The single most important thing in VC is making an investment in the best founders and companies—so VC firms look for individuals who can form a thesis, validate a product, identify opportunities, and substantiate their recommendation.
Particularly for those with a strategy or operations background, it’s important to know how to narrow in on your current experience and learn how to leverage it into an advantage in your future career as an investor. You don’t need direct investing experience to break into VC, but no matter what background you come from - it does require someone to take a bet on your potential.
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Table of ContentsWhat You Should Be Doing In Your Current Job
See An Idea Through Execution
Understand The Product’s Go-to-Market Strategy
Understand the Underlying Economics
Get a Pulse on Company Team & Culture
Broaden Your Network
Leveraging These Skills to Land a Job in VC
Know Your Strengths And Weaknesses
Get Granular Without Sacrificing The Big Picture
Be An Expert In Two To Three Sectors
Show You Can Think From Various Angles
What You Should Be Doing In Your Current JobPrior to VC, I worked in investment banking at Goldman Sachs and finance & strategy at DoorDash. Banking taught me what it takes for an investor to believe in a company, but it didn’t teach me what it takes to operate and scale a company. Before I made the pivot to VC, here are a few things I focused on learning at a company to deepen my perspectives.
See An Idea Through ExecutionEvery startup knows the pain point they’re solving—but the idea often falls apart in speed and execution. At your current company, pay attention to what pieces need to fall into place for a product to go to market. This will help you learn what to pay attention to when you’re on the other side of things as an investor looking to determine if a company will be successful.
Understand The Product’s Go-to-Market StrategyCompany decks usually quote the total addressable market (“TAM”). But how much of this is actually a serviceable addressable market (“SAM”)? Does the founder of the company know their ideal customer profile (“ICP”)? Finding a product-market fit will take a few iterations and that’s okay (after all, Netflix started as a DVD rental service). However, multiple failures will drain company resources and morale. Pay close attention to how your company does and does not successfully approach product iteration.
Understand the Underlying EconomicsKnowing the key drivers of your business model and what levers you need to drive growth is crucial. If you haven’t spent time on financials at your current role, there are plenty of resources that outline key terms to understand for certain industries.
We won’t go into the details of the metrics here, but as you prepare, know the differences between near-term and long-term unit economics. Pay attention to what costs are temporary and can be improved over time (e.g. CAC, S&M) versus what costs are fixed (e.g. warehousing, driver costs), which can be unsustainable if not managed well against revenue growth.
Get a Pulse on Company Team & CultureVC is both a founder and company bet, and the company’s first 20 hires will set the bar for the rest of the team. Working inside a startup helps you understand 1) what founder characteristics and leadership styles motivate a team and 2) what high and low performance teams feel like. Having a good pulse on both will help you answer, “is this the right team that can lead the company through the next 5-10 years?”
Broaden Your NetworkThis may seem obvious, but a strong and wide network is crucial in being successful in VC. Coming from a traditional finance background, I was never exposed to perspectives outside of my industry. At DoorDash, my team worked with a variety of stakeholders—from engineering and product to marketing and data science. Learning how everyone’s piece fits into the puzzle and what challenges they face will help you immensely down the line. The people you meet will also be invaluable resources as you think through product and execution.
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Leveraging These Skills to Land a Job in VCOnce you’ve really dissected how your company works, you can use your insights to then pivot to a career in VC. As mentioned earlier, breaking into VC requires someone to take a bet on your potential. So you’ll need to demonstrate how your previous experience will be a unique asset in your future venture role.
Know Your Strengths And WeaknessesAre you a numbers-driven or product driven person? There is no steadfast rule, but the numbers-type usually thrive in growth stage investing, where there is more data to dig into. Product-types typically thrive in earlier stage investing where companies are still in the building stage. Play to your strengths and communicate to the team where and when you can deliver the most value.
Get Granular Without Sacrificing The Big PictureIf you’ve worked at a company, you are probably closer to execution challenges than those who do not have this experience. This is a critical skill in VC when doing diligence on companies, but recognizing the opportunities ahead is just as important. Venture is, after all, a long game.
When interviewing, you’ll often have to complete case studies on 1 or 2 companies. Use this as an opportunity to not only demonstrate your operations muscle, but also show that you are able to see the bigger picture 5 to 10 years down the line.
Be An Expert In Two To Three SectorsHaving had industry experience, you likely know more about that given industry than many people who have only worked in VC and investing—and that makes you an interesting candidate. Use this to your advantage—discuss the topics you know best, articulate where the market is heading, point out key players, and highlight opportunities for new entrants.
Show You Can Think From Various AnglesYou’ve probably worked with various stakeholders (like EPD, S&M teams) at this point in your career. Most bankers, consultants, and other candidates without operations experience can’t say the same, so you have a leg up in knowing what each team cares about and what needs to happen for the company to succeed.
VC interviews are usually discussions rather than the traditional Q&A format. Use this as an opportunity to showcase your ability to think through problems from various lenses and to articulate your knowledge clearly.
There is no singular path to VC. It comes down to how you can leverage your current experience and amplify your strengths. VC’s are looking for those who can bring a unique mindset to the table, and that could be you.