Second year student at semi~high target school on east coast, advice on entering Venture Capital
Hello everyone,
I am currently a B.S economics major with plans of a psychology/marketing/mathematics minor. My primary goal was to enter investment banking after undergrad, and hopefully move on to the buy side. However, I was wondering if it was possible to have a high chance of breaking into Venture Capital, specifically, after undergrad. I've heard that its not as usual as investment banking, accounting, or consulting, to name a few, but it would be the dream in my opinion. What are some of the most common paths that students take if they are focused on VC early on? My goal of entering investment banking was not to stay long term, and I most likely would not want to stay on a VP track or any long course with direct promotions. I have a consulting internship from Deloitte for their discovery intership (freshman summer), along with certain certifications that probably are not significant.
On a side note, would being an angel investor throughout my undergrad years be a good idea? I entered college with a generous aid package (<10k/year OOP), which allowed my parents to be willing to pass the college fund to me directly. I have around $110,000 after calculating for 2 more years and additional living costs, but currently keep it distributed through mutual funds, equities, high yield savings, and SPY. Is looking into angel investing and learning how to do it (if that is even possible in my current situation) be helpful or would sticking to my normal path be the right move?
Breaking into venture capital (VC) directly out of undergrad is challenging but not impossible. Here are some strategies and paths that could enhance your chances based on insights from Wall Street Oasis:
Leverage Internships: Your consulting internship at Deloitte is a strong start. Aim for internships in venture capital, or at least in related fields such as investment banking or private equity. These experiences are invaluable for building relevant skills and networking.
Network Extensively: Connect with professionals in the VC industry. Attend industry conferences, seminars, and networking events. Utilize platforms like LinkedIn to reach out to VC professionals for informational interviews.
Develop a Strong Understanding of the Market: Regularly read industry-specific news and analysis from sources like TechCrunch, Crunchbase, and VentureBeat. Understanding market trends, investment strategies, and the startup ecosystem is crucial.
Technical Skills and Education: Your background in economics with a minor in psychology/marketing/mathematics is beneficial. Consider enhancing your technical skills, perhaps with additional courses in financial modeling, statistics, or programming.
Start Small with Angel Investing: Given your financial situation, starting small with angel investing could be a strategic move. It will give you firsthand experience in evaluating startups and understanding the investment process. However, it's important to proceed with caution and possibly seek guidance from experienced investors.
Consider a Startup Experience: Gaining experience in a startup, even in a non-investment role, can provide insights into how startups operate and what VCs look for in potential investments.
Regarding your question about angel investing during your undergrad years, it could indeed be a beneficial learning experience. However, angel investing involves significant risks, and it's crucial to do thorough research or even find a mentor before starting. Diversifying your investments and gaining practical experience through internships or startup involvement might be safer and equally educational alternatives.
Remember, each step you take should build towards a comprehensive understanding of the VC landscape and help you develop a robust network within the industry.
Sources: Breaking into Venture Capital out of Undergrad??, Is VC out of undergrad a good idea?, https://www.wallstreetoasis.com/forum/venture-capital/early-stage-vc-101-5-questions-you-better-be-able-to-answer?customgpt=1
Don't angel invest at this stage. It's a bad idea without a network, expertise in a specific area, and steady income/a large amount of savings.
There are plenty of threads on paths to get into VC but at your age the most logical path is to intern at a start-up. VC is all about your ability to be scrappy and build a network. The best way to do that is to join an early stage company and get first-hand experience with start ups. Once you're there, start reaching out to VCs that invest in the space you're in and pitch them start up companies that they may not know about. You'll have a lot more credibility as someone that's actually in the industry and it demonstrates that you're trying to bring value from the first conversation.
Alternatively, if you have a close family friend that runs a fund, ask them for an internship. To nobody's surprise, I've seen that work quite a few times.
Should I focus on Investment Banking Internships as well though? I wouldn't want to give up that traditional career stepping stone based on a lower chance to get into the VC industry out of undergrad... To be completely honest I heard its near zero.
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