Venture capital is an exciting career option for MBA students. The London start-up scene is fast-growing, and many MBAs contribute to both start-ups and VCs in meaningful ways during their time at London Business School. The school’s Strategy and Entrepreneurship concentration and courses allow us the chance to practice some of the key things we’d have to do at a VC or as an entrepreneur, and gives us the opportunity to make mistakes before we have to do it for real.
For the past five weeks, my classmates and I have been studying how to finance an entrepreneurial business in the “Financing the Entrepreneurial Business” elective at LBS. I’ve learned from many friends and classmates who have founded start-ups that this can be one of the most daunting challenges for aspiring entrepreneurs. We studied various financing options available to entrepreneurs and the ecosystems behind those options. Notably, we focused on venture capital. Professors Luisa Alemany and Gary Dushnitsky shared many insightful case studies, term sheets and guest speakers with the class to give us a sense of how VCs evaluate start-ups and how start-ups evaluate VCs. Both perspectives are critically important to any career in entrepreneurship – either on the VC side or founder side!
The course culminated in a panel of LBS alumni who have forged successful careers in VC (and all of whom took this class during their time at LBS!). They shared their advice on how to break into VC.
I’ve noted their top five tips below, and hope they’re helpful for present and future business school students looking at VC careers
1. Gain expertise in a specific area.
“When it comes to sector-focused VCs, this becomes a key factor” remarked Varun from Accel who interned at a VC firm between the first and second year of the MBA while at LBS. ”You need to understand a particular space really well in order to have a view on how things will change or what a future could look like” he adds. For more sector-agnostic VCs, a lot more is based on fit, your network and research.
2. Find an edge.
Any VC you speak to is always looking for the next big thing. If you can help the VC get access to interesting people and have these people in your network means you can add to deal flow. This can be achieved in several ways, for example writing a blog, hosting a podcast or YouTube channel. “Find a sector that interests you and go really deep” Varun advises.
3. Join a start-up.
Neha, another LBS Alumni, started her career as a medical doctor before joining a start-up and later the VC firm Joyance Partners. “I can’t emphasize enough that expertise as an operator” she tells the class. Rezso from Illuminate Financial agrees. “If you don’t have a strong edge or expertise, then start working with a start-up”.
4. Get involved in the ecosystem.
“Learning what is happening and building your network is very important” Ankit from LevNet Ventures advises (LevNet = leverage networks). If you know enough people in venture, then you might be directed to an opening. VC hiring is known to be notoriously unstructured.
5. Be prepared to work hard.
“It is great fun, but it is hard work” says Neha. Be prepared to roll your sleeves up and work hard because at the end of the day you need to generate returns for the investors of the fund. “It’s not as glamorous as it looks” she concludes.
With special thanks to Luisa and Gary for running the course and the panellists Varun Purandare (Accel), Ankit Srivastava (Levnet Ventures), Rezso Szabo (Illuminate Financial), Neha Tanna (Social Starts / Joyance).
About the author: Chloe is an MBA2021 candidate at London Business School with a passion for entrepreneurship, technology and working with founders to scale-up. Her previous industry experience includes investing in UK companies at the EBRD.