investor stories

How to Break Into VC

A lot of angel investors we talk to don’t just want to angel invest. They want to break into venture capital.

But breaking into any new industry is intimidating. And venture capital is no exception.

Even if you’ve worked in startups before, going from operator to investor is a huge jump.

A few months ago, Brian Nichols (head of Angel Squad) and Shiyan Koh (co-founder and GP at Hustle Fund) had a conversation about launching a career in VC.

They recorded the conversation. Below are 4 takeaways from that chat.

1. Find your edge

While interviewing people for a new cohort in Angel Squad, Brian met a doctor who wanted to break into VC.

That’s kinda weird, right? Most VCs have a background in business, not medicine.

Instead of viewing this person's background as a crutch, Brian saw it as an advantage.

The doctor-turned-investor can look at startups in the med-tech space through the lens of a doctor. And that will give him a competitive edge compared to other investors who don’t have that background.

But you don’t need to be a doctor to have an advantage.

If you have worked for a few marketplace companies, you could specialize in investing in marketplaces. This is what Brian has done.

Shiyan suggested that if you’re from Africa and have a strong network there, you can help a VC firm source deal flow from Africa… this is something many VCs will never have access to.

Embrace what makes you unique and use that as leverage to give you an edge.

2. Build a track record

To get better at any skill, you need to put in the reps.

So if you want to break into VC, angel investing is a great idea.

It shows that you have a framework for finding great founders, and helps develop your taste in what companies you’d like to work with.

Pick a niche you’d like to focus on and build a reputation in that industry. Your judgment will naturally improve because you have more experience in a targeted space.

After a few years of angel investing, you’ll be able to answer these questions:

  1. How good is my sourcing?
  2. How effective are my picks?
  3. How much do I enjoy working with entrepreneurs?

While angel investing has a long feedback cycle to determine if you’re actually good at picking companies, it can give you the real-world experience you need to see if you want to dive deeper into VC.

3. Share your opinions

Publicly sharing your opinions on twitter, on a podcast, or through a blog is a good way to showcase what’s going through your brain.

It also helps you establish a public reputation, which can help with your job search later on.

Shiyan’s advice is to frequently publish things like: predictions for the future, judgements of current events, evaluations of startup strategies, and opinions… even if they are unpopular ones.

In fact, Shiyan argues that unpopular opinions can help you differentiate yourself from other investors.

But don’t be contrary just to go viral – know the reasons WHY you believe something.

Writing is a great way to connect with other people in the industry. And you'll have something to point to during job interviews when they ask for your investment philosophy.

4. Find your people

As you begin your journey towards a career in VC, you’ll realize that every fund is different. And the people in those funds have different ways of learning, investing, and engaging with others.

You may find that a highly reputable VC firm is run by people who have different work styles than you.

Or you may find that a firm that specializes in an industry you love only does a few deals a year. So your opportunities to actually invest will be few and far between.

Networking with investors is the best way to find the firm that’s best for you.

You can do this via Twitter, joining a syndicate, or attending in-person industry events.

Remember – learning about the people behind the fund before you commit to a job will help you find true joy in your career.

Until next time,
Tam "break-through" Pham