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How to Pursue a Career in Venture Capital?

By Sarah Downey '07

April 22, 2019

Tags Business

Being an investor was never something I planned to do. I’d never even heard the phrase “venture capital” while I was at Hamilton. Actually, the first time I remember it was from the movie The Wedding Crashers with Owen Wilson and Vince Vaughn: the two of them show up at weddings with believably self-important cover stories like “we’re two brothers from New Hampshire and we’re venture capitalists.” It was the kind of job title that made my younger self’s eyes glaze over. But now that I’m here, I realize how fascinating, impactful, and unique a career it is.

My path in brief: relevant hobbies throughout my life (video gaming, podcasting, blogging), plus psychology/English undergrad degrees at Hamilton → JD from UConn Law → working at multiple venture-backed startups → non-investment job at VC firm → investment job at VC firm.

A typical day for me might look like this:

• Wake up early and do a 45-minute run. It clears my head, calms me down, and preps me for an extremely busy day.
• Get into the office and have a 15-minute standup with my team. Everyone briefly shares what they’re working on that week.
• At least an hour of partner meetings with my investor co-workers where we talk about new companies we’re thinking about investing in, existing companies we’ve backed that have updates or need help, technology concepts or trends we’re tracking, interesting experts we’re meeting that week, and outbound activities that will help us find new, exceptional founders.
• A call with a board member and fellow investor in a company we’ve backed around that company’s executive team dynamics: who’s performing well, and who we’re worried about.
• A coffee meeting with a founder building an AI app for fitness training and coaching.
• Another coffee meeting with a female VP of Engineering at a pillar Boston company who’s feeling the itch to quit and start her own company.
• A call with one of my co-workers’ companies’ CEO and a board member on an HR crisis they’re facing to get my advice (as a woman and a former lawyer) on what to do.
• A pre-board meeting call with two founders who want to discuss their hiring plan for an important role (and no one can agree on it).
• A 15-minute frenzy of replying to the most important emails in my inbox while cramming a string cheese and some cashews in my mouth and calling that “lunch.”
• A 30-minute bi-weekly update call with one of my founders on what’s happening at the company, which covers news, positives, negatives, and areas where he needs help.
• An hour block that I had to schedule on my calendar just so I can do actual work: follow-ups from meetings, emails, research, etc.
• Drinks and dinner with a portfolio company that’s in Boston for the night from Montreal.
• More emails/putting out fires/responding to texts/catching up on Slacks from my team when I get home.
• Read a book that has literally nothing to do with my job to help clear my mind for sleep.
• Sleep, wake up, change a few variables, repeat.

As you can see, VC isn’t a 9-5 job. It doesn’t really “end.” For me, it’s more than a career: it’s my life. Many of my friends work at startups and at venture firms. I spend nights and weekends educating myself on new technologies and companies, writing blog posts, flying all across North America (and sometimes to London), going to conferences, and putting out various metaphorical fires.

So it’s not easy, and yet there are a lot of misconceptions about what it is. Venture capitalists in general aren’t great developers of junior talent. It’s not like a normal job function where there’s an ascending ladder of neat titles and constructed programs where you move up, like with investment banks or private equity firms that siphon up MBA students. Venture doesn’t really have that. Although some of the big firms might have associate programs, most don’t.

The number of jobs that come up annually is just a handful. There are roughly the same number of open U.S. professional athlete positions as there are available VC positions nationwide. And because of that scarcity, those jobs are always going to people who already have context around startups, their own deal flow, strong networks, unique talents, advisor or angel roles, or as many of the above as possible.

So how do you get a job in VC? It just kind of…happens. You don’t pick venture; venture picks you. But you can increase the odds by doing some of the following:

• Work at a venture-backed startup first, as an operator
• Be an expert in something
• Build something: an app, a book, a meetup group, a podcast, etc.
• Found a venture-scale company
• Get a mentor in the field
• Advise and/or make angel investments in startups
• Understand that most VCs didn’t set out to be career VCs and the path is twisted and varied

For those who want more info on how to get a job in venture capital, check out my blog post on the topic.

How to Prepare While You’re at Hamilton

I’ve always been obsessed with a few things since I was a kid and until today: human psychology, technology (especially via gaming and sci-fi), fitness, and reading/writing. Thus I entered Hamilton without certainty about what I wanted to do for a living, but steered toward my interests with a major in Psychology, a minor in English, and four years on the track and field team. During my senior year I ditched the idea of being a clinical psychologist (I’m too impatient to listen to people’s problems because I just want to solve them) and applied to law school. It seemed like a more efficient route to solve problems, and the day-to-day of law is a ton of reading and writing. (Spoiler alert: having a law degree is barely relevant in VC, but it certainly didn’t hurt. More on that here.)

Looking back, the skills that make great early-stage venture capitalists are exactly those I honed at Hamilton. Early-stage VCs are evaluating people and ideas. It’s less spreadsheet models and investment banking than it is the messy psychology of people and their relationships, the unrestrained vision of imagining what future technology could be, crisp reading comprehension and writing, and a tireless curiosity to learn (mostly through reading) and work hard.

Here’s a list of the areas I focused on while at Hamilton that helped me, followed by additional areas where I would have focused if I could go back in time.

What I Did:

• Embrace reading. Reading is the best way to learn and it needs to be a part of who you are, not a chore. Really absorb what you read and don’t merely go through the motions.
• Hone your writing. Learn to express yourself concisely and clearly. Grammar and spelling matter. I was a Writing Center tutor, so shoutout to them as well as to the English department.
• Hone your speaking. Same notes as above with writing. Force yourself to speak publicly. Everyone’s uncomfortable with it, but forcing yourself to do it is like flexing a muscle that you can develop. I did this through a public speaking class at Hamilton and later as President of the Moot Court Board in law school.
• Take psychology courses. Social psychology is especially useful. Develop a curiosity about people and why they act in the ways that they do, what motivates them, and what they want.
• Cultivate a habit of exercise. Most high-performers in business have an athletic mindset of being able to push themselves through painful situations and win. Regular exercise helps you perform better and prepares you to struggle well. I was on the track team, but it doesn’t have to be that rigorous. Hamilton has an amazing fitness center and a beautiful campus; do what works for you, but do it consistently.
• Keep pursuing your personal interests and hobbies. Don’t squander what you love because you’re in college and need to “get serious.” Yes, stay on top of your classes, but your personal loves and passions are what set you apart. Join or start clubs around your loves. Spend time with people who share your interests. And don’t be afraid to take some fun classes that don’t have anything to do with your major. My favorite while I was at Hamilton: Buffy and the Gothic Tradition, a literature class on how Buffy the Vampire Slayer episodes follow traditional gothic literature tropes.
• Make friends. My most valuable Hamilton experience was gaining the friendships I did. I’m still close with some of those people today. VC is a relationship-driven business. It’s all about people.

What I would have done if I could go back in time:

• Take computer science courses. Actually, I will stress this even more: major in computer science. Programming gives you incredible powers in the tech world. You will become a force to be reckoned with.
• Take Econ classes-particularly microeconomics. This won’t make you a great VC by itself, but it’s a nice foundation to have. I’ve since read several econ books and gotten a lot of accidental on-the-job training.
• Take a basic Finance course. Knowing how to model in Excel and what common finance concepts mean will help you. Again, I think people outside of the venture world looking in put far too much emphasis on finance skills in the job profile, so have a foundation but you don’t need more.

What is the Role and Culture around Women in VC?

It’s an interesting time to be a woman in venture. The #MeToo movement and Harvey Weinstein debacle had far-reaching effects on other industries outside Hollywood, including tech. There’s a palpable feeling that the lack of women in VC (and as CEOs, and founders, and C-suite executives, and in STEM) is unacceptable.

I’ve seen this feeling manifest in several ways. First, there’s a movement underway to hire and promote more women in VC. If you’re an all-male, all-white VC firm in 2019, there’s real pressure and shaming to diversify. Public diversity rankings and targeted journalism are making it harder to hide when you aren’t hiring women or minorities.

Second, female venture groups are taking off. Groups as large and public as All Raise and as small and private as several of us women investors in Boston tech having dinners at each other’s houses every few months are happening everywhere. My own contribution to this movement was to co-found Rev Boston, an annual event/award that honors the top 20 women in Boston tech at the VP/director level of their careers and teaches them how to become angel investors, founders, board members, advisors, and more. Rev is now on its 5th year with 80 members.

Third, there’s a lot left to do. It’s common for me to be the only woman and the youngest person in boardrooms, which is not a comfortable situation. Imposter syndrome is real and it disproportionately affects women. We’re still facing a significant wage gap. There’s still an unfair double standard where a man who says what he thinks is brazen and respectable, whereas a woman who does the same is crazy or a bitch. There are far fewer women engineers, execs, investors, and founders in the tech startup universe than men. And sexual harassment, abuse, and just plain uncomfortable situations are still rampant. I don’t mean to end on a negative note, but despite positive growth for women in tech in the past few years, now is not the time to sit back and relax.