The venture capital industry has seen record amounts of capital in recent years, with many firms raising their biggest funds ever and new funds popping up every week. Professionalization in this once small industry has led to hiring at historic levels. Many of my clients are looking outside of the existing world of venture for the human capital to fuel that growth, seeking to build teams with more diverse experiences.
Switching careers is not easy, and VC is often not as glamorous or as lucrative as it can be perceived to be, but you are thinking of getting into the industry; maybe you made a seed investment once, maybe you started a company and loved your VC board member and thought their job looked interesting, maybe you’ve been an advisor to a friend’s startup and it sparked your interest.
What do VCs look for, and what’s it like to interview for these roles? I’ve worked on many senior investor searches for VC firms and I’ll share as much as I can.
What kinds of backgrounds do VCs like?
VCs generally see value in networking. So if you come from a company a VC might know, they’ll probably have a coffee with you even if they don’t have any real interest in hiring you, because that coffee could have several “successful” outcomes —you may be right for a role in their portfolio, you may find a startup of interest in the future, you might even be a good hire for their investment team.
What’s the sort of operating background that a VC firm is actually interested in hiring? In my experience, two types of backgrounds tend to fare well with VCs.
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First is the Product executive who has seen a company grow from early stage to big (scale relevance varies by the VC firm, though through to exit will always be relevant).
VCs historically appreciate Product experience, because the entrepreneurs they invest in are often making product direction decisions that are business-critical at the stages in which VCs invest, and product-market fit is a critical component of the diligence process for VCs. Having an investor who understands the products in their competitive landscape is a tremendous advantage both to the portfolio company and the VC firm.
Another background that resonates well with VCs is the former startup founder. If you’ve grown a company from small to large as CEO or founding employee, and you achieved a good exit of some sort at just about any stage, entrepreneurs will value your advice.
VCs view this as an indicator that you’ll be able to attract strong deals, and then be helpful on a Board once you lead them. There’s another reason former CEOs and Product executives are attractive to VC firms; many of the most successful VCs have those backgrounds themselves!
Other experiences VC find useful
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Regardless of background, there are a few things that VCs tend to find appealing when they are evaluating an operator as a potential new hire. As you’d probably guess, they all have to do with exposure to relevant ecosystems of entrepreneurs.
Past experience as an angel investor in or advisor to startups is great, particularly when those companies are successful. Even if you are writing very small checks or no checks into those companies, your affiliation with them shows that you have some acumen for building relationships with entrepreneurs, and investment judgment if those companies are performing well.
Even at a small check size, a positive track record is an impressive qualification to bring to the table. Involvement in networks that generate or foster entrepreneurship is also appealing; Y Combinator or another startup incubator program, StartX or another university group with similar ties to entrepreneurship, for example. VCs also view technical experience either in the form of a CS degree or time spent in engineering as valuable, but it’s usually secondary to the above.
Don’t interview like an operator, and sound committed
I hear all the time from my clients that the person they just met would be awesome in a portfolio company, but that my client doesn’t know how to evaluate them as an investor. You really want to avoid being viewed as “just” a strong operator.
Investors are used to interviewing operators for portfolio company roles; they do it as a regular part of their job, all the time. Your goal in these interviews is to help them see you as an investor rather than a portfolio company executive (or both, just not only the latter!).
How do you sound more like an investor? Come with an informed perspective – talk about sectors and themes of interest, about changing markets in areas you know well. Speak their language. If you have exposure to startups via advising or investing, talk about the factors that VCs look at in their own investment decisions to show why you were interested in them — the teams, the markets they are attacking, the business models.
Most importantly, shift the amount of time you spend talking about your individual contributions to your past companies way down, and shift up the amount of time you spend talking about what made the company successful from a market perspective and versus its competitors, even if you weren’t involved day-to-day in that level of strategy.
Another mistake operators often make is sounding unsure about investing. Which is, between you and me, a totally understandable sentiment — it’s a big, career-shifting decision. How could you know you’ll love doing this job when you’ve never done it before?
But in an interview setting, you want the other party to come away sure of your conviction. Saying you are very interested in making VC your next career move doesn’t obligate you to take the job, but not saying it will often ensure that you won’t have the chance.
This is a career with serious competition for deals among lifelong investors, and investors recoil at the idea of making a big personal, financial, and time investment in a new hire only to have them leave for an operating role after a short while.
Other things to expect as you interview with VCs
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If you are interviewing for operating roles in companies in parallel to interviewing with VC firms, you will get multiple offers (probably quite good ones) in the former category before you’ve made it far in the latter. It is exceedingly common in the VC Partner searches I run to find out that an excellent candidate has multiple strong offers in Product roles from big tech companies and hot startups, for example, before they’ve made it halfway through a VC interview process.
Even small firms are very deliberate in how they hire, as the fit and economics require a long term commitment from both sides. It will take at least 2-3 months of getting to know a firm before there’s mutual comfort, and often as much as 6-10 months of meetings with various members of the team in a range of settings (interviews, meals, working sessions, etc). Plan ahead.
It’s also worth keeping in mind that, on the scale you are probably used to thinking about companies, VC firms are small startups. Even large VC firms employ fewer people than most Series A companies.
They aren’t hyper-growth companies hiring at a torrid pace either, and the more senior the role the more risk-averse they are, elongating their diligence process on you. Taken together, if you are serious about getting into VC, you’ll likely have to focus on it for quite some time and forgo multiple other job offers in the corporate world, which can test the mettle of even a superbly qualified candidate.