You’ll see lots of articles about getting a job in venture capital with the author (usually someone who’s worked or is working in the industry) telling you how often they’re asked for advice on breaking into industry.
This is different. I’m not a partner in a seed-stage company, nor did I get a job as a partner in a venture capital firm. I am a journalist and this article based on my research and interactions with some people in the industry, shows how to get a venture capital job as an African. The best place to start is at the beginning.
What is venture capital?
All businesses need money to grow, and depending on your type of business and its stage, you may find it difficult to access capital from traditional financial institutions such as banks.
Venture capital, a subset of private equity, provides capital to businesses with enormous growth potential. In return, venture capitalists get a share of the business and the opportunity to contribute to management decisions.
Unlike other financiers, venture capitalists typically invest in companies that they believe will yield outsized returns. As you might expect, these investments are often risky, and most venture capitalists expect around 70% of their investments to fail.
Although venture capital has been a source of business finance since the 1940s, it has only recently become an option for African businesses. Since 2015, venture capital investments in African startups have steadily increased, rising from $185 million in 2015 to around $5 billion in 2021.
What do venture capitalists do?
What venture capitalists do can be categorized into four main roles: finding deals, analyzing potential investments, convincing founders that they are the best investors for their business, and supporting startups after investing. These roles cover the day-to-day activities of venture capitalists, but do not include other elements that go into setting up and running the business.
While these roles cover what investors typically do, not everyone who works at a venture capital firm will be involved. For example, entry-level staff at most companies will be involved in researching deals and researching potential investments.
Senior executives such as senior partners and partners will typically make investment decisions, convince founders, and support them once the investment is complete.
What roles are available in venture capital?
Unlike more established professions, there aren’t too many vacancies in venture capital, especially in Africa, where there are only a handful of local venture capital firms.
Baiyin Zhou, senior partner at Ascent Venture Partners, believes there are as many venture capital positions open in the United States as there are openings for professional athletes. For context, the Bureau of Labor Statistics projects that there will be 3,400 openings per year for professional athletes between 2020 and 2030 in the United States.
The venture capital career path is similar to what you would see at a management consulting firm.
According to Mergers and Inquisitions, the hierarchy of a venture capital firm will look like this: analyst, pre-MBA, post-MBA or senior partner, principal or vice president, partner or junior partner, and senior or general partner .
P:S: Although the hierarchy of mergers and inquisitions is typical, some companies may have different names for these roles.
Education Requirements to Enter Venture Capital
For most people, there is no set path to venture capital. While some enter after leaving their startups, others enter after working in startups, and some enter through the most unlikely places, such as journalism. Michael Arrington and MG Siegler are two examples of former journalists turned venture capitalists.
While this might suggest that anyone can get into venture capital, regardless of their education, certain educational requirements put you in good standing for such jobs.
Venture capitalists in biotechnology, for example, require much more specialized knowledge, and it is common to find venture capitalists with master’s or doctorate degrees in these companies.
More generally, roles determine educational requirements. There are no specific training requirements for analysts who spend most of their time researching and analyzing transactions. However, associates who do more financial analysis should have finance skills.
Tips for finding a job in venture capital
There aren’t too many jobs in the venture capital industry, so there’s always competition for the few that are available. Here are some tips to help you land a job in venture capital.
Help venture capitalists find deals
Few things are as valuable to venture capitalists as consistent deal flow because it ensures they are constantly finding and investing in innovative companies. Helping venture capitalists find and evaluate startups is a surefire way to get noticed and land a job.
Luckily, almost anyone can find deals by tapping into their network. You can also contact venture capitalists who have invested and offer to send them offers. This can be a free or paid service, but the work that will be put into researching these offers will help you learn a few things about how venture capitalists work. With many people building in public, you can use social media to find exciting startups/founders.
Network, network, network
As is common in infant industries, most hiring is through referrals. You are more likely to be recommended by someone for a position at a venture capital firm than to find the opening on LinkedIn. So your network needs to have people who can recommend you for roles or tell you about openings.
For Gideon Dada, Investment Partner at Metis Capital Partners, “The importance of networking, communication and being a person of value cannot be overemphasized in this industry. In most cases, the opportunity is just for one person or two people at most, and the person hiring is not an HR staff and just wants to know what you have done to show your interest in the space.
Build or work in a startup
After investing in a startup, most of a venture capitalist’s job is to nurture portfolio companies and ensure they succeed. Often this would see them helping with hiring, marketing, finance, compliance, sales and dealing with other investors. Therefore, having significant experience in one of these support roles could help you land a job.
A look at some African venture capitalists will show this. Odunayo Eweniyi, co-founder of PiggyVest, is a partner at First Check Africa, a women-focused venture capital firm. Its co-founder, Eloho Omame, was previously managing director of Endeavor Nigeria, where she led efforts to support entrepreneurs. Similarly, Magic Fund Partner Temi Awogboro also led the Evercare Hospital Foundation.
You may have noticed that the three paths mentioned above do not include courses to study, but as we have seen previously, an MBA could help you land a role in venture capital. Higher education could help you secure a venture capital role for more specialized investments like hardware or biotechnology.
Whichever way you choose to get into venture capital, it’s important to remember that there is no one-size-fits-all approach. Some people may land roles right out of school, and others may have to build something before moving on to venture capital.