Moving into venture as an operator

You have built something. You have shipped product, run a team, grown a number, survived a bad quarter. And you keep being told venture is closed unless you did banking first.

That is roughly backwards, and it has been getting more backwards for a decade.

Why funds want operators

An early-stage fund is buying two things: access to founders before anyone else, and the ability to be useful once the cheque clears. An operator arrives with both. Someone who ran growth at a startup knows fifty founders socially, understands what a seed company's problems actually are, and can hold a conversation about distribution that a partner cannot.

That is proprietary access and post-investment credibility, which are the two scarcest things in a fund. What you do not arrive with is a trained model of fund economics, and that is far easier to fix than the reverse.

The market has noticed. The reading list on this site carries The Operator Edge: Rethinking Venture Capital's Talent Pipeline↗ from Crunchbase News, and the pattern it describes is now the default at seed rather than an exception.

The four doors, in order of how open they are

Platform, and it is wide open. Talent, community, content, business development, founder programmes. This is the fastest growing function in venture and it hires almost entirely on demonstrated operating work rather than pedigree. It puts you in the same meetings as the investors, two or three years sooner than the investing track would. The full guide is here.

Venture partner or advisor, part-time. Many funds carry operators who source and diligence in one domain without leaving their job. Usually unpaid or small carry, sometimes a scout allocation. It is the cheapest way to find out whether you actually like the work, and the reference it produces is worth more than the title.

Scout. Small cheques from someone else's balance sheet, on your own judgment. It is the only route that produces a real track record before anyone hires you. Elad Gil↗ puts the incentive plainly: if you want to eventually work at a venture fund, the VC partners will look at your scout track record. He also warns that a bad record early is worse than none, so treat the first cheque seriously.

Straight into an investing seat. It happens, mostly at seed funds and mostly at senior operator level, and mostly through someone who already knows you. If this is the door you want, read why most of those roles are never posted before you plan around job listings.

What you have to unlearn

Four things, and the first is the one that ends most operator interviews.

You are used to being measured on execution. Venture measures judgment. In an operating job, doing the work well is the job. In venture you can work hard, be right, and have nothing to show for years. The reps are slow and the feedback loop is close to a decade.

You will not be the one building. Kate Stern↗ of Homebrew names the part operators find hardest: venture can be pretty lonely compared with working at a startup, where most of your success is a function of your contribution to a team. You go from shipping to advising, and advice is a thinner daily reward than most people expect.

Your operating opinion is now one input. You know how to grow a specific kind of company at a specific stage. The instinct to tell every founder to do what worked for you is the most common operator failure mode, and partners watch for it.

You need the vocabulary. Not the modelling, the vocabulary. Claire Biernacki↗ of BBG Ventures sets a fair bar: she does not expect candidates to nail it, but expects a basic understanding of management fees, MOIC and how carried interest is calculated. That is a weekend of reading. Start with carry.

What to show

Your CV is not the asset. Three things are.

Founders who will speak for you. Reference checks in venture are informal, continuous and often backchannelled, and founders are the highest-signal referees in the industry. If three founders will say unprompted that you were useful, you are more hireable than most people with a decade of finance behind them.

A view about one thing. Not a general interest in technology. A specific, defensible position about a sector you have worked in, ideally written down where a partner can read it.

Companies you spotted early. Even without cheques. A list of ten companies you were excited about two years ago, with what you thought at the time, is a sourcing exercise you have already passed.

The honest trade

You will earn less, probably for years, and the carry that is meant to compensate is thinner than the industry implies: only 11 percent of analysts and 39 percent of associates receive any at all, according to survey data cited by David Beisel↗ of NextView. And the seat may be shorter than the career you left, since junior investing roles frequently run two to three years by design.

Which is why the operator route into platform, or into a fund as a venture partner while you keep your job, is often the better first move. It answers the question of whether you like the work before you have paid for the answer.

Related

Platform roles in depth, what the levels mean, or the roles funds are advertising right now.