With a thriving economy for startup firms, many people are looking into the various ways to become a venture capitalist and invest in the “next big thing” to hit the market. This is not as easy as many might hope, however. There are a relatively small number of venture capital firms in the United States, and they tend to hire very conservatively in order to maximize their profitability and the ease with which they can invest in some of the country’s most attractive startup companies. This is a job that requires a great deal of education, as one would expect, but also an extensive professional network and perhaps a bit of experience being funded by a venture capital firm in some form. With the right educational and professional experiences, getting into one of the nation’s top venture capital firms will be just a touch easier for most people.
Start by Getting the Proper Education for Venture Capital Firms
The first thing to consider is the education required by most venture capital firms when they’re reviewing resumes for a rare open position. These firms focus not only on how highly educated an applicant is, but also the “pedigree” of their college degrees. In essence, the most successful candidates will be graduates of the top business programs in the world. This includes the Ivy League schools in the United States as well as so-called “Public Ivy” schools and international institutions with great prestige. These degrees are appreciated not only for their overall prestige and rigorous coursework, but also for their networking potential and the ability of a connected grad to bring more business or insight to the firm upon being hired.
With prestige covered, candidates will need to make sure that they’ve chosen the right majors and pursued at least a graduate-level degree. Acceptable degrees include business management, business administration, finance, and accounting, at least at the undergraduate level. For graduate programs, aspiring venture capitalists will want to choose a prestigious MBA program or a Master of Science in Finance program at a top-ranked American or international university. Because venture capital firms deal extensively with financing businesses and accounting for their growth, these programs represent the best combination of coursework to produce an informed investor who knows how to hold companies accountable and produce a healthy return.
Networking: How to Find the Way In
Venture capital firms are notoriously private and hard to crack, but that doesn’t mean it’s an impossible egg to crack. Generally, experts who advise aspiring venture capitalists urge them to create a broad professional network with at least a few connections at the largest venture capital firms in the world. These connections serve a few purposes, but the biggest one is simply having a way to be considered for a position at that firm. Existing venture capital members also serve as valuable personal and professional references during the hiring process, even if applicants aren’t applying to their specific firm. Another way into venture capital is to be part of a startup that previously participated in venture capital funding. Knowledge of the process, and success in that small business venture, creates a significant competitive advantage.
Related Resource: Hedge Fund
A Great Opportunity, But Tough to Find
Venture capital firms are small and rarely have an opening, but that doesn’t mean it’s impossible to find a job investing in startup companies. According to Forbes, business professionals who want to become a venture capitalist should start with a prestigious set of degrees and a broad professional network, maximizing their chances of being noticed and eventually hired at one of these firms.
