Considering pursuing a career in the finance industry as a venture capitalist? This interview will take you through the ups and downs you can expect, what it takes to land the job, what you can expect to earn and more. This is a true career story as told to Diversity Jobs (http://diversityjobs.com), the leading site for job postings directed towards professionals of diverse backgrounds.
I am a partner at a venture capital firm and have been in this line of work for twelve years. We focus mainly on tech start-up companies, though we are not limited to that. Primarily, I help do financial analysis of potential start-up companies and decide how to allocate money and investments. This means I sit down and look at the financials of each company and, more importantly, whether they have a truly valuable idea and whether financing them is in the best interest of our company. I think there is a misunderstanding about what venture capitalists do in the sense that we are seen as predatory lenders focused on profit, profit, profit. While profitability is crucial, we support interesting ideas and social causes as well.
If I had to rate my job satisfaction on a scale of one to ten, my job is easily an eight. I thoroughly enjoy the process of speaking to clients, being surrounded by new ideas every day, and helping make these ideas a reality. No job is perfect, and anything that involves lots of money being moved around has potential to be stressful. Nonetheless, I would not trade my job for any other. The parts of the job that really motivate me to get up in the morning is all of the work we do with charitable organizations or start-ups that are focused on new technologies that have potential to help society. I cannot name names, but some of these companies work on renewable energy technology or healthcare technology and are led by focused, inspiring individuals. This is by far my favorite part of the job.
I got started in this line of work through the help of a friend that I went to college with. After completing my MBA I had been working for a small financial firm doing work that I was fairly disinterested in and was talking to a friend about it. He recommended me to some venture capitalist firms that operated with a lot of the mindset and philosophy that I enjoy, and it's been working well ever since.
One of the most important lessons I have learned from working in this field is that trust is crucial to everything you do. Being honest with yourself, your business partners, and your clients is essential. You also have to assume honesty on the parts of others in order to work with them, but you also need to accept that they might not be honest. "Trust but verify" is excellent advice in all areas of life, but particularly in the field of venture capital. This lesson was learned the hard way; it required a business deal going badly and losing a lot of money, but the mistake has never been repeated.
The most common challenges I encounter tend to revolve around the period after you have crunched the numbers on an idea and basically have to go on your instinct. At some point, the math stops mattering as much and you have to decide, based on past experience and your gut feeling, whether something is a good investment or not. This can be tough to learn. I am not one hundred percent sure that I have learned it all the way yet, but it gets better with time.
No matter how challenging, the reward of succeeding with an idea more than balances out all of the potential downside. Fortunately, this stress rarely interferes with my life outside of work. I am able to comfortably balance my personal life and my work life. One advantage of the field is that I can do much of my work from a laptop and cell phone so that I can spend time at home with my family and still get work done. Considering the sometimes long hours of this work, not having to be in an office all week long is very, very nice.
Salary is difficult to judge in this field because much compensation comes from the profits of successful companies. Someone working at a similar firm doing similar work would likely have a base salary of between $120,000 and $180,000. In addition, bonuses paid based on the success of companies, and profits for a year can range from $100,000 to more than $1,000,000 depending on the firm and, most importantly, the success of companies that you have invested in.
Needless to say, this compensation is very generous and I am very satisfied with my quality of living. Some of the trade-offs of this position is that I do not get a lot of time off from the job, but considering that I can travel practically anywhere and still do my work means that a lot of vacation time is not necessary.
To someone looking at this field, I would recommend shooting for a top business school for your MBA. This education is important by itself, but even more important, you make the kind of contacts that lead to you being able to find this level of job, which can be difficult to obtain without knowing someone.