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Understanding the Venture Capital Industry

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Overview of the VC industry and careers/jobs available with venture capital firms.

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Understanding the Venture Capital Industry

  1. 1. Understanding the Venture Capital Industry © Copyright Job Search Digest
  2. 2. Venture Capital Industry Overview • Industry reaches beyond internet start-ups • Venture capital (VC) firms invest in fast growing industries – ranging from alternative energy to social networking communities • Tremendous opportunity for jobs in venture capital© Copyright Job Search Digest
  3. 3. Venture Capital Business Model• Invest in companies too risky for standard debt-issue – E.g. start-ups due to short history • Creates highly entrepreneurial atmosphere – Balance risk-to-reward ratio • Expect large pay-offs for risk – Exit strategy is primary concern • IPO • Acquisition© Copyright Job Search Digest
  4. 4. Produce Real Value/Revenues • Less money available to new ventures – More difficult to access than in the past • Venture capital (VC) will continue to flow to tech companies that prove working model • Fewer IPOs • Exit strategies based on acquisition by an established industry player – Buy vs. build approach© Copyright Job Search Digest
  5. 5. VC Job Opportunities• Ample & lucrative • VC firms are small for those with – Specific roles to fill drive & business – Typically for a intelligence particular industry• Generally found • Those with domain via professional or expertise have an personal network advantage© Copyright Job Search Digest
  6. 6. Careers in Venture Capital • Involve selection of portfolio companies, investment of funds, product launch, growth management • Partner will oversee the management of many companies – Active participation, often with seat on BOD – Assist with successful product/service launch – Position for long term profitable growth© Copyright Job Search Digest
  7. 7. Considering a VC Job • Do significant due diligence – Compensation plan – Past fund performance – Political environment within firm • Long hours, with challenging work • Work environment • Firm culture© Copyright Job Search Digest
  8. 8. A Look into VC Firm Structure • Funding for VC activities made by investors, referred to as limited partners – Wealthy individuals – Financial institutions e.g. insurance companies, banks, pension funds • Investors have little or nothing to do with daily operations – Serve mainly as funding source© Copyright Job Search Digest
  9. 9. Roles at VC Firm • General partners bridge gap between funding partners & vested companies – Have extensive business experience, typically as senior execs in financial institution or industry corporation • Roles supporting general partners – Many VC jobs available for savvy, intelligent business-minded individuals© Copyright Job Search Digest
  10. 10. Challenges in the VC Model • Presentation by Adeo Ressie, founder of The Funded.com – VC business model is breaking down • Theory: more money flowing into VC firms than is being generated by their investments – Creating negative balance on economy – Contradicts VC industry: VC creates stock market growth & job creation© Copyright Job Search Digest
  11. 11. Thoughts Supporting Theory • Too many investors put too much money into Silicon Valley – Too few deals to support it – Valuations driven up to unreasonable levels • Larger companies (Yahoo, Microsoft, Google, Cisco) buying start-ups earlier in life cycle – Keeps start-ups from becoming large, future competition • Greed by some VCs – Tempted to raise larger pools of money because of fees earned on funds© Copyright Job Search Digest
  12. 12. Thank You Visit JobSearchDigest.com for more information © Copyright Job Search DigestImages used with permission from Microsoft

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