Getting a job in venture capital is very competitive and challenging. Venture capital firms receive hundreds of applications for just a handful of open positions. The barriers to entry are high, and candidates need the right experience, skills, connections, and pedigree to land one of these coveted jobs.
What are the requirements to get a job in VC?
Here are some of the key requirements and qualifications needed to get a job in venture capital:
- Education – Most venture capital firms want candidates with an MBA from a top business school like Harvard, Stanford, Wharton, etc. Some may accept candidates with other master’s degrees in technology, engineering or business.
- Prior experience – 2 to 5 years of work experience is required, in investment banking, consulting, corporate finance roles, or in business operations at a startup or tech company. This provides foundational skills in analyzing companies, industries and deals.
- Financial modeling – Strong financial modeling skills are a must. VC associates spend a lot of time building complex financial models to evaluate investment opportunities.
- Industry knowledge – Deep understanding of the VC/startup ecosystem and knowledge of hot industries like SaaS, biotech, AI, etc. is needed to assess deals.
- Networking – Having connections through alumni networks, social scenes, conferences, warm introductions, etc. helps candidates get a foot in the door at VC firms.
- Soft skills – Strong communication skills, work ethic, critical thinking and ability to work well under pressure are essential in the fast-paced VC world.
Beyond these table stakes, what really differentiates candidates is having unique experience or skills that adds value, like operating experience, coding skills, deep industry expertise through past work, etc.
How competitive is it really?
The reality is that venture capital jobs are extremely competitive. Top VC firms receive thousands of applications for just a handful of openings. The competition ratio for getting a job can be upwards of 100:1 or 200:1 at the best firms. Here is a breakdown of the competition at top VC firms:
VC Firm | Applications per Year | Positions Available | Competition Ratio |
---|---|---|---|
Sequoia Capital | 5000 | 10 | 500:1 |
Lightspeed Venture Partners | 2000 | 5 | 400:1 |
Andreessen Horowitz | 4000 | 15 | 267:1 |
Accel | 3000 | 12 | 250:1 |
As you can see, the number of applicants far exceeds the available positions at even mid-sized VC firms. The competition is fierce, with hundreds of applicants competing for just a single opening.
What’s the recruitment process like?
The recruitment process at VC firms typically involves multiple rounds, including:
- Initial resume screen – Recruiters quickly scan resumes to filter for target schools, experience, and other criteria
- Phone interview – A 30-45 min call with a recruiter or junior team member to assess basic fit
- In-person interviews – 2-5+ rounds of in-person interviews, often including case studies, modeling tests, and presentations
- Partner meetings – Interviewing with multiple partners to evaluate candidates
- Reference checks – Speaking with provided references to validate candidate’s skills and experience
The process often takes 2-3 months with multiple stages. Fit is evaluated along with technical skills, so candidates need to demonstrate alignment with the firm’s values and culture. Preparing thoroughly for the various interviews and tests is key to making it through the rigorous process.
What backgrounds do most VCs have?
Most successful venture capitalists come from a narrow range of feeder careers and top educational backgrounds:
Career Background | Percentage of VCs |
---|---|
Investment Banking | 25% |
Consulting | 22% |
Private Equity | 18% |
Corporate Roles | 15% |
Startup Roles | 10% |
Other | 10% |
Education (MBA) | Percentage of VCs |
---|---|
Harvard | 22% |
Stanford | 19% |
Wharton | 14% |
Other Top 10 | 20% |
Other Programs | 25% |
As you can see, investment banking, consulting, and top MBA programs dominate the backgrounds of most successful venture capitalists. Very few make the leap from non-target backgrounds and programs.
What are typical salary and compensation at VC firms?
Salaries in venture capital are very high, especially for those coming straight out of MBA programs. Here are typical base salaries:
Position | Base Salary Range |
---|---|
Analyst | $150k – $200k |
Associate | $200k – $300k |
Principal | $300k – $500k |
Partner | $500k+ |
But the biggest component of compensation is carry – a cut of the profits from successful investments. Bonuses can also make up 50-100% of base salaries. The most successful VCs can make tens of millions from carry and bonuses at top firms.
What are the keys to getting hired?
Here are some top tips for breaking into VC:
- Go to a target business school – Attend a top 10 MBA program like Wharton or Stanford to access on-campus recruiting.
- Get investment banking experience – Complete 2-3 years at a top bulge bracket bank working on IPOs and M&A.
- Network constantly – Attend conferences, events, info sessions, and leverage alumni networks to connect with VCs.
- Focus on fit – Research firms carefully and emphasize passion and cultural fit during the process.
- Ace the interviews – Prepare thoroughly for technical and behavioral aspects across multiple rounds.
- Consider startup roles – Get operating experience at a top startup to develop domain expertise.
What are alternatives to getting into VC?
If you are set on investing in startups but unable to break into venture capital, consider these alternative paths:
- Angel investing – Wealthy individuals provide smaller investments in early-stage companies.
- Private equity – Leveraged buyout firms invest in more mature private companies vs early-stage.
- Equity research – Analysts at investment banks and firms research and value public companies.
- Corporate development – Strategic investing arms within large tech companies.
- Startup founder – Build a company and raise venture financing yourself.
While challenging, VC jobs are not the only option to participate in the startup ecosystem and technology investing universe.
Conclusion
Breaking into venture capital is extremely difficult, with hundreds of applicants competing for a handful of spots at top firms each year. The path typically involves attending an elite MBA program, getting investment banking or consulting experience, and networking relentlessly. Recruiting processes are grueling. While the barriers to entry are high, the potential rewards of being involved in technology investing are massive. With careful planning and dedication, it is possible to break in, but requires standing out from the intense competition.