The venture capital world is comprised of a few hundred small firms, usually structured as partnerships and employing between 2 and 50 people. They are lean and flat organizations, dedicated to the entrepreneurial culture and usually focused on a particular industry niche such as technology, biotech, or more recently, clean technologies.
Venture capitalists enjoy a high degree of job satisfaction, working with very smart, passionate people who try to turn their brilliant ideas into a business success story. Venture capitalists help fund these potential high growth companies and help them make critical business decisions to hopefully develop the next Yahoo, Intel, FedEx or Apple.
However, as a well-known venture capitalist and evangelist Guy Kawasaki says, venture capital is a job you choose at the end of your career, not the beginning. When you’re young, he feels you should work 80 to 100 hours a week creating a product or service that changes the world. Not sit around a boardroom table listening to someone else explain why their idea is revolutionary.
That’s why venture capital firms generally seek out seasoned veterans, scientists and executives with deep experience in a particular industry. Very few MBA grads manage to get their foot in the door (winning a Kaufman Fellowship is one way). Other junior hires get snapped up from the top businesses schools such as Harvard or Stanford or through personal contacts and networking.
Those with entrepreneurial and operating experience are more likely to be hired. However, these types will be accustomed to hands-on involvement managing a company, and will have to get used to sitting back and working to keep the deal flow coming into the firm rather than getting involved running a company on a day-to-day basis.
In fact, according to some VC insiders, the average firm reviews close to 2,000 potential deal proposals each year. That means if you are an associate at the firm, you’ll personally have to analyze between 50 to 100 proposals per week. You’ll have to sift through the pitches that don’t match your firm’s focus, uncover the few decent ones, interview the entrepreneurs and possibly invite them in for a pitch. The flip side is, by constantly reviewing so many opportunities, you’ll get a broad overview of trends and changes in your particular industry of interest.
It might take several years for a venture capitalist to get wealthy, but they can make large amounts of money with less risk and burnout than the entrepreneurs that they fund. The average total compensation, industry-wide, for venture capitalists was $255,000 USD, according to the 2008 Job Search Digest Private Equity and VC Compensation Report.
The Holy Grail for a venture capitalist is to see one of the firm’s investments take off and become a billion-dollar success story. You are on the ground floor to profit financially as well as enjoy the satisfaction of knowing that some of your decisions and suggestions played a key role in getting the business to this stage.
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