I am an accidental VC.
All my undergrad and business school years, I wanted to be a consultant. In my second year and fourth year of college, I worked at startups. Somewhere, the idea of being in the ecosystem was conceived.
In my private equity summer internship at business school, I got exposed to investing. I really liked the idea of backing companies, but not ones that were too big.
The naive logic of startups + investing being interesting was incepted.
Dropping potential consulting offers, I ended up at an early stage venture firm. Most of my friends dissuaded me from joining. I had no idea of what venture capital was.
Just the naive thought of investing in startups was enough for me to take a leap of faith.
I initially thought that venture investing was all finance. Very early on, I realized we were just financiers in name. Money was secondary. Venture was very much a people-first job.
Venture investing was more sales and marketing, and less finance.
As a Junior VC, my role involved three major things. Meeting new companies, or “sourcing” deal flow. Evaluating investment opportunities, or “diligence”. Helping companies we had invested in, or “portfolio management”.
Surprisingly enough, you end up doing these 3 things for all your VC career.
From analyst to managing partner, you will do all these 3 primarily. As you get more senior, another responsibility gets added, which is raising a fund. The mechanics of how that works is something we had written about.
It was clear that for being a great VC, you need to master all 3.
Sourcing involved building a deep network and immense hustle to meet the founders you wanted to partner with. Diligence involved asking the right questions and building an independent viewpoint on partnering with founding teams. Portfolio management involved helping your founders in whatever way was possible.
The skills I needed to master would be centered around these.
As I spent more time in the ecosystem, people began to ask me what one needed to break into VC. At first, I didn’t have a clear answer. But as I deliberated more, the answer would converge to the skills I was trying to build.
If you wanted to break into VC, you needed to show potential in these skills.
Bring a fantastic startup to the table. Demonstrate that you have an independent viewpoint on a particular company. Show that you helped founder friends with their startup journeys.
This became my advice to aspiring VCs, some of whom ended up at VC firms.
Why some, not all, ended up at VC firms had to do with the industry. There are extremely limited roles available. Across the hierarchy of analysts, associates, vice presidents, principals and partners, challenges existed in breaking in.
Most analyst programs were two years only. Very few would get promoted to associates. You could rarely join as a VP. Lateral hires as principals would be very senior. Making partner depended a lot on fund performance and available partnership positions.
In summary, it was extremely hard.
What changed as I became more senior was my ability to make better decisions. I would be more nuanced, experienced, believable. As I got promoted across levels, I got more power to make decisions.
Those decisions involved making investments.
Each individual in the firm has increasing levels of decision making as they get more senior. As I saw this evolve, VCs appeared to be less like companies. They were more like groups of individuals, each with a strong voice and a different opinion.
It was personality driven, and therefore a role of an “individual contributor”.
Even large investment teams are generally 20-25 people strong. Every deal usually has one senior member (VP+), supported by another professional. Due to that, it felt strangely lonely at times.
I very rarely worked with peers. It was first more senior people, and later more junior people.
But the loneliness was more than compensated by the massive number of entrepreneurs I met. As I entered my 4th year, I was meeting 30-40 teams a month.
It was clear that venture could be exhausting if you don’t like hanging out with people too much.
But I found the role exciting. Meeting new people, intellectual rigour and genuinely helping the underdog win was an amazing job description.
Due to these reasons, it also is an industry that is hard to automate.
Venture involves backing teams attempting to do something that’s never been done before. Due to that, there is no data. No machine can predict which company is investible.
It will always require the creativity, passion and persistence of a human.
I just completed 5 years in the ecosystem, and it is the only thing I have ever done. Venture is a long game. Results i.e. massive companies take years, sometimes decades to happen. It is not for the impatient.
I have the patience to do this for another 5, 10, maybe even 20 years.
The founders are the heroes, VCs the cheerleaders in the background. It is a hard, but fulfilling job. You are privileged to be able to see the birth of a giant organization right before you. If you’re lucky enough to seed a Jeff Bezos, he will cherish your relationship like family.
I started as an accidental VC, but I stayed because I loved it.