Having been in Venture as an associate for >7 months I get a lot of the same questions, week over week. The "can I buy you coffee because I want to be a VC" is definitely one of the most common occurrences that come to my inbox frequently, mostly from students from top-tier MBA programs, bankers, and big-4 consultants.
This post is about how I got my job at FundersClub and insights for the ones that are interested in becoming Venture Investors themselves. I absolutely love my job and have found my calling in life. This is what I plan on doing for the foreseeable future.
If you follow FundersClub or my blog, you know that we were sourcing for a new Venture Associate since December. After rejecting 700 candidates, we finally found the perfect applicant that accepted the offer and will join FC in a few weeks. Thank you, if you applied!
First, you sell money, then you sell jobs into the companies you fund. The best companies will always have competitive rounds and we play to win.
If you don't have experience in sales, BD, or recruiting (which is pure sales), an engineering background can also be extremely resourceful if you want to break into VC, especially if you have transitioned from a software engineer into product management at a large public tech companies AND startups.
<blockquote class="twitter-tweet"><p lang="pt" dir="ltr"><a href="https://twitter.com/willgadea?ref_src=twsrc%5Etfw">@willgadea</a> VC is a sales profession.</p>— Bill Gurley (@bgurley) <a href="https://twitter.com/bgurley/status/690662880174149633?ref_src=twsrc%5Etfw">January 22, 2016</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
“The ideal venture capitalist has an engineering or a sales background. Engineering is useful because it helps you understand the technology that you’re investing in — for example, is the entrepreneur trying to defy the laws of physics? Sales is useful because every entrepreneur has to introduce a product and sell it. For the third time in this blog, let me say, “Sales fixes everything.”
— Guy Kawasaki
During our recruiting process, we looked for pure "Gary Vaynerchuk type of hustle", rather than management consultants or bankers. Either you were a former founder or you've built something that adds more value than what you can capture. A newsletter, a Slack group, or a Python crawler for sourcing deals are great examples.
I did not know anyone at FundersClub nor I heard of it before applying for this job. A recruiter got in touch with me over LinkedIn, for a Community Manager job at the company. Given my previous experience at SendGrid running their startup program on the West Coast and Latin America and decided to hear more and take her phone call.
As a former founder, I always enjoyed selling to early-stage founders. During my tenure at SendGrid, I was bringing in 5x more startups to the program than the second-best performer on my team.
Once I met Alex Mittal for the first time, he thought I would be a better fit for the Venture side of the house. I'm mightily grateful for the fact that he gave me chance in the venture.
I quickly learned the uniqueness of this opportunity. After doing my research I was impressed with the investor list that backed FundersClub and the quality of our portfolio as seed and Series A investors. For a team that has been in the business for less than 4 years, they exhibit astounding results at a first glance.
Based on their investments being YC-heavy and the fact that the founders went through YC I assumed that the culture of FunderClub was going to be similar to the highest-performing YC companies. I've had experience going through an unsuccessful interview process for a BD job at Stripe and had learned my weaknesses with these types of founders/culture.
I had to aggressively put my application at the top of all other candidates and prove that I could do the job with or without FundersClub. Show absolute inevitability; that I had a similar level of access into the ecosystem in Silicon Valley.
You only have one chance to make a first impression and VC is a reputation-driven business.
Here is the email I sent Alex Mittal before my interview on July 9, 2015:
Alex,
Prior to the recruiter reach out I haven’t heard of you guys. That said, after doing my research I am really looking forward to chatting about the position and your vision for it.
Before we jump on the phone I wanted to give you context on what I’ve learned and researched about you guys in the past 1.5 weeks.
FC’s reputation and achievements to this date are impressive and value-wise. I think we’ll make a great fit (humble, love, no fear).
Since we’ll only have 30 minutes I wanted to give you context on the diligence I did on your FundersClub before jumping on the phone.
I called every CEO that I had a personal relationship with and had raised money from FC: A[Redacted], F[Redacted], M[Redacted], and C[Redacted].
All of them were extremely happy with how customer-centric, responsive, and honest you guys were. They love Boris + Jerrod. The hoodies + champagne are also something people take a ton of notice of. When asked (didn’t ask all of them), most CEOs were comfortable with increasing FC’s % on a future follow-on round. That’s amazing.
I called people that you guys said NO to or that a deal didn’t work out at the time: C[REDACTED], V[REDACTED], and L[REDACTED]. They all hope to work with FC one day if there is a fit or a possibility on a later round. Seeing that founders aspire to work with FC was great.
I had coffee with Andrew Jaeger. Due to a mutual connection, I got a recommendation-intro to him and was able to see the absolute determination and resilience in him when it comes to the mission that you guys are on. Seeing engineers that deeply care about the cause of making VC better and customer-centric is a big positive. Hopefully, he also had a great time.
Bonus- I got 2 accredited international investors to join the platform: A. [REDACTED] and M.[REDACTED]. Both have been interested in learning more about FC partnerships.
Talk to you later today,
Best,
Pedro
The beautiful part of getting a job in VC is that it's uber-competitive to get in, but there is nothing that disbars one from doing parts of the day-to-day of a VC, even if you don't have a fund or a job in the field.
If you want a job in Venture, you should be regularly sending deals to MDs at the funds you aspire to work with. Taylor deal-flow their way.
I was disappointed with HBS and GSB students that would approach me and wanted to grab coffee immediately to chat about Venture. Nobody has time for that.
I would always reply with something like:
Thank you for your email. I can't jump on the phone until you source 2 deals for me and explain the rationale behind those. Hope you can understand.
Best,
— /Pedro
The responses I got were, for the most part, horrific and lazy. People sending random links from TechCrunch, sending us deals that were at the Series B level, while it's pretty clear that we focus on Seed and A rounds. Moreover, they would not get in touch with founders, make phone calls, email people, and so on. Remember, VC is a sales job and you have to qualify your leads.
i.e — "Is this company raising? How much? How is traction? What is the TAM? Any red-flags on your interactions with the founders?"
Additionally, build a relationship with the CEOs or Sr. Managers at their portfolio companies. Become "the-guy or gal" that people can count on and expect nothing in return. Be resourceful. Add more value than what you can capture. Give first.
Steve Blank has helpful post on how to get meetings with people busier than you. You should follow his recommendation.
I have a personal thesis on investing in foreign founders and even before this job was lined up, knowing that I wanted to get into Venture I built Silicon Valley World.
Having been a founder twice combined with the access I had via SendGrid in programs such as 500 Startups and Techstars, also proved to be helpful. But you don't have to be in the startup ecosystem to break in, all it takes is a first step, resilience, and grit.
Aside from my blog + Silicon Valley world, I posted this on my Twitter and Facebook:
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In 3 days I had over 70 new startups that came to me, wanting to chat and hear more about this opportunity. Interestingly enough, the best companies I found at that time I learned about during BBQs and parties, not over cold emails or networking events.
I decided to join FundersClub because (as we say internally) if the software is eating the world, we are eating Venture Capital. We have more engineers than investors and that's telling for our approach with founders in general.
I know that breaking into the industry is very hard, but it's important that you reflect on the type of fund you want to be a part of since cultural fit should be a compulsory item on your search for what fund to join.
I called every former employee of FundersClub and hunted founders that did not have a good experience with them. Took me a while to find someone that had a single negative point about us. That was an excellent sign.
At the early stage is this is probably your best currency as an investor. Assume that the best ones will always have funding resources to take them to the next level. On the best deals I have done so far, the founders picked me, not the opposite. You want to be the first phone call for when something good and when something bad happens. Empathy is an important currency.
The best possible recommendation you can get is from existing portfolio companies, the second-best type is from people that the fund you are applying for has turned down in the past. Additionally, other employees of the company/fund can also help. Get them all. Have them send their emails to the GP or hiring manager right after the in-person interviews. Timing on references is crucial. You want them to come in before the manager goes out to request them.
At FundersClub I get to the source and close my own deals with more freedom than traditional VCs. As an associate that has been in the business for 7 months, I can put it on my resume that I have been fortunate enough to co-invest with Tier-1 firms, such as RedPoint, Trinity, and A16Z. Having the freedom to pursue a path in Venture is an important aspect that you want to account for when you are starting in this business. I recall asking a friend of mine that works in one of the most traditional firms in the business:
me: how do you make a partner at firm x?
friend: probably when someone else dies, quits, or if we raise a much larger fund
me: (gasp)
I've heard from others that if you want to get rich fast, become a founder. The venture is the "get rich slow" path and I tend to agree. Once you are in and have proven results, the next step is to have access to carry.
Founders are probably some of the most demanding types of clients that you will ever have. The best ones are all-in their business and you should always be available to serve them. One thing I've realized is that being in Venture can easily consume most of your life. Every weekend I'll have 2–3 calls that are related to work. I love it, so it's not a problem. But I think it will only work for you if you are truly passionate about making a difference for founders. We are in the service business.
I would not have gotten this job without the help of some incredible mentors that were supportive both from the tactical and spiritual level. They shared with me the difficulties of the profession and provided me on-point advice on next steps and even helped me with my email responses to the FundersClub team. Some of them were kind enough to provide me a positive recommendation.
Special thanks to:
Mike Hennessey, Ben Hadley, Anderson Thees, Lee Jacobs, Ty Walrod, Elton Miranda, Gabriel Senra, and Ethan Appleby for your help and support.
Why Being a VC Sucks — by Charlie O’Donnell, from BBV
Want to work in VC, here is how, by Mark Suster from Upfront Ventures
Fortunately, institutional investors in Brazil now understand that they must have a better, diversified portfolio across all asset classes.
Genuine appreciation doesn’t come from others. It comes from not allowing any external circumstances to be in your to be in your way.
Most that have achieved enormous success did not conform. All great founders are well-mannered misfits. None of the founders we back are ordinary people.
