Last year, venture capital investment hit $136.5 billion, a nearly record-breaking boom we haven’t seen since the dot-com days. And now that money is seeping out of Silicon Valley and into new markets, opening up all sorts of new opportunities.
Naturally, a lot of people want to break into the red-hot world of VC, though it’s incredibly elusive. Experts have written scores of books and articles aimed at cracking the code, myself included.
While plenty manage to dabble at the fringe, becoming a full-time VC is especially tricky. But it can be done. So, I asked seven VCs I know for their best advice on leveling up in the industry:
Learn before you earn
Clinton Foy left a cushy COO job at a company with $3B in revenue to become a VC partner—unpaid. “I only started earning a salary a year and a half later, by working my ass off,” he says, adding that he dedicated those early days to building a solid network and growing a new fund. Today he’s managing director and general partner at Crosscut Ventures and insists he wouldn’t change anything about his journey to the top.
“My best advice is learn before you earn,” he says. “Put yourself in a challenging growth and learning mode, sacrifice salary for carry, bet on yourself, and develop a startup mentality as a VC.”
Nick Kim, head of platform at Crosscut, also points out that building your career from the ground up will also help you discover your focus. “It starts with being helpful to founders, and over time you’ll sharpen your focus on who and what you’re looking for,” he explains. “When you find [your focus], you’ll jump at the opportunity to take the risk.”
Network, network, network
“A helpful introduction only takes a couple minutes but can have a lasting impact on your career,” says Alex Shtarkman, associate at Revolution Ventures. “Immerse yourself in the ecosystem, and spend as much time as possible talking to founders, learning about various business models, and networking with investors.”
It’s important to be seen as someone who doesn’t say on the sidelines. “Send awesome and relevant deal flow to your favorite VCs, so they see you as an active player in the game and as a useful resource and partner,” says Raj Singh, managing director of JetBlue Technology Ventures.
Make a hypothesis, then test it
Ash Fontana, managing director of Zetta Venture Partners, advises newcomers to pick a market, then create a map of all the companies in that market. He suggests using an online template, such as those provided by CB Insights.
“Next write an investment memo on the one company you’d invest in,” he says. “This memo lays out why you would invest, what you expect to happen, and the risks you see associated with the investment.”
Now it’s time to invest according to your hypothesis. “Getting skin-in-the-game, tracking the company, confirming and disconfirming your investment hypotheses,” he says. “Picking the time to buy and picking the time to sell will give you a lot to talk about in interviews with VC firms.”
Know your ‘secret sauce’
Succeeding in the VC world comes down to knowing your place in it, says Ben Sun, general partner at Primary Venture Partners.
“If you become a full-time VC, you need to realize that it’s really rare these days to have ‘proprietary’ deal flow,” he says. “There will be other VCs that you will have to contend with to win a deal.”
In order to make that happen, you need to figure out what your “special sauce” is, he says. “You need to show what makes you special, whether it be deep industry expertise, an amazing network, or some other superpower which will compel an entrepreneur to work with you versus other VCs,” he says. “Remember it’s not about just picking a deal but winning the deal.”
In the VC world, it’s important to remember that sometimes passing on a deal is the right move—but you shouldn’t get discouraged. “Each fund is building a highly curated portfolio of investment professionals. Great funds pass on great companies—and they, too, pass on talented prospective investors. That’s okay,” says Meera Clark, senior associate at Obvious Ventures. “What candidates should focus on is identifying partners who align with their values, strengths, and sectors of interest.”