AMA: I work at a large VC Fund focusing on early stage investments
Hey everyone. Thought I could do an AMA. A bit about me - have 4 years of work experience and graduated from a non engineering college. Was at a startup before (from Series B to Series D) before becoming a VC Personally look at consumer and B2B investments here Happy to answer any questions around life as a junior VC, startup ecosystem, career growth etc.
This is the biggest problem with VC ecosystem 4 yoe kids taking calls on experienced, hardworking founders. Dude first learn the game then invest , judge people playing the game. VCs know nothing about how to run startups. Unless they have been entrepreneurs themselves. IMO It's a colossal waste of talent to become a VC for young PPL.
I feel this is a bad take. There’s no proof that founders make good VCs. These are two different disciplines.
Good disciplined investing is an art most founders don’t even understand
Also if you think age is what matter in making good decisions, you’re just being biased for ‘experience’
You do need to build out teams especially when you are investing/managing a very large capital pool (you can't have just partners running the show)
I do agree with the sentiment that somebody with less work experience could be bad at being able to evaluate. However, ultimately the deal team does include people who have been in the industry for over 10 years (and been successful)
VCs know nothing about how to run startups: Possible (and especially about team building), but most successful partners have not necessarily been founders - they know much better how to deploy funds
Lastly about it being a colossal waste of talent for young people: has been a very rewarding role for most of the people I know. It is a better job that a lot of alternatives I had at that juncture of my career :)
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Second question from me: Is it true that most VCs fail just as lost startups do?
VCs do fail but not as much
Good ones get all the LP dollars constrained with them
The business works in a way that risk gets naturally hedged across startups. So unless you completely fuck up and over index on one space (as John Doerr did with Cleantech) you will end up doing okay if you fund the right spaces and founders
The good ones get really good at identifying the right founder archetype
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Thanks so much for doing this. Do you agree that breaking into VC is very hard for most people?
Yes
It’s a business that only works with small teams
The largest funds have 30-50 people in investment teams at most
They are also very selective (Tier 1 college, Consulting) but that has changed slightly over time
SmugTurnip
Stealth
a year ago
Do you think their hiring approach to these kind of roles will get diverse? Lots of great talent out of Tier 1, Top consulting firms too.
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Is there a nice way to say 'No' to a founder who pitched to you? Most VCs end up ghosting!
How do you make sure you reject the founders in a more humane way?
Have always ensured I don’t ghost (should have a 95%+) success rate
The nicest way I have realized is to just honestly say what the internal view was - the exact reason we are not moving forward
Mature founders will understand and appreciate. Others will argue.
Unfortunately though, a lot of times you write on email and context gets lost
Bot_God
Stealth
a year ago
Salary with time and career?
Just trying to understand the salary bonus and career path
Hey
My first role was at a startup at Series B with 12 LPA
I grew to 20 LPA by the end (after 2 years) before moving to the VC fund where I now make ~55 LPA (VCs have a standard pay, so my previous pay didn't deter them from that)
donna
Stealth
a year ago
How can someone with a shitty college & shitty commerce degree get placed at VC firms? I’ve heard they mostly hire folks who have done Tier-1 MBA. What’s your advice?
I came from a non target college (but still considered Tier 1 in arts and commerce degrees). I think the way to do it is to be a great operator and have excellent recommendations when you apply. I also read up a lot about startups always, and that helped me give good answers when I got to the inteview.
Bakwasmaal
Stealth
a year ago
Shitty commerce degree? Maybe your are overthinking being indexed! The key to making something happen is persevering with incremental steps.. then it wouldn’t appear as steep a climb. Remember Byju’s - Mr Raveendran is not an MBA himself yet his claim to fame (and money) is cracking India’s toughest MBA entrance exam!
55L for sure, and upto 65L basis how my performance bonus looks
Note: there is no carry component at my level; it starts after you get into a track role
Nice! Can you tell me what you studied? And how you made your way into this role?
I wanted to know what the process looks like from a VC firm talking to a founder for the first time to actually giving money to the founder (if decided to fund)?
It would be great if you could share 1-2 lines about each step.
1) Get connected: We end up reaching out proactively more often than founders write to us/cold email us
2) Meeting 1: Typically with an analyst/associate like me. 45 min - 1 hour call where I would try to gauge if this is exciting basis (Unique insights, thesis, execution thus far, etc.)
3) Internal debrief: Tell the VP and partner what my judgement is. Post that, they will join in the second meeting.
4) Evaluate: Post the second meet, if we are excited, I would do the grunt work of doing primary work (speak with users if they exist, or speak with potential users, or get reference checks). Also a lot of secondary (Market Size, Competitors, Strengths etc.)
5) If everything looks positive, the team pitches to all partners (or multiple) - this is called the IC (investment committee).
6) If the IC goes well, a Term Sheet is offered
Thanks a lot for answering this in such detail!
Can you also share some of the common contracts that VC has with the startup with regards to funding? Like I have heard in bigger rounds, the entire money is not given to the founders at once. It's based on certain targets and metrics.
Can you share some more like this?
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When I'm in office; 10-6 pm is mostly meetings; end up meeting 3-4 new teams and a few catch ups with existing teams that we are excited to continue monitoring.
Post 6 pm is when I get time to: do primary/secondary research on a team we are evaluating, or otherwise building thesis and reading up.
Also a lot of time goes on replying to emails/LinkedIn messages etc.
@WittyFeed thanks for doing this
1. How's the wlb? Do you end up working more than consultants (MBB)?
2. Have you ever done FOMO investments? What happens if a founder pitching to you is sitting on a termsheet? What tricks do you use to convince a founder to take your termsheet?
Np
1. Work life balance: Not so good. During the bull market, it was quite bad. 12 hour work days consistently, mostly 6 days a week. Then when the markets went down it rationalised a little bit. Vs. consultants: I think Consultants adjust very easily to the role in terms of hard work, so not worse. It's just that as a VC you are more in control of your time, and aren't pushed by someone else, it's your own responsibility
2. FOMO investment: Yes, not personally (or so I would think), but there were many that happened in 2021. Tricks to convince founder: get them to speak with our founders, sell on what being funded by us means, try to work together with the other fund etc. etc.; but avoid making the terms too much better, that will hurt in the next round
QuickMarsh95
Student
a year ago
Hi, thanks for the AMA..
1. What happens if the startup doesn't perform upto the expectations? Are you answerable in that case?
2. Does background of the founder count ? like tier 1 grad and all stuff
1. There is definitely regular portfolio reviews and if things don't pan out, they end up being learnings for the future. But it's known that a significant % of your startups won't work out, so it's not an anomaly
2. It helps with getting meetings with VCs, it does not matter after that. I have met over 600-700 founders who come from IIT/IIMs and have had to reject them
DixonButts
Stealth
a year ago
Just happy to see that you got solid operator experience before making the switch. I'm 21 and it feels disappointing that the only VC's I can speak/pitch to are 23 and know as much as I do.
I would be lying if I said I know a lot. I think they trust me with being smart and being able to think with first principles.
But I don't think I should be giving unsolicited advice to founders. Only things that I now know because I have seen multiple startups in a particular area, otherwise its gibberish
CodeBetter69
Student
a year ago
Do agriculture startups has future?
Not the trading businesses, too many of them at a large scale where value is still questioned. Hear that some of the large ones are still at abysmal unit economics (at a gross margin level even)
But if people specialize in certain commodities, or are able to somehow build a real network at least connecting large farmers/traders with buyers: may be it could work out
That is at least the view I have heard internally
ThisRetailer
Stealth
a year ago
@WittyFeed how is animall doing?
hellotherehappy
Stealth
a year ago
Do you feel there is an excess of VCs now? A case of too much money chasing too little opportunities/talent.
VCs need to generate market beating returns but do you believe the current major themes in India right now have justified the investing business model? Especially considering a lot of LPs are startup folk who lucked with espos from unprofitable startups or from family offices that hardly understand technology.
@happyheretic I definitely think so. So many new funds got created in the last few years, not very sure what will happen of them. I think the large funds should continue if they play and deploy right, but a lot of micro VCs may find it tougher
Most of the LPs are actually endowment funds/universities/pension funds etc.
There is a lot of fundamental thinking that goes into future planning, although it rests mostly with the partners and senior folks, and I'm hoping they are thinking right (as they have in the past)
donna
Stealth
a year ago
What was your first Job? How did you get placed?
First job was at a startup as a generalist (role was not too different from founder's office/EIR)
I got it through campus placements itself
AGI
Stealth
a year ago
1. A lot of VC have thesis, do you form your thesis first and then try and look for a company operating in that space or you evaluate the business case for all startups?
2. How much time you spend at the very least to research about the company, founders, and market?
3. Top 5 points which take into consideration while making an investment decision?
1. Yes, we do build theses actively, and are more keen to meet teams that fall within those theses. But also very well aware that we'll probably miss the biggest startups with that approach, have to be open to new ideas. So most startups we evaluate, they might fall outside existing theses
2. It's a short cycle - typically 1-2 weeks to do all the work we can because otherwise we may lose a deal. So it's more #hours in those 1-2 weeks and deprioritizing other things
3. Team and their unique insights, size (potential) of the problem, why the solution is better than existing ones, signs of superior early execution
Hey, I’m 22, a SWE, I earn decent. How do I become crazy rich, sounds stupid but yeah
I'm also figuring out :p
I think the answer lies in building something profitable/big yourself or joining an early stage startup that becomes big over time
Everybody who was under employee no. 50 at one of the unicorns did make money.
Hey! Thanks for doing this!
- could you share your salary progression over the years? which role did you do in the startup before transferring to vc?
- what is the most important thing you'd say to someone starting their career rn?
- do you think most of the skills young ppl have in the vc, consulting world are superficial and not comparable to tech folks?
- when did you decide to switch and how did you get your current company, as you still were early career
1) 12 LPA as a generalist at a startup (mainly 0 to 1 execution on new projects). Grew to 20 LPA there. And then joined the VC fund (55 now)
2) At the outset of career: answered this in another question - but getting into the right space is by far the best idea. If I was graduating today, knowing what I know now, I would probably join a SaaS startup at an early stage.
3) Biased answer, but I do feel we have our own skill sets. It's very generic sounding: but the best ones are extremely good at finally answers owing to first principles thinking (which I now have realized most of the people lack)
4) I already had 2 YOE at that point, which is normal to become an analyst/associate. I cold emailed a bunch of funds, and ended up cracking the role
Thanks for this! Awesome stuff man. Great trajectory right from the get go.
I'm starting my career in product adoption/mktg in a fairly old (it has had an ipo) saas company. Do you think it will help me or should I keep looking for other roles if vc/pm is the trajectory I want to follow?
donna
Stealth
a year ago
Your career advice for fresh college graduates?
Getting into the right space is very important
I was lucky to start into startups despite being in a college where most roles were Big 4 etc.
If you are part of a fast growing industry, you will naturally grow with it.
The other thing is just being excited about what you do - didn't want to do a role because it would help me with an MBA. I just really wanted to do all of them, and that ensure I did them with good energy.
@WittyFeed so if I were to start off in big 4, will getting into vc be difficult?
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@WittyFeed thanks for doing this man! I have consulting, VC and startup experience, am now freelancing with startups as I look for VC roles.
Would you know who all are hiring at this point?
Happy to ping on a separate platform to maintain anonymity.
Hey
This list might be helpful bit.ly/knowledgecapital
Even for the ones not available here just reach out to VPs at funds you are interested in. I randomly coke emailed and that’s how my interviews got set up
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