In the last month, I have had the good fortune to speak to numerous graduate students regarding finding a job in venture capital. While much has been said about the process already, it appears the demand for guidance is undiminished. This post summarizes some of the advice I am giving people.
First, asking for how to get into VC is akin to asking how to get into medicine. Adam Smith famously stated that specialization is a function of market size. The VC market, while not as large as the health care industry, enjoys broad specialization and focus. As with medicine where one can be in internal medicine, orthopedics, pediatrics, etc, there are many flavors of funds with each flavor requiring and looking for different skill sets. VC firms differ by location, stage of investment, and industry focus. Later stage firms typically value financial analysis, deal structuring, and deal execution skills. Early stage firms typically value technology and market expertise combined with operating experience.
Second, the world is intensely competitive. To succeed you will need not only good fortune, but also a deep passion for the domain in which you operate. Accordingly, pick the stage, focus, and investment philosophy that maps to your skills and interests. There are simply too many smart people in the world who will run you over if you enter their market without the commensurate passion and commitment that comes from doing something you truly love.
Finally, if want to get into the early stage space, I believe the best path is the Zen approach. Ie. the harder you try the worse you will do and the more frustrated you will become. Focus not on getting into a VC firm right after graduate school, but instead on a market, company, and operating role that will provide the expertise, sets of relationships, and experiences that will prove valuable to a prospective VC firm employer. This is generally not a one year commitment but rather a multi-year investment that pays dividends in making you a more suitable candidate for hire and also provides the option value of discovering a joy for the operating side that may keep you in the executive ranks.