Interestingly, there’s a ton of VCs blogging, but few are below the partner level. Maybe that’s because we (me being one of them) don’t have a whole lot to contribute to the conversation, or maybe it’s because we’re too busy taking care of the more mundane tasks of the VC world. Whatever the reason, we’re running in scant supply so I decided to take my voice off the market discussion I’ve been engaging a lot in recently and thought I’d focus a post on the world of an Analyst/Associate in VC. This one’s for the entrepreneurs who interact with us as well as those aspiring to a similar position.
I’m often asked, even by those familiar with VC, “So what exactly do you do?” The truth is that the answer varies a lot by firm. Some utilize junior professionals solely as deal originators - heading to conferences or trade shows, mining one’s rolodex, even cold calling CEOs. Other firms will hire folks simply to assist with market and deal research. VCComp (”The source for compensation information in the private equity industry”) defines the Analyst/Associate role as follows:
Associate / Analyst: Responsible for generating deal flow, analyzing companies and business plans, conducting due diligence.
Ideally, though (for the Analyst/Associate), a firm exposes its younger professionals to the gamut of VC responsibilities, which at a high level I see as the following:
(1) drumming up ”startup access” (aka. “deal flow,” but lest we forget, this business is about building companies, not doing deals), (2) evaluating and negotiating investment opportunities, (3) developing and maintaining subject matter expertise and an extensive contact network in your investment sectors, (4) guiding active portfolio companies, and (5) marketing and reporting to both current and prospective investors in the firm.
In reality, of course, the Analyst/Associate is a thought partner and value-adding supporter of the more senior members of the team. The role may mean taking a first cut at correspondence review (business plans, portfolio company updates, legal docs, etc), drafting an investment recommendation, or running a “returns analysis” (how much does the firm earn at various exit transaction values for a current or prospective portfolio company, and how well does the management team make out?). It may mean calling back “George” who knows Partner Y through a friend and has a business they know of, or it may mean generating a presentation to the investment team on movements in your investment sector. It may mean a lot of things too numerous to go into here. But I do think it’s important for a prospective young VC to know what you’re getting into - will you be an investment generator for 2 years and then head to business school or will you have your hands in more of the pot?
I think this one’s going to turn into a series. More to come…
In the meantime, here are a couple of other young VCs to read:
Andrew Parker, Analyst at Union Square Ventures
Sagi Rubin, Associate with Gemini Israel Funds
A great analysis of the job. Thanks for the link love.
[...] I’ve written before about the role of the junior professional in VC and pointed to two such individuals who are blogging and worth a read: [...]