Get In the Room Where It Happens
Being good at VC is about good pattern recognition. But you need good data to recognize the right patterns
When I was thinking about what VC firm to join early in my career, I got one very simple piece of clarifying advice: go to the firm with the best brand.
My response was… come on, seriously? I was leaving business school at the time, and the conventional wisdom was to prioritize people, fit, and culture. Or to think long term about where there was likely to be the most growth or an emerging market opportunity. Or to think about what kind of impact you wanted to have and find a role that overlapped best with that ambition.
But no. The person giving me this advice was a Midas list VC and one of my professors and knew what he was talking about. His view was that brand was a proxy for deal flow. You want to see the best deals so you know what good looks like when it comes to comparing deals, evaluating them, and managing them. Good brands also correlate with strong existing portfolios, which would similarly provide a window into what great companies look like as they scale, mature, and exit.
As I’ve gotten further in my career, I’ve come to understand this as a data acquisition exercise. As a VC, you are decision-making machine with a data driven learning algorithm. The better the training data you ingest early in your career, the better your algorithm gets. And the benefits of having good data compounds.
Once you join your firm, make sure that your experience maps to this objective. This means trying as best as you can to be “in the room where it happens”. I know some investors who have joined brand name firms but then are not allowed to sit-in on the discussions where the deal decisions get made. Or, some investors are siloed to only get exposure to one partner’s deal flow and areas of expertise. This can be good from a mentorship standpoint, but it’s sub-optimal from a data gathering standpoint.
So, you want to find a way to get as much data as you can, and you also want to get as much good data as possible. It’s great to see tons of examples of seed stage companies, but it’s less good if 95% of the companies you see are ones that no one ever invests in. You need to see what good looks like to be able to know it when you see it and to be able to hunt for it.
You hopefully also get exposure to what great companies in the portfolio are up to. Don’t tune out during the portfolio updates just because these companies don’t directly impact your day to day work. And try to figure out a way to draw a much knowledge as you can from the companies in your firm’s portfolio that are having the most success.
Hopefully, your position will allow for you to do this seamlessly. But as I said above, sometimes roles are not well set up for this. If that’s the case, I’d try to tactfully ask to find ways to get more exposure. This could mean things like:
Develop a relationship with at least 1 or 2 other partners or principles. Ask if you can just look at their calendar and try to join them for meetings.
See if you can shadow a partner on a board, and try to pick a company that is winning. You probably will get shut down if you are asking to shadow the firm’s hottest company, but if there are others that seem to be making solid progress, try to attend the board meetings and make yourself useful (more on this in a future post)
Pick some of the high fliers in the portfolio and try to get to know some of the non-executive team members. These folks often don’t get much time with a VC partner, and it could be mutually beneficial to get to know some of the lieutenants and try to add value to their work.
If you are in a satellite office of your firm, travel to the mother ship a little more than you otherwise would. Being present allows you to be top-of-mind with the other team members and will make it easier to get roped into the right meetings and discussions.
Ask if you can occasionally join the discussions where final decisions are made. Or, try to uncover the missing information in other ways. Maybe even team up with the other mid-level folks at the firm and compare notes once a month on what they have heard about different deals and how decisions ended up going down. Or, do this sort of thing with other investors at other firms without sharing any proprietary info.
These suggestions may seem like you are being overly aggressive or pushing a boulder uphill. But they are all in service of making you a better investor and actually a more valuable member of your firm. You may get some pushback, but for the most part, I think your partners will appreciate that you are doing what you can to level-up and get more reps. Just make sure that you knock your core responsibilities out of the park so that you have the credibility and internal capital to push for this additional exposure.