One of my top 10 posts is one about how to get a job as a Venture Capitalist. It is worth a read, but much has changed since 2012.
What has changed?
- There are a ton of micro funds (<$25 Million) now. In fact, 652 funds are now listed across US, Europe and Asia. There were < 1000 funds in 2012, so there has been at least a 60% increase in # of venture funds
2. There are now over 100 Venture funds with Scout programs. What is a Scout program? Scouts are individuals who are empowered to invest small check sizes ($25K – $50K) in very early stage companies. They are funded by the venture fund. There are in fact over 50 Scout programs specifically aimed at college students.
3. There are so many angels and angel groups. In 2012 there were 30K worldwide. Now China alone has 25K active angels who have invested in the last year.
If you are interested in getting a job as a Venture investor, then there are 5 paths now compared to 2-3.
- Bring your own money (assuming you have money to invest on your own).
- Start an early stage micro fund focused on a niche.
- Be a VC Scout (there are a lot of resources on how this works).
- Start an angel group or fund with others
- Join a VC program as an analyst
If you look at the profile of venture capitalists across the world now, the Silicon Valley used to be where 65% of investors were in 2010.
Now in 2020, there are more funds outside the US, although the funded $ are still more in the US.
Lets look at each of these paths in detail:
- Bring your own money. Most investors who go this route have 3 paths – a) They have family money – inherited, b) They have worked at an early stage startup or struck it rich early (many crypto currency investors are now VCs), or c) They have worked at Google, Facebook, etc., and decided after X years to invest in early stage startups.
- Start a Micro fund. Most investors who go this route, have 3 paths as well. a) they were at a large VC fund and decided to strike it on their own, b) they were keen to start a fund and have friends and family who are willing to invest, or c) they started small, had 1-2 great investments early and grew from there.
- Be a VC Scout. Investors who were scouts and then became a VC are few, but most are interested in learning and sharing more than making money.
- Angel groups: Investors who started an angel group are typically helping their friends or alumni raise money and then they start to get some deal flow. Others get their colleagues from work to invest in a startup as a first step.
- The VC Analyst program. These tend to be the most sought after, but far and few between in terms of opportunities. Many have terrific backgrounds from the top schools or had some success at a VC funded startup.