Sailing Through the VC Industry's Rough Seas
A few strategies to stay afloat, and thrive.
Our venture industry landscape is experiencing another challenging phase. The tailwinds from the previous steroids era of venture capital are waning, and despite the industry's sturdier foundation compared to the post-90’s bubble, noticeable changes are afoot. Venerable firms are trimming their newest fund sizes, and in some cases, even their previously raised ones. However, with technological advancements, especially those powered by AI, the VC industry isn't disappearing — it's just undergoing a major recalibration.
Quite a number of rising non-partner VCs have approached me in recent months, expressing concerns about their career trajectories. Many are wrestling with feelings of stagnation, while others fear for the security of their positions. Some might recall that I touched upon a similar theme in a Venture Upward post last year – recommending, above all, to secure your seat amidst the storms.
The concerns are heterogenous, but follow a theme. There’s an anxiety about future career growth when firms are directing their energy towards managing current portfolio investments instead of scouting for new ones. There’s lamentation that whether it’s because of investing thematic focus, investing stage, or even personality conflicts, investors haven’t found their “forever home” firm. Then there are those non-GPs who have been, somewhat unceremoniously, shown the exit door. While every case is unique, there are some overarching strategies and mindsets that can be adopted these days.
Hold Your Ground. If your firm hasn't asked you to leave but are feeling discontent, perhaps now's the time for some introspection. Treading water might not be the most exciting phase of your career, but consider its silver lining. You're still part of this privileged venture world and once things pick up there will eventually be new opportunities again. Take comfort in continuity, especially during an industry-wide game of musical chairs. If you've got a seat, perhaps it's wise to hold onto it for the moment even if it’s not the chair for the long run.
Accentuate Your Value. With fewer new investments on the horizon, firms are emphasizing portfolio work. While avoiding being crass about it, ensure that the help you’re providing to portfolio companies is salient to others in your firm, demonstrating how indispensable you are. After all, since you’re a cost-center, make the partners’ expense well worth it. Furthermore, use any additional bandwidth to bolster your public image and personal brand. Engage more on platforms like LinkedIn, start a podcast, or pen thought leadership blog posts… sure, you’ve contemplated it for a while, but now is your chance.
In Search of New Horizons. For those who feel the strongest urge or even the requirement to attempt a job move, bear in mind that VC positions are scarcer than they've been in recent years. If you're searching discreetly, exercise extreme prudence. We work in an industry full of actors who trade in information. While it's a fine line to tread, you will need to find those who you can fully trust to put out feelers for new open roles. And, as hard as it may sound, patience is paramount. The process of landing a new role at a VC firm currently is measured in months if not years, not in weeks. Lastly, keep in mind a lateral move that promises longer-term stability outweighs a departure from the industry altogether.
Networking as Your Constant Asset. Relationships will bridge to your next opportunity, whether sooner or later. During these turbulent times, take even more time to actively nurture and expand your professional network. It’s your day job anyway to embed yourself into the entrepreneurial community on the sourcing side, but keep in mind to augment that activity by also regularly engaging with VC peers and mentors. Attending conferences and events can seem like misdirected time, but planned serendipity is the result of deliberate cumulative effort. My recommendation is not just to step up attendance, but start organizing gatherings of your own, even if they’re small scale. Better to be at the center of the circle, rather than the periphery.
Even if the current constriction feels long-drawn, remember, it will pass. Your time in venture will (hopefully) be measured in decades, and so while this patch may seem arduous and protracted, in the grand scheme of a career it will be a chapter and not the main story. History stands testament to the fact that post-crisis periods often usher in golden eras. Stay steadfast and venture upward.