back to notes

Getting into Venture Capital

Subject: Getting into Venture Capital
Well. I don‘t want to sound like a bit of a dork, but I would say that Seth's advice is a bit too narrow. First. I would say that Seth ignores the other side of the math - that your ultimate goal is to run your own shop, not necessarily to convince someone to give you a slice of what they already have. Realistically, it's better to be able to set up your own firm rather than having to rely on the good graces of senior partners (and, frankly. the track record of shops being able to turn over to new generations is pretty poor). You'll gain a lot more economically being able to set up something new on your own. That means you need to position yourself to get investors of your own. Now. how to do that is a rather difficult question......
Second, too many people have very narrow views of what venture capital consists of. Basically. they only see the large, open to external investors. early-stage/middle-stage venture capital funds who gamer most of the headlines. But, the private equity and private debt world is huge, including such slices as:
1. distressed debt
2. buyout/private equity funds with it's own vast number of permutations
3. corporate M&A
4. family offices (some of which do lots of private deals and do them well, others of which don't)
5. technology transfer operations (some of which are close to being VC, others of which are very distant)
6. secondary purchasers of venture portfolios
7. workout groups at commercial banks
8. private placement debt investment managers (which include a whole host of insurance companies)
9. SBlCs
10. PIPE managers
11. private debt managers of all sorts of permutations
12. what are essentially merchant banking groups at various hedge funds
13. venture investing groups at various hedge funds
so, there are a lot of different slices. some of which will be more relevant than others to what you want to do,