You want to work in Venture Capital. What’s the best way to answer the question of why? (2024)

Many candidates we interview try to explain a transition into venture capital with a logical career progression. The challenge with that is that it’s hard to stand out and venture is all about standing out. A more effective approach is to start with the end: venture capital is about generating outsized returns by investing in talented entrepreneurs. So show your motivation to generate outsized returns, and your motivation to find and support talented entrepreneurs.

If you don´t know why don´t try to get in. This is not about having the right answer. There is no right answer. Venture Capital is a very specific and demanding job. If you don´t know why then why are you applying in the first place? I know why I wanted to be in Venture capital but this may not apply to you. I wanted to be at the forefront of technology, meet with great visionary tech leaders, do a bit of finance, a ton of networking, some strategy and a learn a lot of different things. I was also attracted to the deal making aspect of it. Today, I am looking for even bigger deals, bigger exits, bigger funds. This keeps me motivated to think that we are growing and building something with a right to exist in this very competitive world.

Having worked in P.E space, if you want to demonstrate your value in the venture capital industry, it's essential to present a holistic picture of your capabilities. Having learnt from my mistakes - Start by developing a robust investment thesis that reflects your deep understanding of market dynamics & potential opportunities. Then, focus on actively sourcing high-quality deal flow through networking - industry engagement. During the due diligence process, showcase your ability to conduct thorough analyses and identify key factors for success in potential investments. Highlight your track record, to illustrate your ability to spot promising ventures. Emphasize your capacity to provide value beyond capital by offering strategic guidance.

The most important task at a venture capital firm is determining which potential investments can provide the most long-term value. While you can use a variety of methods to estimate an investment's potential return. align your analysis with the firm's investment thesis, and remember that communication skills and critical thinking are as important as quantitative analysis. by describing your general methods of valuing companies and emphasizing that you always aim for the best possible deal. keep an open mind, and demonstrate your ability to think like a VC.

In my organization, candidates demonstrating in depth knowledge and understanding in a niche segment with an ability to project most probable trends in the future based on their in depth knowledge is a preferred trait. Candidates network of stakeholders in that segment and demonstrating an ability to identify inflection points and disruptors in that segment is also appreciated.

VCs are helping founders invent the future. Key traits of an effective VC are enthusiasm and curiosity about what can be accomplished. Willingness to consider new problems, solutions, and markets is essential.

Cultural fit is critical in VC, as firms often have a strong culture and shared values. it's important to ensure that the firm's culture aligns with your own values and working style. This will help ensure a positive and productive work environment. It’s very important to have a clear understanding of your unique value proposition and what you bring to the table. Consider your skills, experience, and accomplishments, and how they align with the needs of the firm. Use this information to craft a compelling answer to why you are the right candidate, and why you deserve this job.

Discuss how you see yourself evolving within the industry, whether it's advancing to more senior roles within a VC firm, launching your own fund, or transitioning to entrepreneurship based on the insights and networks gained through VC experience.

Every time someone asks me how they can get into venture capital, I always so “you shouldn’t”. Not because I am being condescending, but rather because the best route is being a founder first. Starting your career in VC will normally limit your ability to move to adjacent careers if you get fed up or things aren’t going well. Taking 2+ years in an operating/product role makes you more well rounded professional, a better VC, and will hedge your career risk.

Here's a great reason NOT to get involved in Venture Capital - you want to 'change the world'.VC investors do NOT change the world. Great founders do. Go build a company if that's your goal. Do NOT do VC.

I think the answer to “why” enter VC is different for everyone but I’ve seen over the years folks think VC is just networking, searching for deals and going to happy hours. I’d recommend first understanding how a VC fund makes money, the timeline of a fund, how deals are done and decisions are made. Then ask yourself if you want to be in VC and if you’re ready for the long game. Getting into VC isn’t the be all, succeeding in VC is the challenge and that requires a lot more than just networking. For me, I was always super curious, loved everything techie and wanted to be impactful. VC is a great way to combine multidisciplinary talents, feed that curiosity and bring substantial returns (over time).

The one thing we always look for in a candidate is what I call "demonstrable passion for venture". In my opinion, this trumps most paper credentials. What have you done in your past, that really demonstrates venture is something that you are interested in, and attracted to? There is no right and wrong answer, but actions speak louder than words.

I think what needs to be addressed is the lack of diversity in VC. As agreed by the UK government, more needed to be done to improve gender and ethnic diversity within the UK’s venture capital ecosystem. Just two per cent of funding goes to all-female founded businesses. So the big question is for VC to answer a what will they do improve the ratios, attract and develop diverse VC talent.