VC at a very young age

I am just curious. How are people becoming a VC or a partner at a Vc firm at very young age? Some of them are not even 25. Where is money coming from??

Isaiah Olive

Stealth

a year ago

I've generally seen three cases. 1) Generational wealth so running family offices for a couple years and then buying into a partnership 2) they perform well at micro VCs and lot of college level funds and then start their own micro fund like 5-5 mil types 3) Build a successful startup and that can get you to a large fund as well

Kendall Vernon

Stealth

a year ago

Can you elaborate on point 2? 5-5 mil is not a small amount at young age. Also, what amount do you consider as a micro? How long does it take make a some profit out of a micro investment. What I understand Generally investing is for a long term, so how do they make a money in a short span. I am very noob at these things so asking lot of questions 🙂

Jordon Olive

Stealth

a year ago

They don't really make much money initially because first time GPs can't ask for a lot of management fees and lot of it is spent on marketing themselves. Also 5-10 mil isn't a big amount in VC context. You won't be able to lead anything other than seed rounds and given that you want to leverage your pro - rata investment in subsequent rounds you kinda only end up investing about a third of it. So i guess max 40 deals. They can however make money by establishing deal flow for larger funds, putting their own money in these deals and taking small exits along the way. It's like you give a little money to someone to see what they can achieve with it, prep them and take them to a larger VC. In that sense you can expect some returns but I guess they should focus on re-deploying that capital to build a good portfolio first.

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