TBC: Understanding VC Firms to Send the Right Signals

By Jason Yeh
April 18, 2024
Listen on Apple Podcasts

In this episode of The Backchannel, host Jason Yeh delves into the world of junior VCs and their path to becoming venture capitalists.

Drawing from his own experience at Greycroft and the hiring processes, he emphasizes the significance of technical backgrounds, industry connections, and experience in fields like consulting or banking.

Venture capital firms prioritize hiring from networks with access to potential deals and founders, highlighting the importance of networking in this industry.

Ultimately, understanding these hiring practices provides valuable insights for aspiring venture capitalists.

TBC: Understanding VC Firms to Send the Right Signals

<p>This is a fantastic episode covering one of the most important insights around fundraising</p><p>‍</p>

Episode Transcript

Hey guys, welcome to this week's episode of the back channel today. I want to talk a little bit about junior VCs, how VCs become VCs. And if you know, a little bit of the insights around hiring processes and what firms look for when they're hiring non partner VCs, it might give you a different vantage point to understand what's important when it comes to approaching venture capitalists, your background, how you send the right signals to venture capital firms.

So. I will be speaking from my own experience, having been hired at Greycroft way back in the day, over 10 years ago, just out of business school. But having been hired at Greycroft and [00:01:00] then also doing the work to hire MBA interns, undergrad interns, new associates. I have a sense for what is important now. I remember thinking. I wonder why I got hired at Greycroft way back in the day.

For me, it came down to a few of the aspects of my background that I think lent itself to being a great venture capital hire. So. Uh, they were looking for someone with a technical background. They were looking for someone who maybe had experience in venture capital. Uh, consulting or banking. And they were looking for somebody that maybe worked in tech and they had a light. lean towards MBAs.

Now, what do all those different aspects mean for venture capital firms? Let me tell you what I think it means on the technical background side of things. They knew that certain companies that they would be investing in. Would have technical aspects to them. They also know that investing in companies means evaluating tech [00:02:00] and technical talent. So people that have that background can do a better job evaluating that that's one.

Second thing is where you came from, whether or not you worked at a big tech company or an MBA program.

Now [00:03:00] this one is a kicker. This one is a big one. I think a lot of the hiring and venture capital firms is trying to hire in network. Trying to hire in deal flow. So if you think someone who used to work@mlb.com, which is where I used to work and got an MBA, which I did. If you think that that type of background will have access to. Uh, alums from mlb.com that certain grade companies or graduates from my MBA program. That are amazing founders.

Then you might want to take on that new associate. I in order to absorb that deal flow. And then lastly, the idea of being an ex-consultant or an ex-banker well, you know what. There's also grunt work and analysis that goes into venture capital. We can argue on another episode of whether or not that's false precision, the type of analysis that gets done, but you do know that if you're gonna hire someone that used to be a consultant like I did, or used to be an investment banker, they know how to work hard.

They know how to grind spreadsheets, and they know how to, [00:04:00] uh, put out documents. These are some of the things that you need to get done for your LPs. That's what you do. Deal members. So the combination of those things makes the quote unquote perfect. Non-partner hire at a venture capital firm. The big takeaway from me. Is when you look at how you get into a venture capital firm, that middle section of features of a new hire is the one that I would think about the most.

They like hiring people from network. They like hiring people from tech companies and educational backgrounds where they think they'll meet great founders. This gives you an insight into how important networking is for venture capital firms. They want their deal flow to come in through the best channels. proven channels to them. Obviously, there are different ways to get into venture capital firms, but I would tell you because of the way that hiring goes, You should try to figure out how you get into the right networks so that you get discovered in the right way. Okay. [00:05:00] Hopefully that little walk down memory lane of how I got into venture capital gives you some sense for how deals get done. And it also might give you a sense for, whether or not you want to become a venture capital investor in the future. All right.

So that's this episode of the back channel quick and dirty. A little look into the hiring practices of associates at venture capital firms.

Hopefully these insights help you in some small way. Appreciate you listening and I'll see you on the next episode of the back channel.

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