Venture Capital has emerged thanks to the increased popularity of shows like Shark Tank and Silicon Valley. More and more college and business school students target jobs not in finance or consulting but venture capital (VC). I've now been working in the venture space for approximately two years and I get emails and tweets asking how I broke into an industry that has approximately 3,000 roles nationally.
I utilized a number of sources online where individuals gave their personal accounts on how they hustled into a role. One great repository of those articles is on John Gannon's website called "Yet Another (ex-) VC Blog." I used this website religiously to read up on trends, find job postings, and get daily encouragement from accounts of other individuals who were able to make the unlikely career switch into a venture capital associate or principal role.
However, even after reading the hundreds of articles on how to break into the industry, I often found myself still in the dark on how to prepare for a VC interview. Through trial and error I gained a few helpful tips that helped me progress through the opaque interview process and stand out as a candidate that had a clear vision of how he could assist in the investing team's efforts. I was able to accomplish this by coming over-prepared with my own customized investment thesis, a clear understanding of the VC firm's track record, and investment suggestions.
1. Create an Investment Thesis Deck that is relevant to the VC firm's Investment Strategy.
In my first venture capital interview, I did not come prepared with an investment thesis to show my point of view on respective technology sectors. The conversation was therefore reliant on the interviewer asking me questions to determine if I had a fairly good grasp on the sectors that they covered and on what the job entailed. Needless to say, I did not display either well because I did not create materials in which I could drive the conversation to show what I knew and what value I could add.
From then on, I created a standard investment thesis template (you can find my template outline here), that featured the investment focus of the firm and my point of view regarding the macroeconomic trends that would influence which sectors would be winners in the next 7-10 years.
I included data from articles and market research reports to support the assertions I had on the respective market. I quickly noticed when I had the investment thesis materials in front of me and the interviewer, I felt more comfortable in displaying my knowledge and point of view.
2. Review the VC firm's Investment Track Record and Perspective.
One helpful tip to creating the most useful and relevant investment thesis deck is to first do your research on the VC firm's track record and current investment strategy. You can find these concepts in a number of areas including, the fund's website, blog, twitter profiles, and press releases.
This is really helpful so now you won't pitch a company that the VC fund has already invested in our a direct competitor of one of their portfolio companies. This also ensures that you share your point of view to the relevant sectors and stage that the VC firm focuses on. It's really hard for VC firm that focuses on fintech enterprise startups to assess your potential value to the team if you pitch them a growth consumer social media company.
Lastly, don't feel obligated to agree with the investment thesis of the VC firm. Managing Partners have teams that run lean so they are seeking smart individuals that can bring their own perspective and deal flow to the weekly pipeline meetings. If you feel that there is an aspect of their thesis that is wrong, state it and back it up with market data and examples.
3. Identify two or three Startups that the VC firm should Invest In.
This last suggestion will really show your potential employer that you have the expertise and work ethic to add value to the investment team. It is important that you track startups within the VC firm's industry verticals and stage (maybe even a little earlier than their target stage) that would be a good fit for the portfolio. You should identify these startups through industry focused events, accelerator demo days, press releases or your own network.
Once I identified startups that would be a great fit for my interview, I typically found a warm lead to the founder or an employee to learn more about the metrics of the company and offer help in business development other business related topics.
This made my startup suggestions more actionable because I not only put a new company on their radar but also could make a personal introduction to the startup. That extra step shifted my potential value to a VC from theoretical to tactical. I was now offering to execute on the actual role a junior VC.
Implementing these three tips will help you counter the natural vagueness of the VC interview and enable you to drive the conversation to display the value you can offer starting day one.