There are countless posts on what one should consider when considering a career in VC. The reality today is that, as technology proliferates into all sectors and geographies, venture itself has grown in lockstep with the size of the opportunity. As the economy is now driven by technology, many folks are interested in venture — which I will admit, if you love it, is an incredible role with a fantastic business model (if things work out).
I recently gave a talk to a bunch of graduate and club students at a university which has produced a high number of VCs. The school name doesn’t really matter here, because this advice is actually relevant to anyone who covets this path. Before I begin here, a few important caveats: 1/ The advice below is just one man’s POV; 2/ the advice is worth what you paid for it; and 3/ While I am no expert on this topic and many others have written on this, this is intended to be very brief and pose questions to the reader to help him/her evaluate their own desire to go down the VC path. Now, with those disclaimers out of the way, here are the points I made to the students:
1/ Career Certainty Matters – It’s important to be certain that VC is the desired path, especially of grad students or folks approaching 30 years old. Why? Well, spending 3-4 years in VC and not being totally committed to it is actually…a fantastic waste of time. The opportunity cost of those 3-4 years is very large for talented, driven folks.
2/ So, How Does One Get Certainty? Network your way to observe what a real board meeting is like of a Series B or C-level company. Go study what folks do on boards, how they prepare (or don’t prepare), what the politics are like, what the follow-ups are, etc. The governance function of institutional VC is a consistent, never-ending part of the job (and a huge reason I wanted to remain at seed versus moving up the stack).
2a/ If You Love Boards, Then… Go dive into an institutional fund that values their GPs joining the board. There’s a whole other matter of whether you have the qualifications to get into that room in a competitive environment, but liking board activity is a good sign to act on.
2b/ If You Don’t Love Boards, But Still Are Bullish, Then… Considering going into the early-stage VC ecosystem, the pre-seed and seed game. This isn’t for everyone. It is not very lucrative unless you start a fund that actually works. You also have many trends working against you. Go talk to seed VCs; go model out the fund economics, their ownership levels, etc. Learn the business of seed, because its venture model is very different from the institutional board-sitting VCs.
There’s a lot more I’m not covering here. It’s a complex decision with lots of mystique around it. What I’m trying to do is simplify the decision tree a bit — a warning for folks who are interested from afar to examine things more closely and protect their own time and attention. I felt motivated to write this because I’ve seen scores of folks get enamored with VC from afar without peering into the model. The risk is that going into the industry without asking these few questions can cost a young person their most valuable asset: time.