Even though they include a certain amount of risk, investments are always considered rewarding endeavours. Startups are booming in today’s multidimensional economy, and investors are eager to support these businesses.
The venture capital industry is one such group of investors.
A career as a venture capitalist may be right for you if you can identify startups with solid growth potential and convince a company to invest in those startups.
In this blog, we will cover – a career as a venture capitalist, job roles, skills, career pathways, salary insights, and top industries to work in. Read till the end for book recommendations!
What does a Venture Capitalist do?
In exchange for an ownership part in the company, a venture capitalist(person) or organization invests in enterprises or startups with significant growth potential. Venture capitalists are employed by a Venture Capital business, which pools funds and makes investment decisions.
Based on the nature of the job the following duties will be expected of you in your career as a Venture Capitalist:
- Support innovation by providing startup needs
- Examine the dangers and expansion potential of a new company.
- Assisting portfolio companies with anything from hiring to sales and marketing to engineering to fundraising to administrative and financial concerns.
- offer their knowledge in helping a business grow from an idea to a successful enterprise.
- Taking charge of partner finances
- Enhancing internal reporting and deal tracking.
- Attending business events and conferences, sharing information online, and networking.
Job Roles for a Venture Capitalist
These are the possible roles one can have in their career as a Venture Capitalist:
- General partner:
A general partner (abbreviated “GP”) manages a venture fund. GPs evaluate potential transactions and make the final choice on the distribution of a fund’s capital. General partners are compensated by management fees, carried interest, and fund distributions.
- Junior partner:
In terms of duties and compensation, Junior Partners fall between Principals and General Partners (GPs).
Junior VCs frequently serve as the company’s gatekeepers. Every year they may analyze hundreds or even thousands of prospects, and the simpler it is for them to engage with you, the more probable it is that they will develop a case for your business and submit it to the partners.
- Vice President (VP):
The VP will be responsible for various tasks, such as finding and assessing investment possibilities, investigating potential acquisition targets, creating sophisticated financial models to guide investment and strategic decisions, and negotiating finance and transaction closure. - Analyst:
An analyst’s position is often entry-level, desk-based, and entails developing ideas, generating leads, and performing simple due diligence. The main activity starts at the associate level, which is a little more senior.
- Associate:
Associates in venture capital work in a specialized field of finance. VC associates have less structure than investment banking analysts and other financial analysts, who concentrate on modelling and deal execution.
VC associates are entrusted with sourcing transactions, meeting entrepreneurs, and analyzing business concepts even at the entry level.
Career path for a Venture Capitalist
One has to climb their way up to becoming a venture capitalist. You will require to gain a minimum of an undergraduate degree, and significant exposure to start your career as a venture capitalist. Here are the possible pathways:
Path I
- Minimum of 55% in Grade 12 (any stream)
- Diploma in Financial Management/ Accounting and Finance/ Finance, Banking and Investment
- Bachelor in Accounting and Finance/ Financial Markets/ Business Administration/ Finance and Accounts/Statistics
Path II
- Minimum of 55% in Grade 12 (any stream)
- Bachelor in Accounting and Finance/ Financial Markets/ Business Administration/ Finance and Accounts/Statistics.
After completing either of the above pathways, one can pursue postgraduation in India or abroad. One should have a thorough grounding in Finance and understand the market. Thus, gaining experience in the field is crucial.
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Salary in different stages of a career as a Venture Capitalist
The following table is an estimated account of the average annual salary of individuals in their career as a Venture Capitalist roles mentioned above.
Job Roles | General Partner | Junior partner | Vice President (VP) | Analyst | Associate |
Avg. Salary p.a. | 25 LPA | 19,03608 LPA | 45.0 LPA | 27,19156 LPA | 32,49345 LPA |
Skills Required to become a Venture Capitalist
The following is a list of skills you will require in your career as a venture capitalist:
- Investment skills
The skill to identify potential in startups and know the right investment strategy that works for the company. - Data analysis
Guiding the company in its business strategy and executing it for exceptional returns require data analysis skills and a firm grounding in finance. - Financial analysis
A Venture Capitalist has to not just identify companies to invest in, but also calculate the fund accumulation and potential risks and profits. This demand a thorough understanding and analysis of the chosen investment market. - Deal sourcing
In a career as a Venture capitalist, you will have to negotiate deals with companies and investors, thus it is important to build a network and negotiate variables.
- Deal analysis
Your job is not just to build a growth strategy, but also an exit strategy, this will require you to come clean with the company’s investment policies and find common grounds for a deal agreement. - LP Management
LPs provide the capital to the fund manager to invest. In return, they are given profits. Negotiating and maintaining this network is crucial to the venture capitalist firm. - Communication Skills:
Needless to say, all of the above skills are deeply connected with communication skills. Your ideas and plans should be communicated coherently and persuasively.
Is a Venture Capitalist a good career option?
Due to the availability of venture funding, businesses are concentrating on growth. In India, both the size and calibre of commercial firms have grown. Many growth-oriented corporate firms have made venture capital investments in response to the increased level of worldwide competition.
Recently, venture capital has expanded significantly. Spending on venture capital reached $643 billion in 2021, up from $335 billion the year before—a roughly 92% YoY increase (year over year).
In addition, 480 unicorns—private enterprises, typically early-stage startups—were founded in 2021, each with a $1 billion valuation. They account for 51% of all unicorns. Thus, a career as a Venture Capitalist holds a lot of potential in the following year.
Type of industries Hiring Venture Capitalists
VCs serve as a bridge between business owners and the global marketplace. To transform an industry, they put money into an idea. When funding for research from organizations like governments, universities, and businesses runs out, this money can help.
The following are a few industries that you will come across in your career as a Venture Capitalist:
- Internet
- Healthcare
- Mobile and Telecommunications
- Software and Hardware industry
- Food industry
- Electronics industry
Top Recruiters for Venture Capitalists in India
Based on the above-mentioned industries here are a few recruiters that hire venture capitalists:
- Sequoia Capital
- Kalaari Capital
- Matrix Partners
- Nexus Venture Partners
- Elevation Capital
- Tiger Global Management
- Omidyar Network India
- Indian Angel Network
- Accel
- Blume Ventures
Courses to upskill as a Venture Capitalist
Businesses benefit from venture capitalists in a variety of ways, including capital investment, analytical expertise, money management, and closing investments.
A detailed grasp of investments and the workings of venture capital firms is provided by certificate programs. Professionals teach the courses, and some of them conclude with projects.
You can attempt a few of the following certificate programs for you to upskill in your career as a Venture Capitalist:
Name of the course | Duration |
Entrepreneurial Finance: Venture Capital | Self-paced |
Venture Capital Financing Modeling | Self-paced |
Private Equity and Venture Capital | 1- 3 months |
Entrepreneurial finance: Strategy and Innovation | 1- 3 months |
Startup Valuation Methods | 1- 4 months |
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Qualifications to become a Venture Capitalist
As was previously said, before investing, venture capitalists evaluate the growth prospects. One needs knowledge of finance, business, or similar fields to accomplish this. Although it is not required, individuals with an MBA have a better chance of being chosen.
Degrees in India
Knowledge of investment models and businesses is necessary to learn how to create financial strategies and comprehend the potential of firms. It will be easier to acquire the abilities if you enrol in courses that cover topics linked to these knowledge sources.
You can apply for undergraduate programs, which last about three to four years. The costs start at 20,000 INR and go up to 3 lakhs. You will learn about taxation, accounting ideas, and principles, among other things.
UG degree
The details of the eligibility criteria and top colleges to apply to in India are shared in our blog- How to become a Venture Capitalist. Getting an undergraduate degree is the beginning of taking your steps toward a career as a Venture Capitalist.
After gaining the appropriate years of experience and the right exposure, one can get positions in VC firms. Here are a few undergraduate courses you can try:
- Bachelors in Accounting and Finance
- BCom in Finance and Accounts
- BCom in Financial Markets
- BSc or BA in Statistics
- Bachelors of Business Administration
PG
To apply for a postgraduate degree in India, a minimum of 55% in graduation is a must. Apart from that, qualifying exams like GATE or university exam is mandatory for many courses.
Name of the course | Duration |
MBA: Venture Capital & Capital Market | 2 years |
MBA: Finance | 2 years |
Master in Entrepreneur Financing | 2 years |
Degrees Abroad
The details of an undergraduate degree abroad and colleges are discussed in the previous blog. One can pursue graduation in Financial Economics, Finance, Investment Management, Business with Finance, etc.
The postgraduate courses abroad require the minimum eligibility of 55% or equivalent grade point average in graduation, language proficiency test scores, SOP, and LOR.
Here are a few postgraduate courses for people aspiring to have a career as a Venture capitalist:
Name of the course | Duration |
Master’s in Entrepreneurial Financing: Venture Capital and Private Equity | 2 years |
MSc Entrepreneurship, Finance and Innovation | 2 years |
Master of Science in Entrepreneurship | 2 years |
MSc Business Administration: Small Business and Entrepreneurship | 2 years |
References for a Venture Capitalist
Books to read for a career as a Venture Capitalist:
- Mastering the VC Game: A Venture Capital Insider Reveals How to Get from Start-up to IPO on Your Terms by Jeff Bussgang
- Mastering the VC Game: A Venture Capital Insider Reveals How to Get from Start-up to IPO on Your Terms by Jeff Bussgang
- THE ENTREPRENEURIAL BIBLE TO VENTURE CAPITAL: Inside Secrets from the Leaders in the Startup Game by Andrew Romans
- The Business of Venture Capital: Insights from Leading Practitioners on the Art of Raising a Fund, Deal Structuring, Value Creation, and Exit Strategies by Mahendra Ramsinghani
- Secrets of Sand Hill Road: Venture Capital and How to Get It by Scott Kupor
- Raising Venture Capital for the Serious Entrepreneur by Dermot Berkery
- Venture Capital For Dummies by Nicole Gravagna and Peter K. Adams
- Venture Capitalists at Work: How VCs Identify and Build Billion-Dollar Successes by Shital Shah and Tarang Shah
- The Business of Venture Capital: The Art of Raising a Fund, Structuring Investments, Portfolio Management, and Exits by Mahendra Ramsinghani
- Zero to One by Blake Masters and Peter Thiel
Overall, the profession is one that requires a lot of energy and is highly paid, fulfilling, and responsible. Over the coming ten years, the job market is expected to expand. A career as a Venture Capitalist is something that should be tried for a gratifying and challenging experience.
FAQ Section for a career as a Venture Capitalist
What does a Venture Capitalist do?
In exchange for an ownership part in the company, a venture capitalist(person) or organization invests in enterprises or startups with significant growth potential. Venture capitalists are employed by a Venture Capital business, which pools funds and makes investment decisions.
Where do Venture Capitalists work?
VCs serve as a bridge between business owners and the global marketplace. To transform an industry, they put money into an idea. When funding for research from organizations like governments, universities, and businesses runs out, this money can help.
The following are a few industries that you will come across in your career as a Venture Capitalist:
Internet
Healthcare
Mobile and Telecommunications
Software and Hardware industry
Food industry
Electronics industry
What does an associate Venture Capitalist do?
Associates in venture capital work in a specialized field of finance. VC associates have less structure than investment banking analysts and other financial analysts, who concentrate on modelling and deal execution.
VC associates are entrusted with sourcing transactions, meeting entrepreneurs, and analyzing business concepts even at the entry level.
What are the job roles for Venture Capitalists?
These are the possible roles one can have in their career as a Venture Capitalist:
General Partner
Junior partner
Vice President (VP)
Analyst
Associate
Why should I become a Venture Capitalist?
Due to the availability of venture funding, businesses are concentrating on growth. In India, both the size and calibre of commercial firms have grown. Many growth-oriented corporate firms have made venture capital investments in response to the increased level of worldwide competition.
Recently, venture capital has expanded significantly. Spending on venture capital reached $643 billion in 2021, up from $335 billion the year before—a roughly 92% YoY increase (year over year).