Now I’ve really got to figure out what’s going on.
Prior to joining Precursor Ventures, my research into Venture Capital had focused on the high level — I followed partners, kept up to date on trends and explored startups I thought were interesting.
In informational interviews with associates I focused too much on questions like, “How did you get this job?”, “What should I prepare for in the interview?”and not enough on questions like, “What do you do all day?”
Once I got the job ( ?) and started asking my peers the third question, I realized the answer varies widely across firms. This is especially true when you take into account the size of the firm. Associates at firms that employ 100s of people have positions that look much different than those at firms that employ <5 people (like ours!)
So I’m going to focus on what associates at firms with <5 people do. As a startup, my role ebbs and flows with the needs of the organization. Overall though, associate roles at small firms can be bucketed into three areas: ops, sourcing, diligence.
Operations
In a company with fewer than 5 people, we mirror a lot of the companies we back in that, we are essentially a startup ourselves. So what is operations? Think bizops and you’re about there. In most small firms, the major functions like Finance, Design, Web Development are outsourced and it is the associate’s role to consult, review and improve these areas.
However, the breadth of the operations work can be expansive — from exploring investor CRM systems to building community efforts for the portfolio.
Sourcing
Associates are often tasked with searching for startups that the firm might be interested in investing in. In order to accomplish this, we need to first get a strong pulse of the markets the firm invests in. That means taking many meetings with people who have different vantage points of the same market — founders, other VCs, experts and customers.
Diligence
Once the startup is found, a lot of research has to be complete in order figure out if the startup has the potential to become a dragon or unicorn. In the Pre-Seed stage, the majority of that research is done on the people and the ideas, not the numbers. So we take time to dig into the founders’ history — who knows them well? How do they rise to challenges? What do their relationships with their co-founders look like? — in order to build a strong understanding of their ability to execute against their vision. We also dig into the ideas by asking questions like, “Are there customers searching for this solution already?”
If I had to pick one thing I didn’t realize would be a big part of my job though, it would be networking. Venture Capital is such a small industry that it still operates a little bit like a club. In order to get in, you have to make yourself known and be known. If you’re an extrovert (like me) that can be a lot of fun!
I hope this was helpful and would love to get your feedback. What did you think?