We’ve already covered what VCs advertise in their job descriptions but what educational background do most VCs possess? William Matar looked into the Forbes Midas List in 2020 of the top 100 VCs of the year and here’s what he found:
100% of VCs held an undergraduate degree
Most of these degrees were attained in the United States (70%), China (14%) and India (5%)
79% held a postgraduate degree while 10% held two postgraduate degrees
Postgraduate degrees were mainly MBA (70.89%), MSc (29.11%) and PhD (33%)
56% of VCs on the list held an MBA with the top 5 most common institutions being: Stanford (28.57%), Harvard (21.43%), Wharton (7.14%) and Colombia (7.14%), MIT (3.57%)
Clearly 100 VCs do not represent most VCs and a lot has changed over the years but I wanted to highlight this list because this is the data that scares away aspiring VCs. We can’t deny the fact that the world of venture has for many years been tied to prestige. VCs that have commonly originated from a handful of degrees from elite universities with MBAs. What’s starting to change, the reason we see ‘Break Into VC’ events and books popping up. The reason we wrote the book you’re reading right now is because we’re starting to realize that 1.) there is no perfect formula for being a successful VC and 2.) In an industry responsible for eyeing and funding the next big companies, maintaining a group of homogeneous individuals will cause more harm than good. We need fresh eyes to pick out fresh ideas.
Yes, for some, exclusive labels and degrees will get them the job. Some VC funds will continue to pull from their alumni database and prioritize surface level qualifications. That doesn’t mean all will and if we want to change the industry it starts with perpetuating access to venture knowledge and continuing to knock on those doors, regardless that they seem built for other people. Certainly, you want to demonstrate skill sets and interest in the industry and we will cover the ways you can build out a personal brand if you don’t hold the stereotypical qualifications. Halle Tecco put it in a good way, saying,
“So, for those aspiring to join the ranks of venture capital, don't be daunted by the industry's elite facade. Your unconventional background, unique set of skills, or even a past littered with closed doors could be your strongest assets… After all, venturing into the unknown and betting on potential is what this industry is all about.”
Key Skills and Qualities for Success in VC
In Max Pogs analysis of 1400+ VC jobs and 100 ads on Startup&VC, John Gannon, InnovatorsRoom and LinkedIn - certain hard and soft skills were consistently mentioned on the listings. Hard and soft skills are amazing entry points to pitch yourself into the VC world. If your education doesn't fit the “norm” these are areas where you can shine and exhibit competency through side projects, fellowships and self-teaching.
Top 5 Soft Skills:
Independence
Analytical
Team Player
Communication
Work Ethic
Top 5 Hard Skills:
Financial Analysis
Advanced Excel
Advanced PowerPoint
Data Analytics
Accounting
Analytical skills are an absolute necessity regardless of seniority level when entering VC. Interns are often given the task of data analysis or market research while Partners are running due diligence and essentially analyzing data on startups to decide on whether or not to invest and handling the term sheet negotiation. Analytical skills can be demonstrated by educational degrees, which is reflected in the preference for majors primarily in engineering and finance.. Basic understanding of financial modeling and financial metrics is a good foundation even if you end up in early stage investing. Luckily this can be taught through online courses and materials or through VC fellowships.
Networking is an essential skill in VC. If you want to source good deals and make killer investments you need to go out and find them. Venture is a highly social career from talking to founders to other VCs, a good chunk of the role is community building. Beyond investments, a good network helps with portfolio support allowing you to connect your founders to industry experts. It also allows you to stay connected to industry trends and techs every changing landscape.
Venture is a game of high risk and potentially high reward, if you take the right bets. Therefore, having strong foresight and awareness of the complexities of your industry's landscape is vital. You can see this reflected in a lot of interview questions in VC roles. The fund wants to know their team is interconnected into the space, following VC funds, thought leaders, other investors and reading up on the industry(s) they’re investing in. Demonstrating genuine interest in certain sectors is important to staying updated on the dynamic changes within the field.
Strong communication closely tied to networking holds major value. While venture is an independent role, when you are with founders, other investors - it’s all about asking the right questions, clearly defining your thoughts and making sure everyone is on the same page. Many roles will assess writing skills during the interview process because either through investment memos or running through legal matters of your investment - there’s no room for miscommunication.
Startup and operating knowledge is gradually making its way into must haves. Which is also why I see the standard educational backgrounds likely to take on a less pervasive role in future top VCs. A VCs job doesn’t end after the investment, they are connected to their portfolio as they scale and so an awareness of the struggles founders face can increase a VCs value add. Startup operators or former founders are commonly shifting into VC since their insight means they can be both investors and mentors for their portfolio. While more funds pop up, the differentiator between funds is boiling down to their value add.
Building a Network in the VC and Startup Community
Once you set your sights on VC, the first thing you should start doing is building a network. Finding events, online talks, Slack groups and thought leaders to engage with in the space. Even if you’re unsure about the sectors you want to invest in or early into your degree - networking can allow you to pinpoint what you find interesting, the funds you admire and in turn the type of investor you wish to become. So where do you start if you have zero connections into the VC or startup world? You can start with:
Newsletters & Communities
Slack Groups
Fellowships
Scout Programs
Online and In-person events
Social Media & Thought Leaders (content)
If you’re in university, find out if your school has a VC or entrepreneurship club you can join. Oftentimes these organizations are open to students outside of business programs and can give you leverage into the internships and programs like-minded students are a part of. If there are no VC or startup specific groups, then I would look into student run VC programs. For example, Dorm Room Fund and Contrary are student led venture funds that allow campus scouts to meet with student founders and write checks to fund their startups. These programs are application based and are commonly accepting students from a limited number of universities or regionally in the US and Canada. The programs are for anyone from undergrads to PhDs.
If you’re looking for something more entry level than simply joining free Slack groups like GenZ VCs or joining scout programs similar to GenZ Scout can allow you to learn the basics. VC fellowships and student run scout programs are becoming increasingly popular so don’t get discouraged by the most common programs, look into opportunities that fit your interests and background. Once you’re in, you get to meet other aspiring VCs and those early into their careers who can open you up to a wider network.
Next is the most obvious, social media. X (formerly Twitter) and LinkedIn are by the far the top platforms I would focus on when building a VC network. Many VCs and founders love to discuss the industry on X and engaging with their posts and building a tree of connections can open you up into newsletters, blogs, events or new roles. For example, Nicole Detommaso, Principle at Harlem Capital, built her following by demystifying the VC world sharing insights for anyone looking to build a career in venture. Every week she also shares top VC jobs along with interview tips and insights into how she landed her role. This can definitely be intimidating at first, but start by keeping up with a few thought leaders you enjoy and eventually engaging with their posts. LinkedIn is not as big of a hub, but a great place to follow funds, track new roles and founders or investors who make educational content on the industry.
Finally there’s in person and online events. I will be honest, many in-person events are invite only or limited to those with a more mature background in the space. However I would still keep your eyes open for meetups or set up 1:1 coffee chats if you find anyone in your area. For example, Girls into VC is a great community for aspiring female VCs and they host events for their community regardless of your experience. Online events are definitely easier if you’re just starting and newsletters are an easy way to find the ones going on or VC fund websites.
