You’ll see many articles about getting a venture capital job start with the author (usually someone who has worked or is working in the industry) telling you how frequently they get asked for tips to break into the industry.
This is different. I’m not a partner at a seed stage firm, nor did I just get a job as an associate at a venture capital firm. I’m a journalist and this article based on my research and interactions with some people in the industry, shows how to get a job in venture capital 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 what stage it’s at, you might struggle to access capital from traditional financial institutions such as banks.
Venture capital, a subset of private equity, provides capital for businesses with tremendous growth potential. In return, the venture capitalists get a part of the business and an opportunity to contribute to management decisions.
Unlike other financiers, venture capitalists typically invest in companies that they believe will yield outsized returns. Expectedly, 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 financing since the 1940s, it has only recently become an option for African businesses. Since 2015, venture capital investment in African startups has consistently increased, from $185 million in 2015 to approximately $5 billion in 2021.
What do venture capitalists do?
What venture capitalists do can be classified into four major roles: sourcing deals, analysing potential investments, convincing founders that they are the best investors for their business, and supporting the startups after investing. These roles cover the day-to-day activities of venture capitalists but do not include other things that go into setting up and running the firm.
While these roles cover what investors typically do, not everyone working in a venture capital firm will be involved in all of them. For example, entry-level staff at most firms will be involved in deal sourcing and researching potential investments.
Senior staff such as Senior Associates and Partners will typically make investment decisions, convince founders, and support them after an investment has been completed.
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What roles are available in venture capital?
Unlike more established professions, there are not too many open roles in venture capital, moreso in Africa, where there is only a handful of local venture capital firms.
Baiyin Zhou, a Senior Associate at Ascent Venture Partners, reckons there are as many open venture capital roles 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 annually for professional athletes between 2020 and 2030 in the U.S.
The venture capital career path is similar to what you would see at a management consulting firm.
According to Mergers and Inquisitions, the hierarchy in a venture capital firm will look like this: Analyst, Pre-MBA Associate, Post-MBA or Senior Associate, Principal or VP, Partner or Junior Partner, and Senior Partner or General Partner.
P:S: While Mergers and Inquisitions’ hierarchy is typical, some firms may have different names for these roles.
Educational requirements for getting into venture capital
For most people, there are no defined paths to venture capital. While some get in after exiting their startups, others get in after working at startups, and some get in through the most unlikely places, such as journalism. Michael Arrington and M.G. Siegler are two examples of former journalists turned venture capitalists.
While this may suggest that anyone can get into venture capital regardless of education, certain educational requirements put you in good standing for such jobs.
Biotechnology venture capitalists, for example, need a lot more specialised knowledge, and it is common to find venture capitalists with masters or PhDs at such firms.
More generally, roles determine educational requirements. There are no specific educational requirements for analysts who spend most of their time sourcing and analysing deals. However, associates who do more financial analysis would be required to have some finance skills.
Tips for getting a job in venture capital
There aren’t too many jobs in the venture capital industry, so there is still competition for the few that are available. Here are some tips to help you land a job in venture capital.
Help venture capitalists source deals
Few things are as valuable to venture capitalists as consistent deal flow because it ensures that they constantly find and invest in innovative companies. Helping venture capitalists find and evaluate startups is a sure way to get on their radar and land a job.
Fortunately, almost anyone can source deals by tapping into their network. You can also reach out to venture capitalists who have invested and offer to send deals their way. This can be a free or paid service, but the work that will go into sourcing these deals will help you learn some 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 nascent industries, most hires are done via recommendations. You’re more likely to have someone recommend you for a role at a venture capital firm than discover the opening on LinkedIn. So, your network must have people who can recommend you for roles or inform you of openings.
For Gideon Dada, Investment Associate at Metis Capital Partners, “The importance of networking and reaching out and being a person of value can’t be overemphasised in this business. In most cases, the opportunity is just for one person or two people at a maximum, and the person that is recruiting is not an HR personnel 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 work revolves around nurturing portfolio companies and ensuring they do well. Often, this would see them help in hiring, marketing, finance, compliance, sales, and connections to other investors. Therefore, having significant experience in any of these support roles could help you get 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. Her Co-founder, Eloho Omame, was previously the Managing Director at Endeavour Nigeria, where she led efforts to support entrepreneurs. Similarly, Temi Awogboro, a Partner at Magic Fund, also led the founding of Evercare Hospital.
Conclusion
You may have noticed that the three paths mentioned above did not include what courses to study, but as we saw earlier, an MBA could help you land a role in venture capital. Higher education could help you get a venture capital role for more specialised investments like hardware or biotech.
Regardless of how 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 straight out of school, and others may have to build something before transitioning to venture capital.
