Like any other business enterprise, venture capital firms require managers to oversee the daily business activity of the company. There are needs for human resources, accounting and information technology managers. These supporting roles are often referred to as “back office” as opposed to “front office” personnel who actually bring in revenue.
These type of positions are not only needed by the venture capital firm itself, but are also utilized by many of the portfolio companies in which the fund invests. These roles provide tremendous exposure to both the VC partners and the portfolio companies’ management teams. These managers conduct the daily operations of the venture capital firm and ensure that all policies and procedures that the company has established are followed.
Back office positions can be a foot in the door for someone wishing to break into the venture capital industry. However, experts caution that this path is often the exception, rather than the rule, to moving into a front office position either sourcing investment opportunities or managing investments. More likely, with exposure and outstanding performance, individuals who begin in these support roles may eventually find themselves in more senior back office positions within the venture capital firm, or in a management role at a portfolio company.
Venture capital firms are also usually smaller in size and infrastructure than private equity firms and investment banks. Often one of the senior partners of the firm will take on the additional responsibility of acting as CFO, and managing all back-office operations. These operations can include managing capital calls and distributions, compiling and reviewing the financials for the limited partners’ quarterly and annual reports, overseeing investor relations, and managing the firm’s budgeting and accounting.
A quick look at some of the back-office positions listed at JobSearchDigest.com gives you an idea of what types of skills are needed for these venture capital jobs. For instance, a venture capital trust based in London needs a fund accountant who can manage and work with the fund administrators, handle queries from investors and portfolio managers and develop internal management information around fund performance. Interestingly enough, this VC fund has outsourced all of its day-to-day accounting. However, they now find they need a trained accountant to act as a liaison between the outsourcing companies, investors and the managing directors of the firm.
Another accounting position, this time for an accounting manager for a VC firm in the Boston area, would be involved in all financial activities for the firm, including partnership allocations, period financial reporting and external liaison activities. Five or more years of accounting experience are required for this position, which pays in the low six figures.
Finally, a controller for southern venture capital group would assist the CFO of the firm with a variety of duties, including tax preparation, financial statement analysis and investment partnership accounting.
As with private equity and hedge funds, there is a growing trend among venture capital firms to outsource back-office operations. This can be a more cost-effective option for some venture capital firms who would rather focus on their core competencies than build an infrastructure. It is also being driven by increasing demands for transparency and recordkeeping by large institutional investors. So if you are interested in pursuing a supporting role within the venture capital industry, you would be wise to research and approach one of the major outsourcing firms that specialize in this space.
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