor pitch materials.
• Recruiting:  Portfolio company is looking for a couple of engineers?  Get the job description, post it on some boards that might be relevant and forward it out to your LinkedIn network.  Maybe make some phone calls to folks in your personal network to see if anyone would be interested in the roles.
• Strategy: If you have an interest in corporate strategy and/or a background in strategy consulting, and the company is looking to explore new markets or the competitive landscape, see if you can lend some of your experience by helping crunch numbers, helping to put together the board presentation, etc.
• Listening and learning: Learn as much as you can about the company and the industry in which it operates.  Attend board meetings and listen!  VC is an apprenticeship business, so in many cases, the best approach is to sit down, shut up, and open your ears!

Company management, the VC partners who have invested in the company, and the founders will be adding the most value and steering the ship.  As a junior staffer at a VC firm, your job is to be ready to help out wherever they identify a need they’d like you to address OR to identify a need and then socialize it with your boss(es) at the firm to see if its something they’d like you to pursue.

You definitely don’t want to go off half-cocked, ginning up initiatives and projects without making sure that they are viewed as value-add by the partners and company management.

If there are any other junior VCs out there (I know some of you are lurking!), it would be great to hear some of your thoughts on what works and what doesn’t related to working with portfolio companies.

The most dynamic entrepreneurs don’t have a pitch – they tell you a story.

Everyone loves a good story, and I think that story can really help connect you with potential investors.

For example, I recently spoke to an entrepreneur who started a company based on his experiences from being hospitalized for a severe illness.  You could sense that he was intrinsically motivated by his experience and was leveraging that motivation to bring that day in, day out intensity that leading a startup requires.

Not all pitches are going to have elements of life-threatening illnesses or transformative experiences.

However, it can be just as compelling to share detailed anecdotes from your previous work or less intense parts of your life and use that to paint a picture about why you’re the right person to have started your company.  And why you are intrinsically motivated to succeed, no matter the odds.

So, the next time you meet an investor, think about telling them a story.

Recently I have been approached by people looking for an internship or job with our firm.  We’re not hiring or looking for interns right now but a few things jumped out at me about the methods that were used to reach me.

Most people who contacted me sent a blind email having found my email address on our firm website.  Also, almost everyone sent a generic cover letter that was not customized.

Now, I did read and reply to each of these inquiries, but my guess is that many VCs (and I’m speaking from experience when I was looking for a job in VC over the last year) would not answer this ‘cold call’ email.

So if I were looking for a VC job, what could I do to improve my chances of getting a meeting with the VC about potential internships or jobs?  Some thoughts…

• Use LinkedIn to find someone in your network who may know the VC you’d like to reach.
• If you have no other way to reach the VC except through a blind email, take time to customize your cover letter pitch to the firm (or the person at the firm) you’re targeting.
• Talk to me about some interesting companies in spaces our firm might be interested in and offer to connect me with them.
• Don’t ask for a job or an internship – ask for advice.  If you ask me if I am hiring and I’m not, I will probably say “we’re not hiring” versus if you ask me “can you talk to me about careers in VC, I want to learn” I’m more apt to engage in a dialog (and I don’t think I’m unique in that respect amongst VCs).

If you’ve had some success reaching VCs to discuss jobs or internships, what has worked for you?

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On Thursday, myself and a bunch of my fellow Columbia Business School young alums (Mark Davis of DFJ Gotham, Eric Wiesen of RRE, and Bronson Lingamfelter of Rose Tech Ventures) sat on a panel sharing our experiences and advice on getting a job in the venture industry.  The key takeaways were (in no particular order):

• getting a job in VC is really difficult
• most of us didn’t get our jobs until right around graduation (or soon after)
• the terrible job market will certainly affect the venture job market and make it even tougher than it already is…and this year may not be the year to gamble that you can get a venture job
• if you don’t like networking, VC isn’t the job for you
• if you need a highly structured work environment, VC isn’t the job for you
• finding internships in VC is all about proposing structured projects that don’t require much time commitment from the firm and its partners
• the Kauffman Fellowship program is a good avenue to explore in addition to other VC job search efforts

I really enjoyed the panel and also met some great students afterwards that day and the next day at the VC/PE conference.  Hopefully I’ll be able to participate again next year.

A venture capitalist I know once told me that he only wants to do competitive deals (deals in which there are more than one firm bidding to lead a round).

On the other hand, a guy I know who does seed investing who says he never competes for deals.  Just doesn’t happen and it doesn’t seem to bother him, either.

As a newcomer to this industry I’m trying to figure out my philosophy on this topic.  Are the best deals always competitive?

On the one hand, if you are the only firm bidding on a deal, the options for the startup are to accept your bid, try to negotiate (having little leverage), or walk.  This would seem to be a good thing for the VC since they should be able to get the best pricing and terms.  The flip side is that if you are the only firm bidding, the implication is that all the other VCs the company has spoken with don’t think the company is investment-worthy.

If there are multiple firms bidding on a deal, then the startup has the negotiating leverage.  The entrepreneur can play the firms off one another and strike a much better deal than they could have had if they just had one termsheet.  This will usually result in the winning firm paying a higher price (higher pre-money valuation and less degree of control) than they would have expected had the deal not been competitive.  This also implies that there is market demand for a company’s shares.  In an early stage investment market where < 1% of companies are able to obtain funding, maybe you could argue a deal that has multiple bidders is a good deal.

However, deals often become competitve once the first firm “jumps”.  In other words, there may be investors watching a company on the periphery and waiting to issue a termsheet once they see another firm issue a termsheet.

In this case, the deal certainly becomes competitive, but is it actually a good deal?

I don’t know where I net out on this topic yet as an investor, but I can certainly tell you one thing.  If you are an entrepreneur, you’ll end up with much better investment terms if you create a market for your shares.

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I’ve been wondering lately what is the most important skill or trait that a venture capitalist must have in order to be successful.

We spend our days hearing pitches, analyzing business models, crunching numbers, helping portfolio companies, networking, and talking to people in the industries in which we’re thinking of investing.

You can slice a market 16 ways from Sunday and project 5 years of revenues for a startup company but ultimately you are trying to find the best people building businesses around the best ideas.  And then you are doing everything you can to help these people and businesses succeed once you invest.

If that’s the case, what’s the most important skill or trait for a VC?

I’m going to go out on a limb here and suggest two:

- operating experience:  If you’ve been there and done that (that being started a company) before, you’re apt to have seen similar challenges to those that your portfolio companies are facing.  And consequently, you may be able to provide some relevant thoughts on how to overcome those challenges.

- personal network: If you believe venture capital is all about backing the best entrepreneurs with the best ideas then you need to make sure you know those entrepreneurs and are a part of their personal network.  This is a cliche in the VC business but its a good time to mention it: “An A team with a B idea is better than a B team with an A idea.”  I think that says it all (but I’m going to keep blogging anyways…)

Second, as a VC you often have to dive into new markets and sectors and get up to speed very quickly.  Certainly you can read blogs and websites to learn about new areas but in my opinion nothing beats talking to experts working in the sectors in which you’re interested.  The problem is that you need to find those people, and in some sectors its not easy to identify them and its even harder to get some of their time once you find them.

The other way personal network comes into play is when you’re able to help line up sales or partnership prospects for your portfolio companies.  If you do not have the relevant connectivity into certain sectors, your effectiveness is going to be limited.

What do you think?