Are you cut out for an early-stage VC firm in India? Here’s a checklist

Way forward.
Way forward.
Image: REUTERS/Yuya Shino
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This post was originally published on Quora as an answer to the question “How do I get started as an analyst, associate, or researcher at a VC firm?”

I worked at Ankur Capital, an early-stage venture capital (VC) fund for over 2.5 years. During this period, I have had many hour-long phone calls with candidates who are interested in joining an early-stage fund. Over time, I noticed how similar each of these conversations were and thought I should organise them.

Here are my thoughts from my experiences of the early-stage VC funds:

The case for having a strong “why”

When I was a fellow at Teach For India, there was a great emphasis on “why we do what we do.” When the “why” for doing something is poorly thought, the road ahead becomes very challenging. Conversely, when the “why” is clear and strong, there is a higher chance that the results are far more rewarding.

Engrained since then, my conversations always begin by asking the motivations behind their interest in joining an early-stage fund. I have divided the responses into the following:

The weak reasons

  • I like finance, did my CFA (Chartered Financial Analyst programme) and believe I can build a career as a strong finance professional

Kudos to you for clearing a really tough exam. While working on investment deals you definitely use a lot of excel and financial modelling. However, in my experience, the day-to-day work is not so excel-sheet-heavy but “people” heavy. To use your CFA skills to the fullest, working in asset management or in mergers and acquisitions at a large investment bank may be a better option for you. There is no significant advantage of your profile versus a non-CFA candidate for a role in an early-stage fund. Having analytical and people skills play a much larger role.

  • For joining impact funds: I like the idea of social impact and business and I always wanted to contribute to the society

If social impact is very important to you, you could consider joining a non-profit that will allow you to create the change on the ground. Joining a social impact fund may not be the way to satisfy your desire to contribute.

At Ankur, I engaged with entrepreneurs who are using technology for solving pressing problems. However, as an associate, you are still a number of steps away from the actual change created on the ground. Although you may play a role in sourcing a solid technology company with societal implications. At the end of the day, your craving for contribution may not be satisfied.

Also, it is absolutely false to think that getting a job at an impact fund is easier than a mainstream VC. As one of the conversations went, the candidate told me that impact funds get fewer applications than mainstream guys. This cannot be farther from the truth. And, someone who has genuine experience in the social field will be strongly considered for the role than someone who is claiming to have an interest in social impact.

  • I believe this will help me in getting into a top MBA school.

Many believe that VC is a pre-MBA role but I highly doubt business schools have a special category reserved for VC associates from India. Similar to other fields, there are exceptional individuals working even in this industry and when they get admitted to business schools it is not because of their VC experience alone. This would be an erroneous correlation and approaching a VC fund with that approach will just lead to a poor experience. In fact, I will go one step further and say, if post your VC stint in India, you aim to get an MBA degree to work for a fund in the US, you will likely get rejected. Its simply because VCs in the Silicon Valley don’t hire that often and even if they do, they will go with a native who has far more context than you. This post-MBA goal may not be a strong enough case for your application either.

  • I worked at a consulting firm and I think I will be able to advise startup founders with strategy and planning.

For a startup founder, the company is his/her child. Although your fund is sponsoring the upbringing of the child, he/she is not going to listen to you—an associate who has zero parenting skills. Unless of course you have built and sold a company of your own or have been the CEO of a large company. At most, you could help companies with their strategic business development activities and recruitment. The General Partners are the ones who have some say in how the company is run. But generally speaking, unlike private equity funds, the early-stage VC fund’s influence is limited until the next round of funding.

  • My long-term goal is to become a principal or a partner in the next five years

In my experience, this may not be a realistic trajectory. It’s not because the funds don’t want you to continue. Partners at Ankur had always been very encouraging about a good career trajectory to grow in the fund. However, most associates will either join a startup or become entrepreneurs—it’s easy to get bitten by the entrepreneurial bug. This is an extension of the earlier point: to advance to a principal advising portfolio companies, some experience is most valued. If neither of these two career paths appeals to you and you don’t have plans for further studies, then you may find yourself stuck post two or three years. Also if you are serious about being a career VC, start investing in deals today with angel groups.

The strong reasons

  • I love entrepreneurship and I want to start my own business one day

That is strong and relevant. As the saying goes: “Who you spend time with, is who you become.”

There is no better job that will give you face time with so many diverse entrepreneurs. What is awesome is that you get to follow their journey and see how it’s done. Of course, there is no comparison to actually getting your hands dirty by joining a startup. Having said that, you are still very close to the realities of business and develop a mature understanding of how things need to be done when you startup.

  • “I am a great people person and I thrive on constantly engaging with folks who are far more experienced and intelligent than me.”

This is a brilliant “why.” This is not a desk job by any means. You will meet the really experienced and intelligent people from various backgrounds at the job. Apart from the fund’s portfolio companies, you will engage with experts and experienced professionals across sectors. It is not unusual that you are speaking to a former scientist from the Indian Space Research Organisation (ISRO) in the morning and you end your day by speaking with a dairy farmer who has recently adopted your portfolio company’s product.

  • I am good at networking, at making connections, and I could enjoy sales too.

The role of an associate is very similar to that of a sales/business development. You will be traveling all year round for meetings and events. The entrepreneurs are pitching their startups but you are also pitching your fund, which does require to be articulate, genuine and confident. If you already have strong people skills you will be an asset to any early-stage fund.

  • I am curious about how things work and would love to learn about any topic

When I was at Ernst & Young doing my CA Articleship, I would be assigned to one project for lengthened periods of time. On the other hand at a fund which focuses on multiple sectors, you are forced to read, grasp, and reproduce even as you work on multiple deals. This has to be a genuine part of your personality and not just stem from some motivation that will soon lose steam.

No matter how smart you may be, there is no way you will know everything about your entire sector when you are starting off. Being curious and having this deep joy to learn about different things is imperative for you to succeed in your role.

  • I believe in India’s digital story and want to play a part in it

By 2023, India will have 1.3 billion (mobile + desktop) internet users out of which there will be 776 million shoppers. With cheaper smartphones and first-time internet consumers, such numbers are nowhere to be seen in the world. I am yet to hear anyone interested in venture capital job speak about this. This is a solid “why” if you want to work in venture capital followed by entrepreneurship. Great minds are at work building solutions for India and this industry gets to partake in these innovations as they are born.