Assumption: In perspective of Investment in Tech sector (and start up — somewhat).
Source : conversation with a few MBA folks from the industry. It will only give you a general idea.
You will get too many details. Blah. Blah. Blah. So Ignore the grammar rules. Sorry!
All that glitters are not gold, but only 1% of the stuff is gold — Welcome to Venture Capital.
What does the Venture Capitalist do?
In a nut shell : differentiating the start up that will be successful before they become successful — doing a smart investment on them.
They do not really have to be in technology sector. They should have a smart business idea and have the potential to survive/ thrive. In early to mid stage, they will be evaluated based on the merit, meaning and promise in the market — the vc team will evaluate on buying some stock option of the start and help the start up to grow till the point it gets acquired by any big giants or it goes public — VCs make a return!
How long will the help portfolio required?
Well, there is not any straight answer. It depends on how mature the company is. If the start up you are investing is a more mature later stage start up (pre- IPO phase), that company might not be in the portfolio for long. May be a couple of years. If it is an acquisition, it is hard to know; you never know how long they will be — as it takes for most good start ups two years to get any attraction from the market — but if see the case of few recent successful start ups (e.g. Uber), they took almost nine years to go public from private. Each investor will have its own characters depending on the time of its investment — not necessarily better than the other — so, it’s their map of to do things.
The more mature the start up is, the less VCs work with them — you tend to get the Board Meetings update and stuff like these if everything is in well motion. The earlier start ups need more guidance in traction and many number of different things — it varies.
Entry Point for an MBA:
It is hard to get into to be honest, but there are lots of different way to get into this industry, which is the good part. If you have done VC before, obviously you will be preferred. Those who also have back ground in IB, management consulting (MC)— tech clients, lots of expertise in one domain of operation will be given preference. You also have to see the nature and partners of different firms, if you have business development experience or product management in a successful start up, it can put a lot of relevance to the partners of that VC — but one may have a tough time in finding a good VC role.
MBA schools in help :
Some firms do post online. Going through the recruiter can be a hit and miss . Networking can help you a lot with the start ups and VCs — basically you are trying to invest in them or win them over through money — reach out to firms and share your thoughts with the VCs — people will respond to your response, give them a reason to respond. Bounce some ideas on them. MBAs will help to connect will alumni — (pretend) you have some value to offer. Most MBAs will come at senior associate level. (general hierarchy : associate — senior associate — principal — partner)
Recruiting Process:
It is kind of amorphous. You won’t find much of internship. It is hard for firms to give someone meaningful intern work and carve out productive. It will be barely like single setting recruiting influenced by networking — pass on thoughts whenever you see an opportunity — by the time the VCs need someone, they will have a reason to look out to you — so be thoughtful and meaningful with your communications. MBA will not hurt unless you are super totally into operations when you actually hate it. Also the stigma about the start ups that you do not need an MBA does not make sense. At times, start ups do not understand what to do with a recent graduate MBA with vast skill set. It is more of misunderstanding from start up side not from VCs.
What they are looking for in hires :
Job descriptions will probably ask for experience in Investment Banking, Management Consulting , Product Management. You may need to see what trend is flowing in a certain space — e.g. tech, health care — and then you find the low bell ends and see how things are going — any new player in terms of investment in the market — that is the most relevant. It is not rocket science but not everyone gets to close deals.Best and Worst part in the job:
It is very intellectually interesting. You get to watch different industries. You get an idea about the business. It is not about who is doing what but also figuring out the believability of stories of different start ups and investing on them and helping them to become a success story — it can go a long way and it is rewarding. Entrepreneurs are pouring their blood and sweats into their dream. You need to have an optimism in them. Entrepreneurship is a cliche and they get thrown out a lot and success rate is less than one percent. So you meet up these interesting folks who are in their ways to make an impact and for some reason, though you do want to help them, you can’t — this can be frustrating if you meet a bunch of folks only these type. As a VC, you have to make a decision and dump the litter and save for the right fit who can be successful in future. And that will be the right decision as they might not fit in your mandate of the firm.
Also, the tremendously successful start ups generally pick on investors as only a few investors can be a fit in a certain series of funding. So, as an investor, you fight your way in.
VC opportunities for Internationals MBAs: Can they break in?
It goes back to candidate value. That will trump anything.But, in a realistic sense, it is hard because of the network. Internationals have competitive dis-advantage.
If there is a cross border investment happens, then international will get the benefit of their existing network in their home country. So, It depends on the kind of value any candidate brings and how he will put his strengths onto the job.
What are the resources to build the network and learn?
Follow deals, term -sheets, and how the industry is going.
Website — http://firstround.com/, https://a16z.com/, https://avc.com/(some are about start up and some are about VCs — they are mostly one part of the another.)
It is an unstructured process. Sometimes, people sometimes end up in VC though they do not want to. Geographic reality is that New York, Boston, and San Fransisco will have work. Stanford GSB (3% of the class got into VC — that is the highest anywhere in the world.)folks have lots of advantage over anyone. It is the reality that certain schools have build in advantage.
