Hello, Operator?

The most frequently given advice given by senior VCs is just wrong.

The advice is commonplace from long-time VCs, mostly ones who followed this path: "Go back and spend a few years in an operating role."

In theory, having the experience of actually working in a company (preferably a high-growth startup) as opposed to merely working with companies as an investor will bestow credibility with entrepreneurs coupled with the ability to empathize with them. Additionally, further in your career when you're on the board of a company, you will better relate to the challenges and opportunities that the CEO is facing and serve as a true thought-partner in that journey. You'll truly understand how a company is built from the ground up.

While acknowledging there are true benefits of it in an investing career (having been an entrepreneur then marketing exec post-acquisition myself), I believe that operating experience is neither necessary nor sufficient to becoming a successful venture capitalist. Clearly, there are examples of multiple pathways towards excelling in this career. And just because you have an operating background a Midas List VC does not make.

Foremost, with any career choice, one must consider opportunity costs. The time spent in the trenches - in product, marketing, sales - will certainly be accretive. But during those years, you'll also be missing out on additional growth as an investor, assembling your network and learning the craft. Career growth can compound rather than progress linearly, with successes building on past successes, so just a few years "out" of VC derails that construction.

Moreover, you've already overcome the difficult challenge of "getting into the VC club," so note it can be even more challenging to re-enter if you decide to leave. Prospective firms will wonder if you truly elected out or were nudged aside because of performance. The more senior a new addition to a venture team is, the clearer it must be that she's going to make an impact because the stakes are higher. Don't forget the second rule venture about not losing your seat, especially doing so voluntarily. If your current role isn't your long-term forever home, be careful not to confuse the need for change to another platform with the need to dramatically change course.

Unfortunately, I believe that too many senior VCs easily pass off "pursue an operating role" as lazy pseudo-insightful advice to younger investors just because they have that background themselves. It surprises me the number of folks I've connected with after writing this Venture Upward series who have asked for thoughts on this topic. As a counter-balance, go proactively seek out career investors without meaningful operating experience as mentors. They will likely not share the same recommendation and may actually come up with more astute guidance for leveling-up given your situation.

Of course, there are viable reasons to take an operating detour, most notably and importantly if there's an itch to potentially explore a long-term career path as somebody who actually builds something rather than just a supporting role in doing so. And if the career moves are made successfully, including latching onto a notable company with a rocketing trajectory, then despite friction in returning to the investing side of things, re-entry into VC can be at a higher level than if plodded along incrementally.

If you want to become enduring successful VC, then stay in venture capital and figure out how to win at what you're doing. Recognizing and cultivating some type of edge is eventually essential, and an operating background can but doesn't need to be a part of that alpha. If you genuinely are uncertain and want to explore an alternative path, then by all means do so. Life is too short not be doing what you want for half of your waking hours. However, realize that stepping away from the current investor path towards operating makes the road back on it less certain.