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As I move on after completing ~2 yrs at @kalaaricapital, I wanted to capture what life for a junior VC in India looks like. A THREAD!
(1/n) I believe that breaking into VC has many paths & since my story was fairly unique, what I say about breaking into VC doesn’t usually apply to others. So this thread is only going to focus on life a Jr. VC
(2/n) As a Jr. VC you primarily have 3-4 key job functions. Focus on these varies across the firm you are in. These are Sourcing, Deal Evaluation, Portfolio Support & Internal Ops.
(3/n) SOURCING: Sourcing is the lifeblood of any good VC firm and this is where the (if at all) glamorous part of VC networking is at play. Ur firm would typically invest in <1% of the deal it sees & senior folks in the team usually have much better networks, in-bound deal flow..
(4/n).. to ensure higher degree of conversion. As a Jr. your role is to ensure that the firm sees as many deals as it can. So you have to focus on ensuring coverage rather than conversion.
(5/n) Therefore as a Jr. VC if you are able to convert 1 in 500 deals you see to portfolio or a seriously high conviction IC, then you will probably be ranked in the median. If this ratio is higher, you are beating most other junior folks..
(6/n)..If lower, you need to think deeply about what channels are working for you and how you skew more towards that. People usually commit the mistake of being highly transactional while sourcing deals.
(7/n) This means not giving proper followups, not helping others or just data hunting from comps. This behavior usually comes back to hurt in the long run.
(8/n) Deal Evaluation: This is the aspect that you have to be absolutely brilliant at. If you don’t do this well, most other things will be discounted. This is where your curiosity, ability to put in long hrs and structured thinking will help.
(9/n) This also includes building depth in sectors and the aim should be that you should become synonymous with certain sectors inside your firm initially, and then across the broader ecosystem of other Jr. VCs, founders
(10/n): Portfolio Support: Honestly, I think as a Jr. VC the amount of impact you can create a portfolio is extremely limited because of various factors such as amount of exposure with the company and the ability to solve some usual problems at early stages.
(11/n): I found myself extremely deficient in helping portcos hire better, give advice on fundraise, culture etc. Hence, what I used to focus on was ensuring that I gave founders regular updates on competitive landscape, evolving market themes, adjacencies and MIS
(12/n): Internal Ops: This is where the culture of the firm matters, but there are certain processes around portfolio tracking, pipeline mgmt., where junior folks of the firm are usually pulled in. These don’t take a lot of time but can be a rich source for you to learn a lot
(13/n): In addition to these functions, I also wanted to capture some other thoughts around exits from a VC careers, how one should think about it and skills that will help you succeed.
(14/n): EXITS: People often say they want to “try” VC. I think that’s a very poor way of looking at it. Especially, when you think about the risks involved in a VC career if it doesn’t work out! In US, they say that the world is full of ex-VCs
(15/n): That will soon start hapening in India as well. VC firms are quite lean . Most junior roles are two years and exit roles, while partner track roles have very low chances of conversion and can take ~10-15 yrs. Then if this doesn’t work out for you, what are options?
(16/n): Usually these involve going to a startup, starting up urself, going to work for a different fund or Bschool. Notice, how all these are still in and around the startup ecosystem. Very seldom will people move back to consulting roles, PE or public market funds.
(17/n): That’s because the skill set required in all of those roles are quite diff from VC. Hence, the right way of think of a role in VC should as a finance role in technology function, rather than a job in the finance function. Therefore, the “try” approach is quite risky
(18/n): RIGHT REASONS FOR ENTERING VC: While everyone has their own reasons, I think you should come to VC if your reasons involve some combo of the following: excited to work with tech., want to start something up in the future, lifelong curious person, YOU JUST WANT TO LEARN!
(19/n): EMPATHY & AUTHENTICITY: The most imp. skillset you will build in this role would be empathy! I would be humbled everyday by the kind of personal/professional risks founders take and hence it requires that everytime I say no, I have done enough work to have a solid answer.
(20/n): Even with that in mind, my responses would usually be sub-optimal! Authenticity is another key element. Don’t promise more than you can deliver, because for startups and employees, being lead on by Jr. VCs can lead to a lot of cognitive load, disappointment.
(21/n): CONSENSUS BUILDING: This is severely under-estimated, but consensus building is critical. You have to ensure that any company you like, you can get rest of the team excited about it as well.
(22/n): This is where you do a lot of sales internally and actually is a good reason to even go do an MBA! In a case-discussion led pedagogy, when you have to argue your POVs and get others on board, that is quite similar to VC IC Meetings!
(23/n): This by no means is exhaustive and each of the buckets here has multiple layers that need to be explored and discussed. Happy to chat with you if you are looking to understand a career in VC better!
