Investors

Breaking Into the World of Venture Capitalism

(Credit: Jorge Salvador via Unsplash) Breaking Into the World of Venture Capitalism
March 8
1:49 PM 2022

Being a venture capitalist gives you the opportunity to support exciting new startups, possibly getting in on the ground floor of a business that will change the way we all live. However, the path to becoming a venture capitalist can seem like a murky one. How do you get started? How do you remain in this difficult and competitive world? The tips below can help.

Understanding the Role

It's important to understand the difference in a venture capitalist and an angel investor. The latter invests their own money while the former generally works for venture capital firms, investing the company's money. However, you can move from being an angel investor or entrepreneur yourself into being a VC, and in fact these can both be ways to get to know the landscape better. You'll need some of your own money for either of these options. If you're looking at your assets, consider whether you need your life insurance policy. If you don't have dependents who might need it, you could sell it via a life settlement. You can review a guide that can help you evaluate the best life settlement company for your purposes. Some people also move into the VC space from investment banking, so if you are just starting your career, are not the entrepreneurial type and don't have much capital, you could consider this route.

Qualifications

In addition to a bachelor's degree, many VCs have an MBA. A background in technology can also be helpful. Staying on top of the industry in general, building your analytical skills and creating and disseminating original research are also great ways to both increase and demonstrate your knowledge.

Networking

Venture capitalism is all about relationships, so building a strong network in this competitive sector is important. One of the best ways to build a network is through an MBA, but there are other ways to do it as well. Getting involved with your local startup community and even volunteering your skills with an incubator can help you get your foot in the door. If there isn't this kind of community where you live, work on creating one. You should also build a profile online, getting to know people on social media and perhaps writing guest posts at well-regarded sites.

Timeline and Lifestyle

In addition to the conventional paths described above, you will probably also occasionally meet people who have entered the VC world through a more unorthodox path, coming from academia or even fields such as journalism or government. Whatever background you come from, you generally cannot expect to do this straight out of college. You'll need several years of experience in investment banking or another field that teaches you to analyze a company. If you do manage to break into the field, you cannot expect to work a conventional eight-hour work day. You may have dinner meetings with clients or spend evenings reviewing material you gathered during the day. Your work days will include time reading about and studying the industry, going to meetings and staying on top of investment news. 

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