4 Tips for Breaking Into Venture Capital
Recently I joined a webinar hosted by SoGal Ventures entitled “Build Your Career: Breaking Into Venture Capital.” It was part of a monthly series where the SoGal Ventures founders host another venture capitalist to discuss what a career in VC is like.
I found out about the webinar on LinkedIn and was excited to join because venture capital is so interesting to me. I really enjoyed the discussion and I learned several things that I’d like to share with you:
YOU CAN START RIGHT NOW
One of the biggest takeaways for me was when the webinar’s co-host and co-founder of SoGal Ventures, Elizabeth Galbut, said: “You can start doing the job of a venture capitalist before you’re a venture capitalist.” When you boil it down, a venture capitalist’s job is to find companies to invest in and help them scale. So even if you don’t work for a VC firm right now, you can still become an expert in industries you’re interested in and get to know the people in the space (other industry experts, other investors, entrepreneurs in the industry, etc.).
That piece of advice really inspired me. Instead of looking at venture capitalists with, say, 20+ years of experience and feeling like I’ll have to wait a lifetime before I have a shot at becoming a venture capitalist, Elizabeth reminded me that I can start taking the initial steps right now!
VENTURE CAPITALISTS ARE NOT THE STAR OF THE SHOW
This quote from the webinar’s other co-host and the Director of Portfolio Engagement for Rise of the Rest Seed Fund at Revolution LLC, Amira Ouji, also stopped me in my tracks, but it’s so true. Venture capital firms and teams are often scrappy and it’s not always glamorous. The best people for the job are the ones who put founders first.
At the end of the day, success for a venture capitalist depends on the success of their portfolio companies. It’s important to put ego aside and do everything in your power to find the right founding teams and help them succeed. If you don’t enjoy working “behind the scenes” and being a team player above all else, it might be worth pausing and reflecting on if a career in VC is right for you. And hey, if you do want to be the star of the show, there’s no shame in that; maybe you can switch gears and become a founder yourself!
THINK ABOUT WHAT YOU CAN OFFER STARTUP FOUNDERS
Like I discussed in point #2, one of the key focus areas for a venture capitalist is finding the right founders and helping them succeed. So if you want to be a venture capitalist one day, you can start thinking now about how you could help founders in the future. For starters, here are three categories of assistance you could offer:
YOUR SKILLS
During the webinar, Amira pointed out that “anyone can write a check, but companies need help to scale.” Most venture funds today offer some type of post-investment support. This support could be sales training, marketing advice, financial expertise, technology expertise, or help hiring the right team members to fill those roles in-house. If you want to be a venture capitalist, start taking stock of the skills you have (and the skills you can hone) that would eventually be beneficial to a founder.
YOUR NETWORK
Another potential value-add to founders could be your network. It’s not realistic to assume that you’ll ever be able to help a founder with everything, but being able to point them to someone in your network who can help fill in the gaps is invaluable. I’m sure you have heard this 100 times, but work on growing your network! It will pay dividends later.
YOUR EMPATHY
Lastly, empathy is something all founders need. Starting a business from scratch includes a ton of hard work, putting yourself out there, getting told ‘no’ over and over again, failures; the list goes on. You’ll have more success in the venture capital world if you’re able to form deep and meaningful relationships with entrepreneurs, and being able to empathize and/or relate will help strengthen that relationship.
Elizabeth suggested trying to start something of your own, even if you’re interested in the VC side, just to gain perspective and experience what it’s like to actually “build something and put it out into the world,” as she says. Many successful venture capitalists were previously entrepreneurs themselves; their experience as founders gives them a unique point of view when interacting with other founders once they’re on the VC side of things.
THINK ABOUT WHAT YOU CAN OFFER VENTURE CAPITAL FIRMS
This is essentially the flip side of point #3. In addition to thinking about how you can help founders one day, you also need to think about how you can help a VC firm. And the best way you can prove your value to a VC firm is with deal flow. Here are two ways to start creating deal flow before you’re actually a venture capitalist:
YOUR NETWORK
Surprise! Your network will help you here, too. Elizabeth and Amira both stressed the importance of networking with founders, investors, and industry experts so that you’re “in the loop” when it comes to potential investments. Entrepreneurs typically know many other entrepreneurs, and they’ll definitely be more likely to make introductions if you’ve proven helpful (per point #3 above).
YOUR INDUSTRY KNOWLEDGE
Extensive knowledge of an industry, its trends, and its players can also lead to deal flow. And the good news is, you don’t have to wait until you’re a venture capitalist to become an expert or thought leader in an industry that interests you. Nor do you have to wait until you’re a venture capitalist to start building relationships with VC firms; you can start sending them deals to “get a foot in the door.”
I really encourage anyone interested in venture capital to join these webinars in the future because it’s free, open to everyone, and I learned so much. I was surprised by how intimate the meeting felt; there wasn’t really a prepared script. Instead, Elizabeth and Amira let the participants drive the discussion with their questions.
Here’s some more information about the hosts and their respective firms:
ABOUT ELIZABETH GALBUT
Elizabeth Galbut is a founding partner of SoGal Ventures. She started her career consulting for Deloitte. Elizabeth also founded A-Level Capital, a student-led venture fund powered by Johns Hopkins University students. Elizabeth was an honoree on Forbes’ “30 Under 30 in Venture Capital” list in 2018.
She received her B.A. in Economics and Government from Georgetown University, her Master’s in Design Leadership from the Maryland Institute College of Art, and her M.B.A. from Johns Hopkins University (Carey Business School).
Read more about female venture capitalists, here.
ABOUT SOGAL VENTURES
SoGal Ventures prides itself on being the first female-led millennial venture capital firm. It was founded by Pocket Sun and Elizabeth Galbut and based in New York City, NY. They are focused on companies with diverse founding teams in the U.S. and Asia who are working to shape the future of how people work, live, and stay healthy. They have invested in over 70 companies, including Everlywell, Little Spoon, Werk, and Winky Lux.
Read more about female-led VC firms, here.
ABOUT AMIRA OUJI
Amira Ouji is the Director of Portfolio Engagement for Rise of the Rest Seed Fund at Revolution LLC. She came to Revolution LLC from HBCUvc. Amira started her career in Marketing, holding roles such as Media Strategist for Bayer, Manager of Digital Sales Planning for Westwood One, and Digital Marketing Specialist for Accenture before moving into venture capital. She received her Bachelor’s in Marketing from Howard University.
ABOUT RISE OF THE REST SEED FUND AT REVOLUTION
Rise of the Rest Seed Fund invests in startups outside of Silicon Valley, New York, and Boston.
Each year, the team visits five cities as part of Revolution’s Rise of the Rest Road Trip to find potential investments, visit with fast-growing local startups, and spend time with local policy makers.
The fund’s investor list includes many heavy hitters such as Steve Case, Jeff Bezos, Tory Burch, Sara Blakely, Ray Dalio, David Rubenstein, Howard Shultz, and many others.
The fund has invested in over 100 companies, including LiveSafe, Stackfolio, Hatch, Summersalt, and Ordway.