AMA: I work at a large VC Fund focusing on early stage investments

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 :)

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

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

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.

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

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)

What do you think the progression is like from here?

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?

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.

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?

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

How is 12 hour work day a bad work life balance? Seems pretty okay.

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.