The One Ingredient Required To Get Into Venture Capital

Earlier this week, a super-smart recent college grad pinged me to talk about a potential career in venture. I took the meeting. It was funny to me, in a way, that I myself had those meetings 7-8 years ago. I can’t remember all the advice I got back then. Lots of folks said to work at a larger company, or a company past the Series B stage. Lots of folks wanted me to interview, too, but while those were good conversations, they certainly didn’t proceed in the linear fashion I had hoped for.

Now, in 2018, with the tables turned, what would I tell this eager 23-year old whipsmart whiz?

Here’s what I told him, as he was mentioning he wanted to get operational experience *in order to* position himself to get into venture:

1/ I fundamentally disagree with the tactic of doing X in order to one day be in venture. It is flawed for many reasons. One, the relevance of X to venture may change; two, it seems like a fantastic misplacement of precious time, energy, and attention; and three, it’s hard to carve out a straight-line path into venture.

OK, but then, what should one do?

2/ I think “venture” as a category is expanding horizontally and vertically, which means there are statistically more opportunities both in the Bay Area and outside than ever before, and definitely more than the 7-8 years ago I was asking this same question. So, getting in may be easier because there are more entry points.

But, then, the next thought is — how to put oneself in a position to be competitive?

3/ I believe while there are 101 pathways into venture, to be effective and competitive one needs to have acquired sufficient “context” about the ecosystem they’re investing into before they saddle up with a venture firm.

Ok, so then, how would you define “context” in this context?

4/ My belief is that in the VC game, having “context” means possessing the following: You have a network; you hold a point of view on a few topics that matter to you; that other people seek you out for help and advice; you have some understanding as to how the ecosystem’s participants — the founders, the early employees, the “joiners,” the operators, the angels, the investors, and the press — interact in the game. I believe if you show up in VC without these points of context, you won’t be as effective or be able to compete.

Ok, so then, how does one go out and obtain this “context” you speak of?

5/ This is the best part. Context is everywhere around us. It’s free. In many cases, folks will pay YOU to obtain it, especially in the Bay Area. You can obtain context by being a journalist or reporter; by working at a technology company; by working for the corporate development or similar arm of an incumbent company. Context is a two-way street, though. You don’t just “get” context delivered to you. You have to go and get it.

While there are lots of places to get this context as a newbie, I do feel strongly that venture isn’t one of those places which satisfies this condition. Sure, you can get lucky and get a gig and put it on the resume, but short of being a lucky statistic, coming into the field with just some context is very helpful. When I tell folks that I started my own funds because no real fund would hire me, they’re surprised. It’s true. It’s what I told this kid earlier this week. But, now knowing what I know, not only do I understand why they all said “no,” I’m actually even more fortunate it worked out that way — it enabled me to find a way to gather enough context to be competitive.

Note that not all context is created equal. If you have the right level of context, folks in venture will notice and you will be hired. The right level of context in my opinion, as a baseline, is to articulate and defend various points of view, to have been well-read on the industry and be able to make non-obvious connections between disparate bits of information, and to have shown evidence of staking out a position and sticking with it. However you seek to obtain your context — and there are no rules around that pursuit — I would advise to have some in your back pocket before playing this part of the game.