How to Break Into Venture Capital: The Non-Traditional Route

Venture Capital has recently become a prominent buzzword, with awareness previously limited to Silicon Valley, New York, or Boston. The pandemic, or the TV show "Billions”, prompted people to explore unconventional ways of entering the finance world, a realm often perceived as accessible only to a privileged few. However, traditional routes involving Ivy League schools and prestigious work experience in investment banking at a major player like JP Morgan or Morgan Stanley may not be feasible for everyone due to age bias, diverse backgrounds, and other barriers.

What is Venture Capital?

The basis of venture capital is to raise outside capital from high net-worth individuals, endowments, foundations, universities, family offices, corporations, and whoever else you can find to fit your vision. With that capital, you source the best companies you can that align with your thesis, or your company mission statement if you will, regarding the type of companies you want to invest in and for what purpose.

Once you have found the lucky founders, you go through a rigorous process called due diligence to make sure the companies are who they say they are from a market, competitive, technical, legal, and financial perspective. Most founders don’t make it past this mark. Those that do make it go through more interviews with customers, clients, and market experts before an allocation of capital and ownership is agreed upon.

There are more elements to it but that is venture capital in a nutshell. The job opportunities in Venture are diverse depending on the firm. They can range from being an Analyst, Associate, Director, Platform, Partner, Entrepreneur in Residence, Marketer, Principal, General Partner, and Managing Partner.

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The Best Non-Traditional Routes Into VC

I have drawn from my own journey and the experiences of others to provide insights on landing a Venture Capital job without the need for a $200,000 investment in a big-name school (i.e. Harvard, Wharton, Stanford, Columbia, MIT, Duke, UC Berkeley, Univ. of Texas at Austin etc.).

1. Fellowship Programs

Explore underrepresented fellowship programs like HBCU VC, Black VC, and VC Include, which are open to training individuals with minimum qualifications in VC fundamentals. These programs offer relationships with VC firms, providing knowledge and internships that can lead to opportunities as a summer associate or analyst.

Read: The 10 Best Venture Capital Fellowships

2. Scouting Programs

Develop networking skills and relationships with VCs to become a scout for them. Learn their investment thesis thoroughly and actively seek out promising deals. Building a reputation for identifying good opportunities may lead to job offers, and you can even negotiate carry-on deals, bypassing traditional analysis or associate roles.

3. Work History

Leverage your expertise in a particular niche to become a consultant for a VC firm. Whether your background is in Entertainment, Sports, or Fly-fishing, VC has something for everybody. If it aligns with a VC's thesis, you can contribute as a consultant or venture advisor.

4. Networking

Effective networking is crucial in VC. Being well-connected and knowledgeable about the latest startups can open doors. If you consistently engage with founders and demonstrate hustle, some VCs, especially new funds, may be willing to take a chance on you for smaller tasks.

5. Startup Employee

VCs often recruit from startups they've invested in. If you work at a startup and want to transition into VC, build relationships with VC firms. Your work ethic and contributions to the startup may attract VCs seeking similar qualities for their teams.

6. Raise a Small Fund

Demonstrating entrepreneurial skills by raising a small fund showcases your ability to navigate the VC landscape. While not polished, the experience of deal sourcing, raising capital, and funding companies proves your potential to play at a higher level.

7. Angel Investing

Many VCs start as angels or manage angel funds. Engaging in angel investing is an excellent way to practice deal sourcing and due diligence, honing your skill set for outside capital allocation.

8. Public Speaking or Thought Leadership

VCs appreciate contrarian views. If you have influence through social media, especially if your perspective aligns with a VC's worldview, they may be interested in your insights. Connect with VCs who share similar views on the topics you've mastered.

I’m sure there are a host of other traditional routes I haven’t mentioned but these are a few I’ve seen work on a continual basis. Drop me a line if you have ideas for other routes. The more the merrier.

Terrence is an Investment Associate Consultant at MetaProp, the world's leading venture capital firm focused on the PropTech industry. He has over 150 technology companies in his portfolio and has personally invested in 15 deals with verifiable exits. Terrence is also a Senior Fellow at HBCUvc, where he is committed to creating funding opportunities for historically excluded entrepreneurs and building inclusive startup ecosystems. Book a free intro call with Terrence and break into venture capital today!

Read these next:

• The 50 Most Common Venture Capital Interview Questions
• How to Get Into Venture Capital: Lessons Learned Interviewing 100+ Investors
• The Top 10 Venture Capital Books
• How to Get a Venture Capital Internship

FAQs

How to get into venture capital from college?

• The typical path into VC starts with working a few years in investment banking, then a few years in a small private equity firm, and then you get a chance at VC. It can take 10 years. The alternative is to get an internship early, prove yourself, and work your way up.

How to get access to venture capital?

• You can reach venture capitalists through warm introductions via mutual contacts, startup events, accelerator programs, LinkedIn, or by submitting pitches directly on their firm's website. A strong pitch deck and a clear business model improve your chances of a response.

What is the exit route for venture capital?

• Venture capital (VC) investors may decide to sell their investment and exit a company. Alternatively, the company's management can buy the investor out (known as a 'repurchase'). Other exit strategies for investors include the sale of equity to another investor and secondary purchases.

How do I reach out to venture capitalists?

• A good technique to get in touch with a VC is through referrals from investors. Meeting other VCs through fellow investors can be the ideal introduction, especially if they are eager to join your investment round as well.

Do you need an MBA for VC?

• VC funds startups and emerging companies, combining high risk and high reward. A master of business administration (MBA) degree isn't a requirement to work in venture capital, but the graduate degree can help you build your resume and connections to work in the field.