There are four types of investors on any VC firm’s team: pure investors, operators turned investors, domain experts and jacks of all trades. At their core, each VC has varying experience across three key dimensions: investing experience, operating experience and domain expertise. Investing experience includes investment banking, corporate development and principal investing roles (e.g., venture capital, growth equity, LBO). Operating experience includes starting a company, working at a startup, working at a large corporation and being a consultant. Domain expertise is best characterized by activities that create the products in an industry. In the IT sector, domain expertise is coding; in pharma it’s being a chemist.
The first three VC types are more or less deep in one of the three types of experience, while the last has some experience in each of the three types of experience. Do note, however, that often jacks-of-all-trades are relatively light in domain expertise. For example, a tech investment banker turned web startup founder may not be able to code, but has both investing and operating experience in technology, giving him some domain expertise.
You need to assess the various types of experience that you possess. If you have some investing experience, you may want to check the operating experience box by working at a startup, taking a role at a large corporation or starting a company. Grad schoolers should tack on bonus points by either interning or advising startups. Alternatively, if you have operating experience and you want to get more investing experience, investment banking or primary investing (at a fund or in a corporate development group) can help to check this box. Make sure every bit of experience you get is in the domain in which you want to invest. One of the best ways to stand out among a crowd is to immerse yourself in the industry. First, read up on all of the relevant blogs and attend networking events.
Go local! Building relationships in the community will help you get the job. Your contacts not only likely make intros to VCs, but they also can put in a good word when a VC is debating between you and other candidates. Further, having those relationships will put you more in the know. When a prospective employer mentions a regular in the local venture scene, it’s always nice to be able to say ‘yes – I know him he’s a friend of mine.’
In the early stage world ‘getting coffee’ is code for a number of types of business meetings. You may be pitching an idea, feeling out a potential business partner or otherwise – all over a proverbial cup of coffee. The coffee code holds true for interviewing with VCs, as well. Unlike more formal and structured recruiting processes, when you’re connecting with VCs you shouldn’t ask for an interview – you should simply ask them if they’re around for a cup of coffee. It’s more casual, disarming and signals to the VC that they won’t have to formally say ‘no’ to you if they’re not interested – rather they only have to take action if want to consider you for employment. Another reason why it’s important to grab coffee is that since this has become the culture of the industry (at least in NYC), by asking someone to grab coffee you’re signaling that you understand how things operate in the venture business.
Note that the VC knows you’re looking for a gig when you sit down for coffee and they’ll offer to help if they feel that it’s the right fit. So, don’t try to force it. You may soft pedal the these topics by saying, ‘I’m trying to find my path, do you have any advice?’ and ‘Are there other folks that you think I should be speaking to?’ These are much softer, yet more effective, messages than ‘Are you hiring, do you know anyone who is?’ and ‘Can you intro me to other VCs?’
There’s a basic, yet important premise for VC candidates to understand before they attend their first VC meeting: VCs invest in different things. At a high level, they invest in different sectors, make their first investment at different stages and vary greatly in their geographical focus. At a more granular level, VCs look for different aspects of businesses (such as product, market size, team, barriers, etc.) when picking their investments.
As a result, when you show up to your first “coffee” with a VC it’s important to understand what they invest in. At the bare minimum you must understand their stage, sector and geographical focus.
Most investors generally don’t expect folks outside of their firm to understand the nuances of their strategy. Sorting this out from the outside can be difficult and sometimes impossible. While you might be able glean some detail from their personal portfolio, you should try to understand this level of a VC’s investment thesis when you meet them. Asking them to illuminate the second order considerations of their investment thesis demonstrates your understanding that most VCs invest differently – it will make you look insightful.
When I first started looking for a venture job a mentor of mine suggested I be sure to come bearing gifts. The more you give, the more you get. VCs are always seeking deals, so show them you know something and highlight pros and cons of the opportunity when you address it. If you don’t have a deal to bring to the table when you meet a VC for coffee you need to start going to more networking events. Many entrepreneurs that are looking for capital are out networking. If you’re not meeting them, you’re not on the scene enough.
VCs are busy and usually understaffed. As a result, they often realize that they need to hire someone long after they should have and that they typically don’t have the resources to run a proper recruiting process. When VCs realize that they need to make a hire, they often do what’s easiest, and reach out to the candidates who have expressed interest and developed a relationship with them recently.
If you don’t stay in front of them, they might forget about you when they start looking for someone. Being disorganized, VCs will respond well to candidates with strong interpersonal skills who are capable of commanding their attention. You need to stay in contact with would-be-employers so that when the door opens you’re standing in line. Make sure you’re in touch often enough that they can create a perception of you, but not so frequent that you’re a nuisance (every few weeks is about the appropriate frequency).
Mark Peter Davis formerly worked with DFJ Gotham, he’s currently serving as the CEO of a stealth start-up in New York City. He blogs here, tweets here, and is LinkedIn here. All opinions expressed are entirely his own.