As many others, I’m becoming addicted to Quora – loads of deep and good information and insights on interesting topics.
Here’s my (admittedly biased) answer to the question “What’s the case for working as an associate at an early stage venture capital firm rather than a startup?”
Some of the skills you develop at an early stage investor are very similar to what you do in a startup – and some are very different.
Why would you work for a venture investor in the first place?
- You get tons of exposure to what is happening in the market. There is no better way of developing an overview of trends and movements than at an early stage VC.
- You are actually working in a startup yourself. Early stage firms are small teams, have limited amounts of capital, need to be very flexible, and require massive amounts of work – that’s very similar to a startup. You are project managing, recruiting, marketing, developing website and similar things – for your own firm and for all of your portfolio.
- There is no better way to build a network – no matter if you want to startup yourself or want to continue being an investor.
- You are not dialling for dollars (cold calling potential investments), because early stage firms work different than later stage – you have to meet people. Also, to understand businesses in the early stages is totally different than looking at numbers and growth rates in established businesses.
- An associate role is much less analytical and theoretical than in a large fund, and usually much less business/finance focused. This is the case for most of the folks in early stage though: you need to have a very good grasp of operations to run successful investments (more hands on, advice, etc in early stage than later).
(a lot of these answers coincide with the original answer, also check back there)
Why would you not start a startup instead?
You need some different skills than as a founder. It’s a great job (the best, in my eyes), but definitely not an easy one.
- You need to handle 10-30 different companies, understand different markets, have totally diverse contacts, and a good overview of all of this.
- Skills include much more of broad knowledge, less specific and deep domain expertise. For some, this comes more naturally.
- You might be on the look out to start something longer term, with a lot of insights.
- You have ADD, in which case the dynamic nature of the job fits your personality really well.
You have to say “no” a lot. It could make you hesitant of starting your own (but then, why are you in the startup world).
Depending on the firm, you can get used to a lot of money coming your way, resulting in the same challenges you have as a consultant or banker: It is really hard to start a company after getting used to a paycheck.
I am an associate for Seedcamp in London, a micro seed fund in London. Above reflects my own experience, so feel free to deduce from that.